Forum: Challenging times face ICT in 2009

A perfect storm beckons in 2009

We’ve come to the end of another year here at Computerworld, in print anyway (we’ll still be delivering online throughout the Christmas period) and it’s time to reflect on the year that’s gone and ponder the one ahead.

Challenges abound for ICT companies, media companies, finance companies. Companies in general. A lot of what was taken for granted as good business practice now looks shoddy and unwise.

Companies that accepted what seemed like reasonable levels of debt even a year ago are beginning to regret their decision. Sometimes this debt wasn’t actually accepted, it came via private equity firms restructuring their capital. Debt is now a burden not only in its repayments. Analysts are looking carefully at the terms of company debt and, in particular, when that debt falls due and how it will be funded in future.

All around we are seeing value being destroyed, raising the question, in my mind at least, of whether it was ever there in the first place. This seems most pronounced in any area where intellectual property is involved: the music industry, media and, potentially, software.

Elsewhere, people who make products are finding the cycle of commoditisation speeding up. All over, margins are tight and getting tighter. And we still don’t know which way the US and, downstream, China, are heading.

In such an uncertain climate, companies are often forced to make the simple decision to cut costs. Sometimes this is the only reasonable decision. Sometimes it proves to be short-sighted, leaving the company weaker than was ever intended when the market comes back.

Smart investment is required to keep company momentum positive even when costs are being reduced. And that comes back, often, to ICT investment. ICT investment can at the same time reduce costs and boost sales and product development. But all investment will be heavily scrutinised.

And IT investment comes with a level of risk as well. Just look at the Government Shared Network. More than ever, IT has to deliver as promised. Companies simply cannot afford delays and failure.

All the indications are the first half of 2009, at least, will be difficult.

Here at Computerworld we have also undergone some changes, with three different publishing groups being brought together.

Infego, which publishes Unlimited and actv8, The Independent Financial Review and the former Fairfax Business Media stable of Computerworld, PC World, CIO and Reseller News are coming together to form a Fairfax New Zealand business and IT publishing group.

As part of that change, Computerworld will be going fortnightly in print next year. Once, as a news-oriented journalist, that would have worried me. Now, however, with a vibrant web presence built over many years, I’m looking forward to it. I think it will mean we will be able to deliver more and better service to readers in both print and online. It also means we will be making a reappearance on the newsstands, for the first time in a number of years. And that’s great news.

Unfortunately, as happens during these changes, we have lost a few colleagues along the way. We wish them well. And we wish you all a merry Christmas and a prosperous New Year.

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