IT firms must pre-empt recession

IT firms must pre-empt recession

Analysts are urging technology organisations to stay a step ahead of any imminent recession

Technology firms should start cutting costs now, instead of waiting for confirmation of a recession, says research group Gartner.

Analysts are advising US firms to tighten their belts due to deteriorating economic conditions. And firms in countries still meeting a two per cent GDP growth rate should follow the same advice.

The economic climate has worsened since the height of the sub-prime mortgage crisis last autumn, said Gartner vice president Ken McGee.

"Last October we published research recommending that organisations should prepare two IT budgets for 2008," he said.

"Since that time the factors we based the research on have worsened to a degree that convinces us it is now time for clients to prepare for cutting IT costs."

Senior executives are expected to mandate reductions in IT spending as part of overall cost cutting programs. And firms are advised to follow a six step plan, including reporting results on a weekly basis and selecting a liaison from their legal departments.