Article

Managing IT to win in the recovery

Instead of hitting the gas, a more careful approach to information technology budgets could serve companies better.

By Rudy Puryear and Thomas Gumsheimer

Published on May 23, 2010
min read


When the U.S. economy tanked in 2008, companies were quick to rein in information technology spending. Now, amid signs of recovery, they risk problems by ramping up IT budgets too quickly to compensate. Market researcher Gartner forecasts that global IT spending will swing from a 4.6 percent decline in 2009 to a 4.6 percent increase this year, to $3.4 trillion. To ensure that new money is put to work wisely, CEOs should advise their chief information officers to focus on five strategies for smarter spending. Take stock of what's broken and devise a plan to fix it Deep budget cuts during a recession trigger ripple effects that can last long after sales growth resumes. As business rebounds, the consequences of deferring maintenance of computer systems become apparent when they strain to handle more transactions. A big consumer electronics company we worked with responded to the smaller downturn last decade by cutting its IT spending nearly in half. When business improved, the company discovered that more than a third of its most critical systems were operating on outdated technology no longer supported by its vendors. Before signing off on new spending, companies need to look for hidden vulnerabilities as a result of earlier cutbacks. Read the full article on BusinessWeek's website.

When the U.S. economy tanked in 2008, companies were quick to rein in information technology spending. Now, amid signs of recovery, they risk problems by ramping up IT budgets too quickly to compensate. Market researcher Gartner forecasts that global IT spending will swing from a 4.6 percent decline in 2009 to a 4.6 percent increase this year, to $3.4 trillion. To ensure that new money is put to work wisely, CEOs should advise their chief information officers to focus on five strategies for smarter spending.

Take stock of what's broken and devise a plan to fix it
Deep budget cuts during a recession trigger ripple effects that can last long after sales growth resumes. As business rebounds, the consequences of deferring maintenance of computer systems become apparent when they strain to handle more transactions.

A big consumer electronics company we worked with responded to the smaller downturn last decade by cutting its IT spending nearly in half. When business improved, the company discovered that more than a third of its most critical systems were operating on outdated technology no longer supported by its vendors. Before signing off on new spending, companies need to look for hidden vulnerabilities as a result of earlier cutbacks.

Read the full article on BusinessWeek's website.