Businesses put major IT on hold to weather downturn

Many organisations are taking a step backward and putting major IT decisions on hold while they revisit their strategy during the recession, according to analyst IDC.

Many organisations are taking a step backward and putting major IT decisions on hold while they revisit their strategy during the recession, according to analyst IDC.

"Companies are rethinking their top priorities, looking at projects that will provide an immediate return on investment, deferring large new IT projects, and turning to outsourcing to lower their cost structures," said Laura Converso, research manager, IDC European Software and Services.

IDC has predicted that IT training will decline by 10.4% as educational activities continue to be cancelled or replaced by on-the-job instruction during the downturn. However, outsourcing is expected to grow by 4.2%.

IDC has predicted a decline of 3% in project-oriented activities for 2009 as CIOs continue to delay decisions about new project work and adds-on to already deployed systems. In contrast, demand for application outsourcing and application consolidation and optimisation remains strong, as clients are seeking opportunities for short-term cost reductions.

IDC expects a slow recovery to start in 2010, with a modest 1.3% growth. According to Converso, IT services companies that have progressed quickly transforming their cost base towards a more global and industrialised service delivery will gain share at the expense of those with a lower level of industrialisation.

IDC's findings reflect a recent Confederation of British Industry survey, which found that business investment plans will shrink by 9.3% over 2009 and a further 3.4% in 2010.

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