Waiting Until the End of the Recession is Officially Announced Will Be Too Late to Meet New Demands
While the recession is still under way, now is the time for IT leaders to prepare for business growth, and organizations should aim to complete these plans by July 1 of this year, according to Gartner, Inc. This advice especially pertains to the nations that first entered the recession, such as the U.S. and the U.K.
Gartner acknowledged that many countries are experiencing ever-increasing levels of unemployment, rising home mortgage payment delinquencies and business bankruptcies while also seeing reductions in consumer confidence, business earnings and overall economic performance. However, in recent months, analysts have observed that many organizations are reporting that their staff are working at near- or full-capacity levels. This demand level will almost certainly increase when businesses start detecting a resurgence in demand from customers, a more stabilized economic climate and a far-healthier lending environment from which to access credit.
“As these improvements translate into new IT project demands to help businesses identify new revenue and profit opportunities, companies will need a way to manage the already high project load with a new wave of projects,” said Ken McGee, vice president and Gartner fellow. “However, waiting until that new demand arrives will be far too late to appropriately meet it, and we are recommending that companies start preparing for business growth now with a view to having these plans completed by July 1, 2009.”
Gartner believes that the July 1 "deadline" will well serve those organizations believing that modest business growth could occur during 2010. Such a belief would require placement of new IT project and other related expenses in the 2010 budget, whose preparation period is between August and the end of 2009.
“We’re not trying to predict when the end of the recession will take place, nor are we trying to speculate when credit market stability will occur, or when we will see consistent investment appreciation return to the world’s equity markets,” said Mark Raskino, vice president and Gartner fellow. “What we are saying is that due to the lag in time between the point at which the economy begins to grow again, and when it’s officially declared to be growing again, companies simply can’t wait for an ‘official’ declaration before they begin planning for better times.”
While Gartner’s recommendations call for the resolution of key preliminary cost optimization and governance-related issues before the era of business growth returns, Gartner said that it is not necessarily advocating that organizations automatically revert to the same management techniques they were using in the years leading up to the recession. Gartner said that it plans to present an array of new cost-optimization-related actions that its clients should take during future technology selection, vendor selection, procurement, contract negotiation, asset management, and other post-recession efforts as they enter the next chapter of supporting business growth.
“Since no one knows when business growth will resume, organizations may need to file away their completed return-to-business plans for up to a year or more. The plan in waiting should be reviewed on a monthly basis and revised according to changes in the business climate,” Mr. McGee said. “Having a completed plan will enable the near-immediate allocation of funding and staffing for IT projects, thus avoiding the need to take weeks to devise a plan after senior executives mandate the need to support business growth initiatives.”
Additional information is available in the Gartner report “It's Time to Prepare for a Return to Business Growth.” The report is available on Gartner’s Web site at http://www.gartner.com/DisplayDocument?ref=g_search&id=963012&subref=simplesearch.
Gartner YouTube Channel
Mr. McGee and Mr. Raskino provide additional comments on the Gartner YouTube channel. Mr. McGee’s video can be seen at http://www.youtube.com/watch?v=mYA4AwTvoks, and Mr. Raskino’s video is at http://www.youtube.com/watch?v=4gMMEjNXcXw. Additional Gartner videos are available at http://www.youtube.com/user/Gartnervideo.
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