17 Jun 2009

IT spending reduction 'makes firms uncompetitive'

Businesses which make serious IT cuts during the present global financial downturn could find themselves unable to respond quickly when the recovery finally starts to happen, one IT expert has noted.

Cutting back on IT expenditure could have a detrimental impact on a firm's future profitability, according to Michael Dean, head of marketing at the National Computing Centre.

He argued that companies can fall behind their competitors due to drastic cutbacks during periods of uncertainty.

"The danger in a recession is that organisations don't invest in IT and when the upturn comes they are less competitive than others," Mr Dean stated.

According to the Ardent Solutions SME Business Technology Report 2009, businesses are undermining any past investments in IT infrastructure by failing to carry on spending on staff training during the economic downturn, with 26 per cent of firms with less than 250 staff spending less than £10,000 per year on IT.