Terrorism Affects IT Landscape  

 By Patrick Moore

RGBA Principal

No doubt the terrorist acts of September 11 irrevocably changed the business landscape of America. The attacks spurred market selling, forced airline travel to a crawl, and cast a cloud of fear and uncertainty over the business environment. Now a month after the tragic events, we surveyed several technology leaders and research analysts in the Texas marketplace to get a feel for the current and long-term impact of the attacks.

Before Sept.11, many businesses were becoming focused on using technology to drive productivity and lower costs. Return on investment was coming back in vogue. Now, as businesses react to last month’s terrorist attacks, there’s a new priority – fortifying security and disaster-recovery areas.

Although these areas don’t drive profits, many CIO’s we spoke to are considering increasing spending to ensure the bases are covered. “Given the recent events, we have to consider increasing our non-discretionary budget in the security area. The level of risk has escalated and we must respond to address it,” said one CIO in the energy sector.

Once these new risks are addressed, many in the corporate world see a quick return to the path of leveraging IT to boost productivity and building the bottom line. As another CIO put it, “we’re definitely looking past the recent events. Our goals for 2002 have not been altered. We have several initiatives planned to help drive the growth and profitability of our business.”

The pace of activity may also be another visible implication of the Sept. 11 attacks. “In periods of uncertainty, people have a tendency to stretch out decisions,” an IT industry analyst told us. “They will put off the high-risk and complex projects in favor of things that can bring them value today,” she explained. The focus in the near term, she said, seems to be on quick-hit, high-return initiatives that offer the business immediate payback.

From an IT consulting perspective, it appears the recent events have pushed an anticipated upturn into the first part of next year. “We’re seeing a good flow of opportunities,” offered a senior executive with a major consulting firm, “but there are unusual forces restraining commitment from some of our clients. Understandably, they are managing with a conservative style.”

With the recent disruptions in air travel, many consulting firms are also seeing a burst in demand around service offerings and solutions that enable the virtual workplace. “We’re seeing a huge wave of interest from clients around how to conduct business virtually,” said a global practice director. Collaboration solutions and corporate e-learning systems are two areas picking up steam.

Beyond the near-term, one IT industry analyst offers some insight. “When tech spending drops, so does productivity, and productivity drives profits.  For companies to get where they want to be, technology investment must increase.  In addition, the need of the Internet for business is continuing to grow rapidly,” he says. “One thing is certain, “ he volunteered, “technology has not, and will not, get less interesting in the long term.”  It is an absolute necessity.