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Global Study Reveals Companies Believe Recession Far from Over

Global News - Americas

PRINCETON, N.J. – In a study released today, RONIN has polled nearly 1,500 companies across twelve countries on how the recession is impacting their companies and it reveals that there has been little change in sentiment in the past 12 months. Throughout the period, 87% of companies have been negatively impacted, with 48% being "strongly" or "extremely" negatively impacted.

The study has focused on the IT function in companies and shows that they too are as affected negatively by the economic climate as was the case during 2009. This has resulted in an expectation that external spending on computers, software and related services will be flat compared with 2009 (which was 5.3% lower than the 2008 levels).

Two other major themes emerged from the study.

The first relates to the way companies as a whole are reacting to the recession. The study shows that there is a significant bifurcation between companies which are taking short-term actions concentrating on cost cutting and leaving strategic aspects until they emerge from the recession ("short termers"), and companies which are taking advantage of the recession to re-think their business models and develop strategies which will allow them to emerge stronger ("strategics"). It is clear from the study that the "strategics" have embraced technology more and are implementing initiatives to expand the systems and infrastructure to help them emerge with competitive advantage over the "short termers." They believe they will emerge stronger, whereas the "short termers" believe they will not.

The study also reveals that there will be a recessional re-alignment – behaviors post-recession will be different rather than reverting to the pre-recession approaches.

There are five major aspects of change the first is the increased customer power that buyers have had during the recession, which seems unlikely to be relinquished in the slow emergence from the recession and afterwards. Coupled with this is the belief that the "recession pricing" that many vendors adopted during the recession to make some (albeit lower) margins rather than none will be insisted on going forward. The third aspect is the insistence on flexibility and variability fixed-cost structures are being replaced by variable-cost structures. The fourth, and related, change is the shortening of cycle times for planning, budgets and projects. The five-year plan is a thing of the past. The complex, integrated, five-year project with payback only after that time has given way to a series of short phases with interim payback as each phase is completed. And the final change will be increased risk avoidance, which will encourage companies to buy mainstream or advanced rather than "bleeding edge" technology.

Harry Bunn, President and CEO of RONIN, summed it up: "The recession is far from over in its impact on companies and IT worldwide and that as these companies emerge they will be behaving differently than in the pre-recession environment."

RONIN conducted this fourth phase of the ongoing program in late February 2010. Over 6,300 surveys were completed over the four waves across 12 countries U.S., Canada, Mexico, Brazil, Germany, U.K., France, Italy, Spain, China, Japan, and Australia. Respondents were members of RONIN global IT Decision-Maker Panel.

RONIN Corporation is a global market research and marketing consulting firm with offices in Princeton, NJ, and London, England.

If you would like more information about this topic, or to schedule an interview with Harry Bunn, please call Jennie Koval at (609) 452-0060 or email Jennie at This e-mail address is being protected from spambots. You need JavaScript enabled to view it

www.ronin.com

This release was issued through eReleases(TM). For more information, visit www.ereleases.com.

Source: RONIN Corporation

CONTACT: Jennie Koval of RONIN Corporation, +1-609-452-0060,
This e-mail address is being protected from spambots. You need JavaScript enabled to view it

Web site: www.ronin.com/


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