There was mixed news on the economic outlook and its potential impact on IT spending this week. CIOs should be preparing for the distressing scenario of a double-dip recession, said Gartner. The analyst said CIOs should work with other business executives to develop a list of IT projects that could be postponed or cancelled if necessary. Separately, Gartner trimmed its forecast for worldwide IT spending this year: “The European sovereign debt crisis is having an impact on the outlook for IT spending,” said analyst Richard Gordon.
But other research suggested about 70% of CIOs in large companies believe their departmental budgets will rise over the next 12 months, with more than half expecting an increase of above 10%, according to a survey from IT consultancy Xantus. Many IT departments have seen their budgets reduced or frozen during the past two years. But Mike Bell, CIO of retail company Kingfisher, said spending money on IT is essential for future growth. “There is no money to be made by holding [cash] in the bank,” he said. Cloud computing will play a key role in keeping down costs, according to 43% of the 50 top CIOs surveyed.
Nearly two-thirds of SAP customers will use the firm’s software-as-a-service (SaaS) products in the future, according to a survey by the UK & Ireland SAP User Group. Three-quarters of respondents also indicated that SAP has been too slow in bringing its SaaS suite to market. Just 17% of respondents are using SaaS/cloud-based tools to run critical business applications, suggesting that SAP has a long way to go to win over users. However, the firm can be confident that uptake of its SaaS products will increase, especially as 49% of respondents plan to invest in the model in the next 12 to 18 months.
And insurer Phoenix Group has consolidated two million UK customer records, which resided on multiple legacy systems, onto a single system in the cloud as part of a business process outsourcing deal. Tata subsidiary Diligenta completed the migration onto its cloud-based insurance platform, which will support Phoenix Group’s move to improve its online services to customers. The cloud-based nature of the platform enables changes to be made quickly in reaction to events such as regulatory change. Charles Juniper, insurance sector analyst at BPO specialist Nelson Hall, said reduced sales of life insurance was forcing companies in the sector to look at ways to cut costs.
Computer Weekly, meanwhile, reported that the Greater London Authority (GLA) is in a unique position for a public sector body – it is looking at taking on more responsibilities, a potentially higher budget, and employing more staff as it absorbs the work of other organisations that are likely to be closed. But its head of IT says the technology budget is still falling by between 10% and 15% a year, reducing by a total of