Planned IT increases outstrips some budget decreases

Enterprises globally are planning to keep their IT budgets flat and there no growth is expected in 2009, but new report* by Datamonitor found evidence to the contrary.

It reveals that in some countries, enterprises are much more confident about their outlook with planned IT budget increases outstripping IT budget decreases. Even industries worst affected by the downturn, there are opportunities for technology vendors. Technology vendors should be keenly aware that the economic conditions of a country directly impacts enterprise IT budgets.
 
Datamonitor surveyed 520 IT decision makers towards the end of 2008 to gain an understanding of how enterprises are reacting to the economic crisis and to gauge confidence levels.
 
Table 1 below, compares the results of a survey conducted in H1 2008 with the results from the H2 2008 survey.

In the UK, France and Italy, the proportion of respondents planning to decrease their IT budget outweighs those planning to increase their IT budget in 2009. A number of firms in the US and Spain that are planning IT budget decreases: all these economies are projected to have negative GDP growth in 2009.
 
Table 2 below shows how enterprises expect their IT budget to change in 2009.

Benelux, Nordics and Australia appear to be much more confident about their outlook with planned IT budget increases outstripping IT budget decreases. These economies are expected to be less affected by the economic downturn, with the exception of Iceland, and this is reflected in Datamonitor's findings.
 
In the manufacturing sector, software vendors are going to see demand fall in some areas, such as supply chain analytics, product lifecycle management and marketing customer relationship management (CRM) which are not viewed as core or essential processes.

Other areas like sales CRM, financials, procurement and manufacturing execution will continue to see healthy levels of investment and technology vendors should focus on these core areas.
 
Similarly in retail banking, investments will be made that: are essential from a regulatory standpoint; make a demonstrable improvement to a retail banks bottom line; and protect the institution from exposure to risk, be it lending fraud or operational failure. Investment into online channels will remain on the agenda, though banks have invested heavily in this area over the past few years.
 
These are just a couple of examples of where opportunities exist in vertical markets despite the forecasted global recession.
 
IT budgets have been hit the worst in developed economies that are falling into a recession. Although there is a noticeable correlation between an economies' future outlook and projected growth in enterprise IT expenditure, there are opportunities in every vertical market if vendors understand enterprise requirements.

Enterprises are more interested in raising efficiency than cutting costs. Technology vendors should tailor their sales and marketing to address the specific needs of the enterprises they are targeting, while taking into account the economic conditions they are operating in.
 
*How Will IT Budgets Hold Up in 2009‾

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