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40 percent of foreign firms slash IT spending
By siliconindia
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Thursday, 11 September 2008, 16:12 IST
Bangalore: India as an IT hub has more challenges to face with a research study pointing that foreign firms have brought down their IT spending. The study conducted by the research firm Forrester, on the impact of global slowdown, reveals that 43 percent of the large firms have already slashed off their overall IT budgets in 2008.
As a reaction to the impact of the slowdown 24 percent of the foreign firms have put a hold in their discretionary costs reveals Forrester Data Services report. Around 70 percent are in the favor of negotiating on the IT services spending through asking suppliers to lower rates while 16 percent of those surveyed are already done with slashing their IT services spending. Moreover, with the financial services industry's IT sphere being hammer struck by the slowdown, has made around 49 percent of it resorting to a cut in their IT expenditure.
Drawing in a positive light on the distressed findings, John C. McCarthy, VP and Principal analyst of Forrester said, "With regard to the services sector, the slowdown has made firms renegotiate rates, be more selective in choosing vendors and examine spending plans more thoroughly, but they are still expecting to pay more for services. The demand for enterprise IT services has not dropped significantly."
It is only 28 percent of the foreign firms who have maintained that the slowdown has got no impact on their business.
About 950 senior IT managers across North America and Europe were surveyed on their IT services spending. It also said that nine percent of it uses offshore resources all the time, while some are venturing into the offshore works with 14 percent ramping up use, 19 percent piloting and 22 percent tracking its development.
