BT is to cut its IT spending by 20%
amid growing concern over the impact of the financial downturn.
CEO Ian Livingston said he had asked his chief information
officer to cut a fifth from his IT budget while at the same time
asking him to deliver a more flexible, scalable IT
infrastructure.
"Everyone else (I speak to) is, so why should I be different,"
he told delegates at the Gartner symposium in Cannes yesterday.
His comments came after
BT's share price dropped 30% following warnings that its Global
Services division, which provides about a third of BT's sales,
wasn't doing as well as expected.
Livingston confirmed that BT's decision last week to replace
Global Services head Francois Barrault with Hanif Lalani, BT's
former chief financial officer, meant a sharper focus on
cost-cutting.
But he said it did not mean that BT was giving up its basic plan
to become a services provider rather than a telecommunications
provider.
Global Services had grown 15% in the last quarter, but because
prices had dropped, BT had to cut costs more quickly. BT would rely
on IT to make the savings happen, he said. "We should all work on
the basis that it's going to be very tough," he said.
BT was starting to use
Web 2.0 technologies such as
collaboration tools to improve internal efficiencies, he said.
But it wasn't something you could force on people. People needed to
find their own way to use the tools, and they would discard
anything that was irrelevant to them, he said.
BT was also saving hundreds of thousands of pounds by using
videoconferencing. This had the added benefit of being greener than
air travel. "If it's good for people, the company and society, why
not do it?" he said.
Meanwhile, BT has sold 30% of its South African subsidiary to a
local investment company,
Sekunjalo Investments, for
£1.76m, financed by BT. The telecoms company said the deal showed
its commitment to supporting black economic empowerment. BT has
been present in South Africa for more than 16 years and has more
than 300 clients, including several local multinationals.