Don't cut ebusiness budgets, warns analyst

Gartner is urging firms to reconsider downsizing their ebusiness divisions following the slowdown in the US economy.

Carol Rozwell, an analyst at Gartner, said that although the current disillusionment with ebusiness is all too predictable, now is not the time to start slashing ebusiness budgets because business-to-business opportunities are still increasing.

"Just because dotcoms and marketplaces have failed, enterprises should not think that ebusiness has gone away. Rather than being put off by dismal economic news, enterprises must explore opportunities that will enable them to create real value for their customers and shareholders," she explained.

Ken McGee, a vice president at Gartner, argued, on the other hand, that staff cuts may be a quick way of reducing costs, but will harm firms in the long run. Instead, he suggests that companies look at cutting everyday deployment of IT practices and procurement.

"For quite some time, enterprises have built IT infrastructures just to keep up with the demands of an expanding economy, and now is no time to slow or jeopardise ebusiness initiatives. If enterprises must cut their budgets, they should look to the everyday areas of their technology," he warned.

McGee's report recommends nine steps that firms can take to cut costs without affecting their ebusiness work, including consolidating networking expenses, clamping down on workplace equipment costs, renegotiating contracts with technology vendors and working to increase business process and staff productivity.