PRINCETON, N.J., July 22, 2009 — In the latest wave of the RONIN “Pulse Report,” based on 1,908 companies worldwide, the expectation in IT Departments is to decrease 2009 IT spending by 8.1% less than 2008 levels.
“When we ran the March/April wave of the study, IT groups were expecting a decrease of 6.7%. While the impact of the recession on companies has held steady, the impact being felt by IT groups has increased and this is reflected in the 8.1% decrease figure,” said Harry F. Bunn, RONIN’s President and CEO. “It is a ripple effect as companies are addressing their broader issues and are now putting the screws on IT.”
The study shows that companies are:
- Not making investments in new technologies or “value-added” solutions
- Not taking risks in their IT groups
- Not regarding IT as a strategic asset or even a service to the company
They are:
- Buying mainstream, evolutionary, no-risk products and services
- Undertaking initiatives which emphasize helping IT reduce cost
- Looking for “low-cost” solutions not “high value”
- Adopting a “back to basics” agenda to match current environment
IT is being faced with a deteriorating situation. After years with using “advanced” or “leading-edge” technology, IT is making do with “mainstream” technologies.
The role of IT has also shifted. While a few years back over 50% of spending was by IT groups, where executive management of the company viewed IT as a “strategic asset,” this has shrunk to just 28%. Now IT is seen as a “cost to be controlled” by 36% (up from 33% in our March wave of the study) of sites. The “seat at the table” has been replaced by “wait outside until we call you.”
IT is responding by stressing basic infrastructure elements such as backup and recovery, security coupled with cost-saving approaches - server consolidation, virtualization and extended use of Intel-based servers.
There is a group of companies which are bucking the trend by still increasing their IT spending - we call these the Platinum Elites - and these comprise 27% of the total spend. These companies tend to be:
- Less affected by the recession
- Believe more in IT’s strategic value
- Have more advanced IT infrastructure
“Typically, during a recession companies take one of two paths. Some re-engineer themselves to be even more competitive as they emerge from the recession. Others take a succession of tactical cost-cutting actions and often emerge with lost competitive edge and leadership. In the former companies, IT needs to take a leadership role in being a significant player in the re-engineering effort,” said Mr. Bunn.
The Webinar will address all these issues and findings and focus in on the Platinum Elites - who they are, how to find them and what strategies will work best.
RONIN conducted this study on the impact that the current worldwide recession is having on companies’ IT initiatives in late March/early April, and again in June 2009. Over 3,500 surveys were completed by IT decision makers, both in IT Departments and in the lines of business (e.g. finance, marketing) across 12 countries - US, Canada, Mexico, Brazil, Germany, UK, France, Italy, Spain, China, Japan, and Australia. Respondents were members of the RONIN global IT Decision-Maker Panel.
RONIN Corporation is a global market research and marketing consulting firm with offices in Princeton, NJ, and London, England.
If you would like more information about this topic, or to schedule an interview with Harry Bunn, please call Jennie Koval at (609) 452-0060 or email Jennie at jmk@ronin.com
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