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U.S. Companies Preparing for Economic Recovery in First Half of 2010
added: 2009-08-14

With recession, AT&T study finds ROI more critical than ever before; IT executives under pressure to deliver in half the time. U.S. companies are preparing for a global economic recovery to begin in the first half of 2010 according to a new "Road to Growth" study from AT&T.

The 2009 AT&T Road to Growth Study is based on more than six dozen one-on-one interviews with IT executives employed with multinational companies in the U.S. and Europe. The U.S. portion of the study included CIOs and senior information technology executives from approximately four dozen multinational companies averaging $4.75 billion dollars revenue and operations in 28 countries. All U.S. executives interviewed for this study work for a U.S. company or a U.S. subsidiary of a foreign company, and they have responsibility for making decisions about IT strategy and budget allocations.

2009 Road to Growth Study Key Findings:

- Time horizon to achieve ROI narrowed by 50%: In today's economic climate, U.S. companies have significantly shortened the time frame over which return on investment (ROI) is delivered.

- More than half of U.S. IT executives interviewed stated they are under pressure to deliver a return on investment in half or less than half the time. As a result, two-thirds cited that the change has affected their IT budgets, strategies and priorities. The study found that companies are less willing to invest in longer-term projects or projects where the return does not come quickly. One CIO stated that the added pressure has forced the company to focus on IT projects that give at least 100% ROI in 12 months; otherwise, the project(s) get dropped.

- Cost cutting and improving productivity are top priorities: Cost cutting and increasing revenue remain the two primary business goals cited by U.S. companies. To achieve the goals, survive the recession and move towards growth, IT strategies are focused on:

1. Reducing operating costs: 87 percent cited "reducing operating costs" as "extremely or very important";

2. Improve collaboration with customer and partners: 85 percent cited "improved collaboration with customers and partners" as "extremely or very important";

3. Enhancing workforce performance and productivity: 83 percent cited "enhancing workforce performance" as "extremely or very important".

"U.S. companies are under added pressure to deliver, and IT investments are more critical than ever before," said Bill Archer, chief marketing officer, AT&T Business Solutions. "From the study, we expect U.S. companies to come out of the recession leaner and more agile. Technologies that cut cost, reduce redundancies and loss, and improve efficiencies top the priorities list."

- Short and long term strategies are similar: The Road to Growth study found that U.S. companies employ multiple strategies to address business goals, and do not distinguish between short-term and long-term strategies. It appears that U.S. companies are reducing the time period for their long-term forecasting until after the recession is over. The role IT plays in helping U.S. companies achieve long-term strategies is very similar to the role IT plays in supporting the companies' short-term business strategies.

- Business continuity & security solutions have the highest positive impact: IT investments and priorities will go towards lowering cost, reducing risks and improving productivity and efficiency. The study found that "business continuity and security solutions" will have the biggest positive impact on business growth as U.S. companies prepare for an economic turnaround. This is closely followed by "enterprise mobility solutions" and "Web delivery solutions". Areas of IT investment that are expected to have a high to moderate impact on businesses are "unified communications services" and "hosted solutions."

These findings are in line with AT&T's annual study on business continuity and disaster recovery preparedness for U.S. businesses in the private sector, conducted in June this year. The dramatic rise in social networking and mobility trends is presenting new challenges to companies' network security, disaster planning and business continuity programs. Businesses are stepping up their technology investment and efforts to meet these challenges, despite the economy. IT executives indicated in the Road to Growth study that they expect to make the biggest financial investments in business continuity and security solutions and hosted solutions in the next 9 months.

- Disparate views in Europe: The European portion of the Road to Growth study found that in contrast to the U.S., European executives have a consensus view that the global economy will rebound between Q1 and Q4 2010. The majority of executives expect a recovery towards mid to the end of 2010. Additionally, 50% of the European executives stated that there is no change in the time period with which they achieve ROI.

The consensus between European and U.S. IT executives is that the two largest global economies - the United States and China - will emerge first from the current recession.


Source: PR Newswire

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