Economy Shows Signs of Rebound

MY MARKETING HERO is John Wooden, the legendary basketball coach for UCLA in the 1960s and 1970s. Why Wooden? Because he led his teams with this simple premise: If we execute our game plan it doesn’t make any difference what the competition does. Scouting the competition was a no-no in his playbook.

I was recently thinking of Wooden when I read comments from an analyst in The Financial Times claiming the current slowdown in IT spending was primarily due to large corporations retreating from IT investments. It seems large companies no longer fear disintermediation at the hands of smaller, nimbler, dotcom competitors.

That may be true.

But while companies cut IT expenses and staff to manage the expectations of Wall Street, customer expectations of goods and services that can be delivered via IT continue unabated. The smart companies that have continued to aggressively make technology investments will prosper in the coming upside.

And that upside might be just around the corner.

The CIO Technology Growth Index, our monthly barometer of planned tech expenditures by the nation’s largest companies, points to a bottoming out of the economy right around the time you read this issue of CIO.

And there are other indicators that the rebound is happening, real-time, right now. CRN, a newspaper for value-added resellers, recently reported small companies are beginning to spend again. According to CRN, small companies are the first to cut spending when a downturn begins, and they are the first to increase spending on the upside.

What information technology investments have you made since last November? Have you continued to move forward? Or has your budget been suspended? At the recent CIO Perspectives conference, we asked CIOs how they viewed the soft economy; 65 percent said “it was an opportunity to forge ahead and capture market share.”

OK, there may have been a bit of tech bravado represented in the answer. But if your company is managing its technology investments by listening to the concerns of Wall Street rather than Main Street, you may be in for a shock when the recovery begins.

Are you ready for the recovery? Drop me a note.