- inflationary pressures on natural resources (oil, metals, etc)
- labor supply shock (labor from India/China/etc entering the formal workforce, baby-boomer retirement looming, etc), and
- large changes in the average employees risk profile from generational changeover.
- $500 billion of US mortgage debt re-pricing (upwards) and a declining dollar
- US election year
I'm not putting probabilities on the forecasts below, but am happy to have side bets on the over/under :-)
1. The Recession of 2008-09 will bring deeper competitive destruction than (recent) prior recessions. Household assets will drop more steeply and across broader population segments, given changes impacting multiple asset classes.
2. Large global capital movements - particularly cross-border flows from governments and institutions seeing windfall gains from oil, currency reserve surpluses, etc. Sub-prime fallout will continue to reduce LBO's fueled M&A activity.
3. Employee engagement will hit new lows in the US, even as it continues to rise in the BRIC's. The usual trend associated with recessions will be further amplified by the generational chageover currently underway and the stories of continuing euphoric growth in the BRIC's/Europe.
4. Declining central IT budgets with Operations and Maintainence growing in share versus compliance and new projects with a declining share in 2008-2009. Functionality investments will shrink in central IT, and reappear, in part, in shadow IT.
5. Counter-intuitively corporate IT will loose control over adoption and development of new technologies during the recession. The rapid reduction in cost of prototyping and the potential gains from exploiting nearness to customer will lead to experimentation in BU's as revenue and P&L pressures build.
6. Entitlement regarding UserProductivity technology/policy will emerge as the Cultural Battleground in corporations. A new wave of questions is rising: What access to devices, network infrastructure, and other "standard" productivity tools can employees expect from corporations? And what limitations/appropriate usage policies should govern their use?
There is a large mismatch in the perception of risk-adjusted ROI on tools (particularly web2.0) for individuals vs. corporations, with individuals focusing on the value and IT departments on the risks. The policies selected by individual companies will directly impact employee engagement, productivity, and outcomes in the War for Talent.
7. Record year for outsourcing IT, with the pace/size of deals picking up significantly and a continued focus on offshoring. Broad growth will be seen across ITO/BPO vendors with share continuing to shift towards non-US headquartered multinationals.
8. BI/reporting analytics will be the source of much pain and opportunity for improved solutions. Demand for better reporting will continue to grow given the inflexibility of current tools, the proliferations of information and reports. The supply side will improve as vendor competition (through M&A and new startups) will finally deliver next generation capabilities.
9. The power of electronic monitoring tools will begin to haunt corporate IT. The proliferation (and power) of content, network, file monitoring tools will continue given information security needs. Processes to manage the usage of these monitoring tools and data will lag the power of the tools and create the risk of "big-brother-like" abuses.
