IT job cuts 'risk business recovery from recession'

IT departments that slash head count risk being ill-equipped to meet business requirements and could hurt chances of economic recovery, an IT consultancy had warned.

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IT departments that slash head count risk being ill-equipped to meet business requirements and could hurt their organisation’s ability to benefit from an economic recovery, an IT consultancy had warned.

Affiniti, which specialises in IT and communications management and consultation, has warned IT managers to resist a kneejerk reaction to the downturn by culling staff.

Research among 500 IT decision makers revealed that 37 percent will be cutting costs by reducing IT staff levels, rather than seeking alternative cost-cutting strategies.

The research found that 75 percent of organisations are under pressure to reduce IT operating expenditure immediately or within the next six to 12 months, but that just three percent are looking to reduce internal service level agreements.

A further seven percent would consider using more managed services as a cost-saving alternative to staff cuts.

Against this background Affiniti said, It departments making drastic staff cuts are "setting themselves up to fail in their short-term commitments". What's more, IT departments will not be positioned to "lead their company through the upturn, which is widely predicted to begin in late 2009/early 2010."

Paul Renucci, director at Affiniti, said: "IT departments must look for alternative cost saving strategies to headcount reduction, which ultimately distracts attention from the most important issues.”

The research also revealed that IT managers are missing out on the opportunity to transition IT from a service department to a strategic partner in the business.

While almost half, 42 percent, of respondents expect IT to play a vital role in helping their companies navigate through the downturn, only 25 percent of IT leaders rated helping their company increase revenues as an objective.

“Without focusing on impacting revenues and increasing customer satisfaction, IT departments risk missing out on a once-in-a-generation opportunity to get away from being seen just a cost centre," said Renucci.

"They must present themselves to the board not only as delivering intelligent cost savings in the short term, but also as leading innovation which will underpin a successful strategy during the upturn.”

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