Computer Economics Analyzes Post Attack Tactics for IT Personnel Management and Cost Control

Business Wire, Nov 8, 2001

Business Editors & High-Tech Writers

CARLSBAD, Calif.--(BUSINESS WIRE)--Nov. 8, 2001

As IT managers work to cope with post-terrorist attack uncertainty, many are being forced to more tightly control spending and have moved to short-term management tactics.

"Many IT managers in our focus groups are declaring that long-term strategies are on hold for the next two quarters and decision making has moved down to the tactical level," said Michael Erbschloe, vice president of research for Computer Economics.

"IT managers are looking at spending in all areas and working to control costs," said Erbschloe.

The biggest expenditure in an IT budget is for personnel, which in 2001 comprises 37.2 percent of a typical IT budget compared to 30 percent for the prior three-year period and 31.2 percent for the prior decade, according to the 11th annual Computer Economics Information Systems and E-Business Spending study.

"Personnel management tactics in most IT departments are now focused on employee retention," said Erbschloe. "We saw a similar focus entering into the recession of the early 1990s."

Retention efforts in 2001 include curtailing spending in other areas to assure that there are resources for compensation increases and bonuses.

"Several IT managers in our focus groups are being more aggressive in their personnel management tactics," said Erbschloe. "Poor performers are being weeded out in some companies to assure that there are funds to pay the staff that perform well and that the company wants to retain." Many of the layoffs are being attributed to problems resulting from the September 11 terrorist attacks.

"During downturns we also see less frantic job hopping among IT professionals," said Erbschloe. "People will stay in a situation in which they feel secure, at least through slow downs in the economy, and then when the upturn arrives the turnover rate in IT shops soars for five or six months."

This means that retention efforts must extend beyond the downturn because of a surge in hiring that accompanies an upturn in the economy.

About Computer Economics

Computer Economics is an independent research firm specializing in helping business decision makers plan, manage, and control technology costs through advisory services, analyst support, and innovative advisory Web sites. Based in Carlsbad, Calif., Computer Economics serves information technology users around the world.

Note to Editors

A bio and digital photos of Erbschloe are available at: http://www.computereconomics.com/photo/p1101.html

(c)2001 Computer Economics Inc.