There’s nothing like a global credit crunch to get the corporate mind to focus on what really matters when it comes to spending on information technology. For financial-services firms caught in the middle of the subprime-mortgage fiscal storm, there's also pressure to make every dollar count.

"In the current credit crunch, we're taking a very close look at rationalizing our IT infrastructure to make sure we're getting optimal use," says John Bratkovics, global head of networks, voice and collaboration at Dresdner Kleinwort, the London- and Frankfurt-based investment firm of Dresdner Bank, with offices in New York, Tokyo and elsewhere.

Dresdner Kleinwort is hardly alone in its IT belt-tightening. According to research firm Tabb Group, which follows IT spending among the major investment firms, the financial industry has suffered $230 billion in debt write-offs so far from the subprime mortgage fiasco, and that figure may well top $400 billion before it's over.

An avalanche of bad debt has buried one Wall Street house already, the venerable Bear Stearns, which was acquired at a bargain-basement price by JPMorgan Chase this spring. Even for investment firms that make it through the storm, there's less money than anticipated for IT spending, says Larry Tabb, founder and CEO of Tabb Group.

"The subprime debacle is going to be a catalyzing factor in how we think about technology in the industry," Tabb predicted during a presentation he made on the topic at last month's Securities Industry and Financial Markets Association Conference in New York.

Tabb predicted the hit from subprime losses is leading to a drop in overall IT spending from about $23.7 billion this year to $20.3 billion next year. Wall Street firms' spending on back-office systems and software for trading and sales are areas likely to drop, he said.

Nevertheless, the importance of low-latency high-speed networking to help firms win in automated trading and reach new trading "pools" is driving increased annual spending in telecommunications, which Tabb Group thinks could rise by about 2.7% to $4 billion.

Dresdner Kleinwort operates a private point-to-point metropolitan-area network interconnected via New York, Frankfurt, London, Tokyo and other points in Asia. Bratkovics says an effort is underway to better standardize on servers, applications and network infrastructure equipment to save money and make maintenance easier.