February 2008
IT organizations should not wait for an official declaration that a recession has begun before undertaking IT cost-cutting efforts, according to Gartner, Inc. Gartner analysts believe that economic factors in the United States have deteriorated to the point where action is required and are advising U.S. businesses to prepare for cutting IT costs. Organizations based in other countries where gross domestic product (GDP) growth is projected to grow less than 2 percent in 2008 are also advised to prepare for IT cost cutting now.
“Last October we published research recommending that organizations should prepare two IT budgets for 2008, the first reflecting guidance already provided by senior decision makers and a second ‘backup’ budget assuming the need to cut costs in response to the arrival of a business slowdown,” said Ken McGee, vice-president and Gartner Fellow. “Since that time the factors we based the research on — such as GDP growth projections and expert predictions for the likelihood of a recession — have worsened to a degree that convinces us it is now time for clients to prepare for cutting IT costs.”
Gartner believes that as concerns increase for the near-term health of some of the world’s largest economies, those responsible for IT budgets can expect to receive mandates from senior executives to cut IT costs as part of an enterprisewide cost-cutting program. It recommends that organizations begin establishing ground rules for complying with such a cost-cutting mandate by following a six-step plan:
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