The Economist Intelligence Unit published a "Corporate Expectations Barometer" survey to gauge the business/economy expectations around the world.
You can participate and review the overall consensus. In addition, you can download a customised briefing prepared by the Economist Intelligence Unit, as well as compare your expectations (over time) with those of the Economist Intelligence Unit and your industry peers.
You can access the survey here.
Technology Professional: The downturn is affecting the corporate IT budgets; the two leading technology think-tanks forecast a decrease in IT spending in the magnitude of 6 – 11 percent: this post provides a few thoughts on what technology professionals could expect from the reduced IT budgets and shares some consideration on how to better prepare to the new environment.
The US non-farm payrolls, released last Thursday, were a lot worse than most economists expected, with the number of employed people falling 467,000, some 100,000 worse than forecast; To quote David Rosenberg, today’s jobless numbers are detonating.
Note: David Rosenberg provides some of the most insightful, unbiased, and noise-free economic commentary out there. I was following David’s reviews when he was a Chief Economist at Merrill Lynch, and continue to follow him at Gluskin Sheff. You can subscribe to David’s commentary free.
The unemployment rate in June rose to 9.5%, the worst since 1983
The increasing unemployment and the excess of capacity driven by excesses of credit, consumption and claptrap from the bubble epoque, as well as the low consumer confidence continue push prices down…
As the result, business expectations are low and earnings are falling (the upcoming earnings season will be a good indicator). The cash strapped companies are forced to reduce IT budgets.
The Forester Research forecasts a 10% decrease in IT spending (revised down from 3%). You can read on this report here.
UPDATED 2009-07-07: Today, the Gartner Report followed suite. Gartner’s forecast for a 6 percent drop in technology spending is worse than the 3.8 percent decrease it predicted in March.
Budgets ‘Still Being Cut’ >> “IT budgets are still being cut and consumers will need a lot more persuading before they can feel confident enough to loosen their purse strings.”
Companies with reduced budgets and little guarantee for budget increases, are very cautious and are looking to get a clear, immediate, and tangible ROI.
While some pundits advocate R&D investment in to create an opportunity during the downturn for the grows years to come, these companies with reduced IT budgets will primarily focus on quick win (cost/benefit) projects with reducing operational costs.
Roughly we can look at the market as to There will be 2 category of of clients and grey area in between. The first are the
On one side we will see cash strapped companies with reduced IT budgets.
The first group, The second group are companies better positioned for the downturn, with a positive cash-flow, that are likely to use this downturn as an opportunity to increase market share and improve their overall competitive position. These companies are likely to:
The new reality will dictate projects with shorter time lines and tangible at the P&L, short-term ROI. So expect more smaller projects in your portfolio… if you are not already doing so I would
The companies are likely to reduce their consultants contingent, bring more IT resources in-house for the core activities
“By failing to prepare, you are preparing to fail.”
(Benjamin Franklin.)
If you are a business consultant or an executive that needs to stay on top of their game and follow management & technology trends, you will find the insights from Bain & Company consulting group – one of the thought-leaders in the field - a great source of information.
One of their most interesting publications is the Management Tools & Trends survey… You can follow the link to view this year’s (2009) briefing.
How does the economic downturn of the last 2 years, and the profound change in consumer tastes and spending preferences affected the executives’ choice of tools and strategies? Is CRM still the hype? Does the Voice of the Customer deliver on its promise?… What management and technology tools will be popular, and what tools are declining in popularity and why? You can get these and other insights as well as learn what concerns the Executives around the world from the Bain & Company survey.
This survey is one of the sources I use to keep my finger on the pulse. I will be sharing other sources in the future posts.
Selected Reading
