Where IT budgets shrivel, innovation should thrive

Where IT budgets shrivel, innovation should thrive

By Siobhan Chapman

The "devil may care" days of IT spending are over and the current tech slump is a buyers' market, but IT leaders need to spend wisely to drive the business forward, said Gartner analysts.

A recovery for the technology sector is still not in sight, yet companies need to get agile, twist through tightened loops of IT budget cuts and bounce ahead by taking advantage of slashed technology deals in the current depressed market, according to Gartner analysts.

Speaking at the opening of the annual Gartner Symposium/ITxpo 2002 in Sydney on Tuesday, Gartner chairman and CEO Michael Fleisher warned IT leaders to face the economic instability caused by the tech downturn and recent terrorist threats worldwide.

50 per cent of well known IT brands would disappear through bankruptcy or acquisition within two years, he said. While there are a few "bright spots", he added "there is essentially no prospect for a broad-based recovery in the technology sector at all in 2003."

However, Gartner analysts urged Australian businesses to keep investing in technology, albeit wisely, for future competitive advantage. While budgets have remained level, expectations have continued to grow, leaving enterprises under extreme pressure to do more with less, said Gartner.

Mr Fleisher said this is the best market ever for technology buying.

"In an industry that's consolidating with a tremendous over capacity and a bottomless market, you sit in the power seat. Your success in the next couple of years will be determined by how well you take advantage of this opportunity in the next 12 months," he said. "You need to make the most of the current situation. Make aggressive moves now to lock in terms in tech deals that will definitely disappear in the next 12 to 24 months."

Gartner said businesses need to become, what they term, a Real Time Enterprise. Bob Hayward, senior vice president of research and business development at Gartner Asia Pacific, defined the Real Time Enterprise as an organisation that competes by using up-to-date information to progressively remove delays to management and execution of critical business processes.

However, he warned, "while the Real-Time Enterprise is the next big move for business IT strategy, this does not mean we need to revert to the big IT budgets of recent years. Instead, simple tangible targets, combined with Internet era technologies, can deliver the efficiency currently locked into outdated processes."

"Businesses need to forget the 'devil-may-care' spending habits of the past and start focusing on what is achievable within current expenditure limits," said Mr Hayward. "Discipline must be the key factor as business and IT managers seeks to maximise efficiencies of existing IT infrastructures within their vision for the future."

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