TechnologyAccounting SoftwareIT spending boom years away

IT spending boom years away

IT spending will increase next year but any boom is years away and the immediate emphasis will be on replacement rather than innovation, says Gartner.

Pundits predicting that the technology market will bounce back quickly are wrong, chief executive Michael Fleischer warned delegates at the analyst’s Spring Symposium in Florence.

‘CEOs remain pessimistic. They see recovery through a much narrower lens because they have to achieve company growth. It is going to be some time before shareholders see the kind of returns they have come to expect,’ Fleischer said.

What investment there is over coming months will be concentrated on replacing dated and defunct IT equipment rather than over-hyped new technology, he added.

Smart companies would be working now to build relationships with customers, hold down costs and ‘plant a few seeds’ for future growth, said Fleischer.

‘Chief executives emerged from the dotcom era having learned expensive lessons. They need to think about the management of technology just like they do about any other asset class, like people or the budget.’

The pragmatic understanding that IT should be a means to a goal rather than the goal itself will be a crucial part of the ‘ramp’ that follows the 2002 ‘gap year’, Fleischer said.

Fleischer said that much of the dot com boom was driven by technology for technology’s sake. He singled out customer relationship management and outsourcing as particular areas where spending needs to be driven by business need rather than technology or illusory short-term savings.

‘Too many vendors were selling technology utopias but businesses now realise that they were just buying a vision.’

But the long-term outlook can be very good for the IT director and the company with the right kind of approach.

Fleischer said the IT director who argues for tighter, strategically focussed spending will find a place on the board.

The best companies able to integrate technologies to open up systems to staff and customers will be able to make big gains in the faster and more dynamic global markets of the next few years.

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