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| Spend IT dollars now: report |
November 8, 2007 |
Business has been fairly good for IT providers in Canada; in 2005 they posted a compound annual growth rate of five per cent for a total of $37.2 billion in technology sales, according to a recent Information and Communications Technology Council/IDC study. However, the lingering hangover from the big 2000 tech crash is still making companies reluctant to invest in IT.
Because of “the economic slowdown of the early 2000s, companies are less enthusiastic about spending as fast as their profits grow, deciding instead to continue to strengthen their balance sheets and cash positions,” wrote Krista Collins in IDC Canada’s Canadian Information Technology Spending Forecast, available at www.ictcctic.ca/en/Content.aspx?id=584. “This continues to be a challenge to the IT industry. As long as IT investment is considered in the context of cost containment (as opposed to providing competitive advantage and top-line growth opportunity) overall IT market growth will be muted.”
This is a mistake, Collins continued. “With the strong economic environment, now is the time to invest in IT for the future.”
But even with buyer reluctance, IDC projected a compound annual growth rate for the IT market of 3.7 per cent between 2005 and 2010. More than $246 billion will be spent on IT during that period.
Spending growth will be greatest in Alberta. From these findings, IDC made the following recommendations to IT buyers:
1) Invest in IT now: IT can be a “strategic weapon to safeguard against uncertainty in the future. The advantage of investing now is that the IT strategy will be in place to provide the business advantage needed to succeed during difficult times.”
2) Do not undervalue IT : “To underestimate the value of IT and simply view it as a method of cost containment misses a great opportunity to leverage technology for the benefit of individuals, organizations and our nation.”
3) Understand how IT can create business advantage: “Technology can be a key component and early participant in strategy development and implementation plans.”
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