The economic news was mostly bad last week, with new data indicating that the business slump has been worse than generally realized, causing more hand wringing among downturn-weary executives. One way to deal with the news is to clamp down harder, reel in expenses, and brace till the gloom passes. Another: Take action now to prepare for an eventual upturn.

In sharp contrast to the dreary government statistics were reports last week of businesses that are moving ahead with strategic technology projects. Walgreen Co. is planning to use software from FineGround Networks Inc. to speed Web applications in use at its 3,700 drugstores and to improve customer service in the process. Ford Motor Co. and Caterpillar Inc. jointly enlisted SAP to develop a supply-chain management system that their dealers will use to check inventory and better track parts orders. And Victoria's Secret said it will use Coremetrics Inc.'s marketing-analytics software to enhance the design of its Web site, reduce shopping-cart abandonment, and improve marketing.

While many businesses continue to maintain conservative IT spending habits, some business-technology executives are reallocating resources to fund projects with an eye on future opportunities, not just on cost cutting. And IT spending crept upward last quarter. According to the Commerce Department's gross domestic product report, business spending on technology and other equipment grew 2.9% in the second quarter, compared with a decrease of 2.7% in the first quarter. That indicates the slump in tech spending turned the corner last quarter or is on the cusp of doing so, says Ernest Goss, a professor of economics at Creighton University in Omaha, Neb.

Financial-services firm Morgan Stanley is planning for better days, even though some investors would rather stuff their savings into their mattresses than sink them into the stock market anytime soon. The firm this month will finish deploying an analytical customer-relationship management system based on software from SAS Institute Inc. It expects the system to help it capitalize on a resurgence in individual investing that's expected once the market rebounds.

"When the economy does pick up, we'll be more effective selling and providing services to our clients if we can better understand our customers," says Tony LoFrumento, executive director of CRM for Morgan Stanley's individual investor group. LoFrumento says the system (he declined to disclose its cost) will be the foundation of campaign-management software Morgan Stanley will start using this fall and possibly of contact-management capabilities next year. "If you don't have the analytical side of CRM done," he adds, "you can't get the economic benefits of the operational side."

Throughout the downturn, some companies have continued to invest in initiatives to position themselves to meet growth in customer demand when the economy turns around. Office-supply retailer Staples Inc. in March moved online an offline process that lets business customers integrate the electronic systems they use to procure office supplies with its StaplesLink.com E-commerce site in less than 30 days. That's further fueling use of the site, which was launched in 1999.

As the economy picks up, Staples stands to benefit from continuing to invest in its E-procurement system, CIO Gaffney says.

About 65% of the orders placed by customers who have procurement contracts with Staples take place via StaplesLink.com, which serves about 10,000 customers, and CIO Paul Gaffney expects the online integration capability to help boost that to 70% by year's end. "Large businesses can easily do all their business with us through their procurement systems," he says. Staples stands to benefit when the economy improves by fulfilling larger orders for customers that have established integration processes with the supplier. "Dedicated people, IT, and well-oiled processes ... will serve increasing customer needs whenever the economy does rebound," Gaffney says.

BEA Systems Inc. has increased support for its developers with a new Web site that it launched in February. The vendor, which competes with IBM and Microsoft in the application-server and integration-tools markets, is making it easier for developers to download software, obtain product information, and share code and best practices. "If we stop investing in our IT spending right now, when the economy turns, we won't be ready for the growth," CIO Rhonda Hocker says.

Photo by Ed Quinn/Corbis Saba.