Gartner Advises IT Leaders to Prepare Two IT Budgets for 2008

At its Symposium event in Cannes, the analyst firm warns IT managers to have a backup budget ready

Analyst Gartner has advised IT directors to draw up two separate budgets for 2008, in preparation for a possible downturn in business.

The first budget should be a business-as-usual budget based on guidance provided by senior decision makers, while the second should be a backup budget based on the need to cut costs if business slows down.

The advice was delivered at this month’s Gartner Symposium in Cannes by Ken McGee, a Gartner vice-president and fellow. McGee said that although the financial outlook for 2008 was still uncertain, it was better to be prepared now than to wait for the economic downturn to happen before taking action.

“There is already sufficient concern about the possibility of a business slowdown for next year from enough credible and independent sources to suggest that preparing a backup cost-cutting IT budget now is just plain good management,” he explained.

McGee said that the backup budget should assume a decrease in IT spending of at least 10 percent below the highest annualised IT spending run rate levels attained in 2007.

“Creating a responsible alternative recession IT budget now will demonstrate the type of innovative and forward thinking that senior executives expect to see from their staff,” he said. Drawing up the backup budget now would enable the enterprise to react more speedily in the event of an economic downturn., he added.

Also at the event, Gartner analysts had a warning for telecom carriers who, it said, were facing increasing competition from newer entrants like Apple, Google and Nokia. Traditional carriers would be tempted to transform their business model by delivering content, but Gartner predicted that more than 80 percent would fail.

The successful ones, said Martin Gutberlet, research vice-president, would be those that provide a “consumer-centric experience, for example through interactive TV, where users will be able to chat online while watching their favourite TV programmes.”

Gutberlet said the traditional telecom players had to embrace three new attributes if they wanted to become successful content enablers: trust, usability and an exciting customer experience.