There’s no doubt the UK vote to leave the EU will affect companies across the South East who are planning to buy new IT services.
But the big question is this: how negative will the impact be in the long run? The honest answer at this early stage is nobody really knows until clear economic data is available.
One problem – at least in the short term – is that most of the technology and IT solutions British companies purchase are denominated in US dollars resulting in their purchasing power being impaired by a weaker pound.
The pound plunged against the dollar after the referendum. Although it did recover some of these early losses, there’s no denying we’ve entered a period of potential volatility in the currency markets which could lead to ongoing fluctuations in IT prices. This means that Sussex companies’ ongoing costs will be less easy to forecast and budget for accurately.
A longer-term impact will be when an exit agreement with the EU has been concluded. If free movement of labour is excluded from that agreement, then access to IT skills from across the continent may affect the roll-out of key IT programmes. There may be delays caused by a shortage of IT skills that could handicap British companies as they strive to remain competitive.
Data protection compliance
There’s also the question of future laws governing handling of data. Until the vote to leave was confirmed, it was assumed that all UK companies would have to comply with the new European General Data Protection Regulation (GDPR) which all EU members must adopt by May 2018.
This won’t go away just by leaving the EU. UK businesses that sell to Europe will have to guarantee their data storage complies with the requirements of the GDPR. If they don’t, they simply won’t be able to bid for new contracts.
Some commentators, like Peter Galdies from the data services company DQM GRC, have suggested that “mirroring” legislation for data protection will have to be put in place by the UK Government to minimise future barriers to EU trade.
Will IT upgrades be put on hold?
Gary Jowett from Computer & Network Consultants in Brighton says: “There’s no doubt the vote to leave will have an impact on technology costs and IT budget planning. Indeed, it may prompt some businesses in Sussex and elsewhere to put on hold IT upgrades, even though they know these upgrades are essential to maintain competitiveness.
“However, it’s prudent not to let such uncertainty breed inertia. Putting everything on hold could damage a company’s future growth plans. It’s far better to realistically assess all the options and factor these into long-term planning where possible.”
A good external IT consultant can help your company fully evaluate all the possible scenarios so that you can implement robust risk management procedures thereby minimising uncertainty and enabling you to sail through these turbulent times to much calmer waters.