July 28, 2008
Current State of the Economy Triggers CIOs to Reshape Their Strategies, InformationWeek Research Survey Finds
SAN FRANCISCO, July 28 /PRNewswire/ -- InformationWeek, the leading multimedia business technology brand, released the results of a new research survey that delves into the state of the economy and how companies affected are dealing with budget cuts and uncertainty. The results are discussed in a feature story, "Stare Down The Bear", in the July 28, 2008 issue of InformationWeek Magazine. The story uncovers the strategies CIOs are taking to keep their business competitive and reveals what 612 business technology executive respondents think about the state of the economy, and its impact on their overall strategies.
The research confirms the current state of the economy is having an effect on business technology plans. However, amid the shaky economy and budget cuts, InformationWeek reports that not all IT projects are being cut and some companies are actually accelerating projects such as global operations, as mentioned by a high-level IT executive at a large financial services firm. The story features interviews with CIOs from various industries, such as Gary Scholten, CIO at Principal Financial and Mike Cuddy, CIO of Toromont Industries, to share how companies are dealing with budget cuts and economic uncertainty. Many companies that have started cutting are proactively preparing their "Plan B" - what projects can be put on hold or eliminated when and if the word comes down and what projects are a must have to stay competitive.
Most companies report that their IT spending plans have been affected negatively in some manner, whether it's cutting or simply not increasing the spending as much as they'd planned. And that negative effect has increased since March, when InformationWeek conducted a similar survey. To read the March 24, 2008 feature story in InformationWeek Magazine, please visit: http://www.informationweek.com/news/management/showArticle.jhtml?articleID=206 904984 (Due to length of URL, please copy and paste into browser)
Highlights from the survey include:
-- There is less optimism and more fear: 47% of respondents are cautiously optimistic about the economic climate, compared with 53% in March; 30% describe their mood as "fear and loathing," up from 24% four months ago. Over two-fifths (43%) of respondents think we're in a full-fledged recession -- up from 32% in March.
-- The last three months, April-June 2008, have been particularly difficult: 40% of respondents report having to cut IT spending in the last quarter relative to the original 2008 budget; for companies with over $500 million in revenue, it's 50%.
-- Overall, more companies report some kind of hit to their IT spending -- 65% compared with 57% in March. About one-third (32%) are being asked to cut a percentage of their IT budgets, up from 23% in March; almost a quarter (24%) is being asked to cut specific projects, compared with 20% a few months ago.
-- Two-thirds (67%) of respondents say their IT spending will be flat or down compared with 2007 -- that breaks down to 28% flat and 39% down. A third of respondents are still adding to their IT expenditures.
-- As it was in March, the most favored way to cut back is by not making new IT hires. But more companies are scaling back infrastructure upgrades today than in March -- 60%, up from 55%.
-- Of those cutting IT projects, most are protecting customer-focused initiatives -- just 23% are cutting "customer-facing" projects, compared with 45% who are cutting projects that are not "customer-facing"
To read the full InformationWeek feature story, "Stare Down The Bear", please visit: http://www.informationweek.com/news/management/roi/showArticle.jhtml?articleID =209600478 (Due to length of URL, please copy and paste into browser)
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