Budgets Continue To Be Squeezed In The It Industries

Information technology research firm Gartner has said IT chiefs will need to become

more creative as budgets get squeezed as a result of the current economic situation.

Data released today to coincide with the start of the Gartner Symposium/ITxpo 2011, which is taking place in Barcelona until November 10, claims enterprise IT spending in Europe, the Middle East and Africa (EMEA) will reach 604bn this year, representing a drop of 1.4% on 2010; it predicts growth of 2.3% in 2012.

Peter Sondergaard, Senior Vice-President and Global Head of Research at Gartner, said he expected poor economic growth and austerity measures to hit government spending in Western Europe's mature economies, which will have a knock-on effect on businesses in the sector. He also added that chief information officers (CIOs) would need to adopt a "post-modern" approach and change processes accordingly.

Speaking at the conference, Mr Sondergaard said: "The second recession is about to hit and CIOs must decide which way to turn. The continued global economic uncertainty and the Eurozone crisis will impact your IT budget in 2012, and your business will face difficult budgetary questions. Your choices will depend on which geographies you operate in, your industry and the strength of your organisation when the economic storm arrives."

According to a study from transactions advisory and research organisation Everest Group, there were a total of 472 deals on the worldwide outsourcing market between July and September, as opposed to 508 agreements in the first quarter of the year and 516 in the following three months; there were 503 transactions in the third quarter of 2010.

While there are some signs to show that the global outsourcing and offshoring market is beginning to slow down, it is still early to comment on how the overall global market scenario will shape up, said Everests vice-president of global sourcing, Amneet Singh. We will need to see a few more quarters to determine if this is a momentary blip or the beginning of a downturn trend.

Although the largest percentage increase in new contracts was seen in the utilities industry, governments and military groups signed considerably fewer new deals in the third quarter.

Furthermore, Capita workers have warned they will continue on their current path of industrial action unless the outsourcing giant returns to the negotiating table, amid a lengthy dispute over pay.

Communication Workers Union (CWU) members at Capita sites in Bristol and the Lancashire town of Darwen staged a second one-day walkout earlier in the week. The union claims the staff who work for Capitas TV Licensing division, have not had a pay rise in two years.

We had a bigger turnout than last time. We had about 20 in the picket line but there were far more than that who didnt turn in for work, the CWUs David Wilshire told the Lancashire Telegraph on the Darwen walkout. Were all determined to see it through.

by: Tim Bisley

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