Economic downturn creates rough ride for IT on spending

Caution signs come out on IT spending plans, as companies focus on reining in costs

Not everyone is cutting back. John Chambers, the CEO of Cisco Systems, said during a Q&A keynote session at the Gartner conference that he plans to increase IT spending by 10 percent at the networking vendor next year, no matter what happens to the economy. Economic slowdowns can be used to "gain huge competitive advantage" by companies that see IT as "the enabler of business strategy," Chambers said.

But in interviews with IT managers after his session, in an area on the conference's trade-show floor where a few TV monitors were showing a CNN report on the latest Wall Street sell-off , it was impossible to find anyone as enthusiastic as Chambers was about the potential for moving ahead on IT investments in the face of the recession.

Opinions on the severity of the downturn's impact on IT do vary by industry. IT managers in the auto industry, which is being squeezed by slow sales and the rising cost of raw materials, are largely in hunker-down mode, according to Symposium attendees. Companies in the oil and gas industry might have more money to spend, although new projects are being carefully evaluated even there.

Harsh economic times may also make possible some IT actions that were off the table in flush times. For instance, John McLatchey, an enterprise architecture planner at a health care company that he asked not be identified, said the thinking in his group is to try to push through changes that may have been politically difficult before, such as getting rid of legacy systems that are expensive to maintain. "Let's use this as an opportunity," he said.

IT managers likely will try to to get better pricing deals from their vendors. And Miguel Gascon, CIO at Panama-based Global Bank, is taking an even more basic step. Gascon said he plans to make invoice verification a priority within his IT department, to make sure that bills from vendors are correct and meet the terms of contracts.

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Patrick Thibodeau

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