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Slowdown sees groups cut IT spending

More than 40 per cent of large businesses have cut their IT budgets this year because of the global economic slowdown, according to a report set to be released on Tuesday.

Forrester, the US-based research company, found that 43 per cent of companies have already cut their overall IT budgets in 2008, while 24 per cent have put discretionary IT spending on hold.

Although the overall figures indicate a reduction in IT spending, the report highlighted wide differences between countries, sectors and types of IT spending.

“This is not an across-the-board spending slowdown. The impact of the economy on IT budgets varies widely by industry and geography,” said John McCarthy, an analyst at Forrester. “Some industries are like ground zero for financial problems, such as financial services, construction and autos. The further you move away from those industries, the less severe the problems are.”

For example, 49 per cent of financial services companies have already cut back on IT, compared with 39 per cent of media and entertainment companies. Almost half of all US companies have cut their IT budget, compared with 28 per cent in Germany.

The use of offshoring is becoming more common, with 43 per cent of companies stating they were looking to use this type of service, compared with only 9 per cent that use it at present.

The cutback in financial services reflects the slowdown in the banking sector, although several large IT contracts have been signed since the start of the credit crunch. Autonomy, the UK search software company, recently signed deals with Citigroup, Deutsche Bank and Merrill Lynch worth more than £150m ($263.5m).

Further, a recent survey by Temenos, the Swiss banking software group, reported that only 11 per cent of banks thought their IT budget would be cut.

The report was based on the responses of 947 IT managers in North America and western Europe.

Источник: Financial Times

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