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IT budgets can be adversely impacted by the very threat of economic recession. IT spending is often delayed or frozen as a precautionary measure, before budgets may actually be cut.

Customer Relationship Management (CRM) initiatives are usually one of the first enterprise application projects to be impacted by spending reductions or mid-cycle spending controls. However, CRM initiatives are often targeted at improving customer value metrics that can be adversely impacted by economic downturns. This includes customer retention, customer acquisition and reducing the cost of sales and service. Both technology and business decision makers should refrain from viewing CRM initiatives as a technology-only spend which can be delayed to achieve short-term spending reductions. Instead, adjust CRM initiatives to accommodate spending delays, spending freezes and outright budget cuts to keep CRM alive and maintain competitiveness. Table 1 depicts strategies for adapting to several levels of severity in CRM spending constraints.

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