04 Mar 2009
The number of IT projects in Europe is expected to decline by 1.4 per cent during 2009, according to research by IDC.
The analyst has revised its forecast for IT services spending to reflect the slowing economy, predicting just 0.6 per cent growth this year, down from the previous estimate of 2.6 per cent.
The main reason for this is the number of IT projects being put back or re-evaluated, said Laura Converso, research manager at IDC European Software and Services.
''Many projects will be delayed, reduced in scope, or chopped into smaller pieces, but so far we do not expect many projects to be cancelled,'' she said.
''Despite the delay in IT decisions, we believe projects aimed at risk management, merger and acquisition integration, and further cost efficiencies are more likely to be approved. The outlook for manpower-based IT services is tough for the year ahead, with an expected strong reduction in both volume and billing rates.”
One area that IDC expects to see more growth is outsourcing – up by 4.4 per cent year on year - driven primarily by European organisations looking to cut costs.
IDC said most IT “deploy and support” services spending will be cut to the minimum, and only "keep the lights on" spending will be maintained.
It is encouraging to see that IDC has revised its forecast to be less pessimistic.
In the current economic climate it is understandable that project approvals are harder to win, gate reviews are tougher and relative project priorities are revisited.
A trend I have seen discussed is that project selection is now weighted to favour low cost initiatives that can show value in shorter timeframes. This trend is likely to impact some large projects.
I am hoping that the drop in the number of projects is cushioned by an increase in the maturity of project management practices that are driving efficiencies. This will allow more projects to be executed with higher resource utilization levels.
I am happy to discuss at my PPM LinkedIn group
Posted by: Pradeep Bhanot 05 Mar 2009
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