Business as usual?

Scanning the ICT-business wire it looks like we are moving to a state of business as usual after the nervous last 9 recession months. Halted projects are started again, the word “growth” is out in the open again, people are hired and first articles on future scarce ICT-resources are emerging. Has our industry learned anything from the roller-coaster the world is going through? I doubt it.

Although impact wise not comparable with the 2001 dot-com crash, the ICT-industry in general seems to react as usual: cut away costs and keep your head down until the storm is over. End user organizations to a large extend did not re-evaluate the business necessity of IT-projects but just put them on ice.

Weirdly enough IT-budgets seem not to have suffered as much. Now that they are finding that they can get people again and not have to rely upon the over expensive hired hands they see that they can do more with the same budget and start unfreezing the old project portfolio. Want evidence: just check out the industry most guilty for the recession: the financial institutions. They are hiring (freelance) resources by the truckload at half the price of a year ago, demanding for knowledge of the projects that were stopped earlier. Thus: no rethinking the business value, just shifting budgets.

The traditional suppliers of external resources have laid off (silently) all those with non-permanent contracts and those on the beach, and are reaching a break even again. Yes, rates have gone down and will stay down for a year or so before market demand will start raising them again. Heads down and stick to your signed volume and outsourcing contracts. Thus: no rethinking of alternative business and service models.

The IT-suppliers have started to consolidate further. Having built up large cash amounts over the last years, the strong ones see bargains that will give them even more market share. The pressure of forced re-negotiating existing support contracts is present but is far less hurting than slumping new license sales. Although for solutions directly contributing to business there will be even more success. In this respect the glory days of premium priced ERP might be over. Maybe a glimmer of hope here: there will be less room for hyped solutions.

I certainly don‘t have a hidden wish for the recession to go on but call me a romantic that hoped for some real change. But my observations for today are best summarized by rephrasing some famous lines of Tolkien from the 'The Lord of the Rings': The days of the banker have come to an end; now are the days of the purchaser!

Please share me your thoughts on this.

hans.van.nes@results2match.com