Everyone is whispering that it could be time for a market rebound. The market has been gaining ground, earnings reports have been somewhat positive and people are starting to cautiously invest. What does this mean to the technology marketplace and 2004 budgets? Could financial-services firms start to loosen their purse strings?
The likelihood is slim. Analyst firms have suggested that 2004 spending will increase, but not by much. TowerGroup predicts a 2-4 percent increase over last year.
In thinking about the possibility of increased tech budgets, I asked a few CIOs to take a minute to dream. My goal was to figure out if there were discretionary dollars to spend in 2004, where would this money fall? The question I asked was this: "If you had an extra $20 million in your 2004 budget, where would you spend it?" I received an assortment of answers - most laughing at the notion.
It might seem like a superfluous question, but I was trying to uncover two things. Most importantly, what projects are really suffering right now? And secondly, is there a luxury technology project in which CIOs are longing to invest - the one that has the potential to transform their business and provide a competitive edge - if only they had the money?
What I found was that the pain felt from staff cutbacks has clouded most CIOs ability to think about luxury. The consensus? The top priority was to invest in people - not to work on new projects, but rather to help expedite existing projects. As such, it seemed clear that staff cutbacks were affecting the performance of the IT department.
Despite the shock at my question, there were a few CIOs who were able to think beyond the pain. One said he would invest in re-engineering corporate functions, such as finance and purchasing. He says that this type of project will only be done after the front-end, trading projects are completed. Two CIOs said they'd spend their money on storage-area networks to reduce the amount of disk storage needed and improve efficiency. Another said he would invest in an enterprise-management system to alert his team to system problems.
I also asked for the perspective of TowerGroup Senior Analyst Dushyant Shahrawat. He said the money would likely go toward a project that was close to the heart of the CIO - such as Web Services for Merrill Lynch or Linux for many others. Some CIOs, he thought, would likely invest in further integration.
Most importantly, he agreed that a large amount of money would go toward rehiring. "Most brokerages are down to the bone after the recent layoffs over the last three years. And talk about a time to be hiring - You can cherry-pick top talent for pennies on the dollar!"
Well, now is budgeting time for most. And although it's unlikely that CIOs will be given a windfall of money, the time seems ripe to start thinking about the future.