Where is IT going?

With political uncertainty keeping the economy slow, the industry pundits are having a wild time trying to predict what is actually going to happen this year.


Market Analysis

Where is IT going?
With political uncertainty keeping the economy slow, the industry pundits are having a wild time trying to predict what is actually going to happen this year. There is a general consensus that spending will not rocket to the rates we saw a few years ago, but aside from that there is much disagreement.

When the IT industry started off it was all about adding value. Complex calculations and modelling were handled with ease by the early computers. As these machines grew in size and complexity, so they became capable of greater functionality that enabled the automation of business functions. All of this added tangible value to businesses - automation meant slicker process and fewer staff - technology truly supported business operations.

But then the IT department got fatter and fatter. More technology meant a bigger IT department. Vendors saw the opportunities to start selling technology that supported business operations that didn't exist in many organizations, in an attempt to get companies to buy things they didn't know they needed.

What we saw was a massive period of growth that was topped off when an IT system somewhere failed to recognise, and we realised there could be a minor problem, after the year 2000. While most companies were busy millennium proofing their IT systems, the Internet moved from being an academic and government based network to finding a use in the commercial sector, which in turn led to more IT growth.

Then the boom really happened and IT vendors went into overdrive as customers struggled to keep up with the Jones's in the frantic rush for the latest technology that few people knew how to use properly and even fewer knew whether there was a real business value for. The mobile world was going to be the next big thing, but WAP did the wireless world no favours and then the bubble burst.

With tightened purse strings, companies are now focusing on business value like never before. The truth of the matter is that few of them have ever measured the business value that IT has, or hasn't, added and so it's new ground for everyone. Add into this the slow economy where organizations do not need to invest in new technology for competitive advantage and it is obvious that IT is under the microscope.

Bizarrely enough, the need to save money is accompanied by the need to spend money - you cannot conjure savings out of thin air - you need to invest now to save in the long term. Having said that targeted investment can provide real results as well as providing the necessary springboard to move quickly and effectively when the economy moves forward.

We might see flat spending this year, no one really knows, the one thing that is for sure is that any spending that does take place will have a far stronger business case than any other investment that has been made in the past. So, as the pundits gain column inches, the fact of the matter is those organizations need to do what they need to do anyway.


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