Emerging tech will flip IT's value proposition

Chief information officers must ‘re-imagine’ IT to support growth and competitive advantage, say findings from the ‘2011 CIO Agenda’ survey.

The survey was conducted wordwide by Gartner Executive Programs between September to December of 2010, and represents CIO budget plans reported at that time. The survey includes responses from 2,014 CIOs representing over $160bn in corporate and public sector IT spending across 50 countries and 38 industries.

CIOs’ IT budget projections for 2011 are globally ‘flat’, with a weighted average budget increase of 1 per cent. While CIOs do not report IT budgets returning to pre-recession levels, those experiencing budget increases in 2011 outnumbered those reporting a cut by almost three-to-one.

“CIOs and IT have been boxed-in between modest budget growth and growing legacy requirements,” says Mark McDonald, head of research for Gartner Executive Programs. “New lighter-weight technologies – such as Cloud Computing, software as a service (SaaS), virtualisation, and social media - and IT models enable the CIO to redefine IT, giving it a greater focus on growth and strategic impact. These technologies were selected by CIOs the most.”

Top 10 business and technology priorities in 2011

Top 10 Business Priorities
Ranking
Top 10 Technology Priorities
Ranking
Increasing enterprise growth

1

Cloud computing

1

Attracting and retaining new customers

2

Virtualisation

2

Reducing enterprise costs

3

Mobile technologies

3

Creating new products and services (innovation)

4

IT management

4

Improving business processes

5

Business intelligence

5

Implementing and updating business applications

6

Networking, voice and data communications

6

Improving technical infrastructure

7

Enterprise applications

7

Improving enterprise efficiency

8

Collaboration technologies

8

Improve operations

9

Infrastructure

9

Improving business continuity, risk and security

10

Web 2.0

10

CIOs surveyed reckon that they expect to adopt new cloud services much faster than originally expected: 3 per cent of CIOs have the majority of IT running in the Cloud or on SaaS models, but over the next four years CIOs expect this number to increase to 43 per cent. Also, CIOs may be able to reallocate IT budget savings, rather than simply returning them to the organisation in 2011, and fund infrastructure changes and new projects by reallocating resources within that budget. CIOs report that their organisations are emphasising growth.

A ranking of business strategies reported by CIOs (see table above) indicates that growth is a core expectation for 2011 and beyond. The move to growth appears to be more of a change in emphasis than a restructuring of business strategies and business expectations for IT, as prior top concerns for reducing enterprise costs and improving business processes remain important. Average IT functions dedicated 66 per cent of its budget to day-to-day operations leaving little room for transformation of business strategy. CIOs see the introduction of Internet service-based technologies as changing that equation, and releasing between 35 to 50 per cent of infrastructure and operational resources for innovation and growth. In the lead-up to the middle of this decade, CIOs polled by Gartner expect ‘dramatic changes in IT’ as they adopt new technologies and raise their contribution to competitive advantage, adds McDonald.

More information:
www.gartner.com/cioagenda

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