Prepare two IT budgets for next year, Gartner urges
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IT directors are being urged to prepare two entirely separate IT budgets for 2008 in order to cover themselves in the face of fast changing economic conditions.
Speaking at its Symposium/ITxpo in Cannes, France, analyst Gartner warned that the recent turmoil in credit markets around the world and continued uncertainty mean that companies need to plan for different eventualities.
Two budgets – the first reflecting guidance already provided by senior decision makers, the second back-up assuming the need to cut costs in response to business slowdown – would enable planned flexibility.
“Although the financial outlook for 2008 remains far from certain, waiting for a clear economic trend to appear prior to taking action is not a prudent option,” says Ken McGee, vice-president and Gartner fellow.
“There is already sufficient concern about the possibility of a business slowdown for next year from enough credible and independent sources to suggest that preparing a back-up cost-cutting IT budget now is just plain good management.”
To be meaningful, he recommends that plans should target a decrease in IT spending of at least 10% below the highest annualised IT spending run rate levels of this year.
“Creating a responsible alternative recession IT budget now will also demonstrate the type of innovative and forward thinking that senior executives expect to see from their staff,” says McGee. “It will also show the kind of flexibility and agility needed to respond to fast-changing economic and business conditions.”
