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Prep for recession's end now, Gartner tells tech companies

Preparations will help cope with "modest business growth" in 2010

By Brad Reed, Network World
June 03, 2009 05:15 PM ET

Network World - Leading IT companies and CIOs should start preparing for business growth immediately if they want to avoid falling behind competitors once the recession ends, says Gartner Research.

Although Gartner acknowledges that it can't make any solid projections about when the recession will end, it says that companies that wait until the economy starts growing again will be left scrambling to catch up with their competition. In particular, Gartner says that many companies already have their staff "working at near- or full-capacity levels" and that "this demand level will almost certainly increase" once leading economic indicators start picking up.

"Our research does not intend to predict when we will see the end of the recession," says Gartner analyst Ken McGee. "What it does do is identify this very special period… before the bottom of the recession and before the return to growth. That's precisely the period where clients should identify how they will prioritize projects that have been held up because of the recession."

Citing economists' predictions that the United States could start to see economic recovery in late 2009 or early 2010, Gartner analyst Mark Raskino says that business leaders will likely be facing "a better, known future" within the next year where they'll "begin to understand what the new 'normal' will look like." Raskino says that because it's unlikely that the economy will revert to its old model fueled by cheap credit after its recovery, business leaders will look to the IT industry for ideas on how to reshape their companies to meet new economic realities.

"The CIO must step forward and offer longer-range, bigger ideas for the way in which information technology can support the future of the firm," he explains. "That window is now and you will regret it if you miss it."

Gartner thinks that companies expecting modest business growth should set a deadline of this July 1 to complete preparations for the economic recovery, which it says should inevitably include resolving "key preliminary cost optimization and government-related issues before the era of business growth returns."

The global recession has hit the IT industry hard, as Gartner projected earlier this year that it would result in more losses than during the 2001 dot-com implosion. The firm projects that global IT spending will total $3.2 trillion in 2009, a decline of roughly 4% from the $3.3 trillion spent on IT in 2008. Hardware will be the hardest hit and will experience a 15% decline in spending this year, Gartner says.

Read more about infrastructure management in Network World's Infrastructure Management section.

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