SAP Watch

Nov 25 2008   4:56PM GMT

Does investing in IT make sense now?

CourtneyBjorlin Courtney Bjorlin Profile: CourtneyBjorlin

On my way home from New York, a gentleman who was also riding the train noticed I was reading about SAP. As he sold software for a best-of-breed provider, we struck up a conversation about the state-of-the-software business.

“No one is buying anything right now,” pretty much summed up his thoughts on the matter.

It was an interesting caveat to the panel discussion I had just come from — “Why investing in IT makes sense in this economy.”  

The sentiment that “no one is buying anything right now” is backed up by scores of recent studies showing that people really aren’t investing in IT.

But should you be?

“Is it the right time to buy a huge amount of new technology? I don’t know the answer to that question,” was the response of Harvard Business School professor and panelist Andrew McAfee to the question. “Is it the right time to stop trying to innovate and improve and make your business more efficient? It’s a really bad time to do that.”

So how can you innovate and make your business more efficient?

The two SAP customers on the board made clear that their priorities this year were business intelligence – one just having purchased Business Objects software.

“If I have this software, I’ll know which bridge I want to fix,” Naomi Wyatt, secretary of administration for the state of Pennsylvania, said when asked how she justified the software purchase with such a tight state budget.

SAP co-CEO Leo Apotheker stressed that businesses needed to focus on managing liquidity, and pitched a liquidity management package the vendor is delivering to that end.

But investing in IT doesn’t have to mean buying new SAP software.

In her column, “Ten imperatives for midmarket IT strategy in 2009,” Anne McCrory points to an investment in keeping staff happy as one key business strategy. And InfoWorld’s list of “Five top IT spending priorities for hard times” is topped by buying new hardware.

Does investing in IT makes sense for your business in this economy? And how will you do it?

Courtney Bjorlin, News Editor 

2  Comments on this Post

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  • John Sicard
    In such tumultuous times, many of the large fortune 1000 companies I have the opportunity to interact with are looking to invest in technologies that would allow them to “know sooner” when their business shows signs of worsening, or signs of rebounding, thus giving them the best possible chance of responding accordingly in ‘as it happens’. I am intrigued with the question “how will you do it?”. Personally, I believe the SaaS vendors will have a significant advantage in the coming quarters. Companies can gain significant technological advantage without the need for large cap-ex outlay. Would be interested in others opinions on whether the current economic conditions will increase the likelihood of them engaging with SaaS based offerings.
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  • Eric Kimberling
    Great blog post. We recently published a related blog topic, but with a slightly different angle. I believe that although IT spending will be more scrutinized in 2009 than in recent years past, companies in general will still continue investing in ERP technology in the next year. If anything, it is a good time to leverage the potential of ERP to improve productivity, lower overall costs, and position companies for a strong recovery. The blog can be found at:
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