Gartner EXP shows how CIOs are preparing for the upswing
Stamford, CN — March 9, 2004 — Chief information officers (CIOs) are confident there will be increases in information technology (IT) spending in 2004, but they don't intend to boost spending until there is a business recovery, according to a survey of leading CIOs conducted by Gartner Executive Programs (EXP), a unit of Gartner Inc.
Gartner EXP surveyed 956 CIOs from organizations around the world, making this the most comprehensive study of CIO behaviors and beliefs, according to Gartner.
Signs of a business recovery are forming, and CIOs are anticipating an IT spending increase of 1.4 percent in 2004. More than 40 percent of those surveyed believe this increase will occur in the second half of 2004.
"CIOs are being very conservative, laying down the foundations for growth, but not aggressively pushing for it," said Marcus Blosch, vice president and research director for Gartner EXP. "Having weathered the storm of declining budgets and increased management expectations, most CIOs expect to focus on improving the contribution IT makes to the growth of their organization, while still keeping a control on costs."
Business priorities for CIOs remain focused on security breaches, operating costs and data protection/privacy. Outsourcing is a key initiative for many companies; however, business process outsourcing (BPO) is a significant blind spot for CIOs, Gartner said. Two-thirds of CIOs do not see BPO as important either now or through 2007. Gartner EXP analysts said in many cases CIOs are not included in BPO decisions, and many suppliers go directly to business unit executives.
"BPO is not just a business process decision," said Mark McDonald, group vice president for Gartner EXP. "CIOs need to be more engaged in these discussions as outsourcing business processes often involve outsourcing the supporting technologies."
The bulk of a CIO's activity must be aligned with a specific enterprise's stage of development. As a result, a CIO's priorities, behavior and effectiveness are dictated to a large degree by various company-specific factors. Gartner EXP has categorized three types of environments that collectively describe what most CIOs' are managing in this year. These three types include "maintaining competitiveness," "fighters" and "breakaways."
The survey showed 69 percent of CIOs are in enterprises that are "maintaining competitiveness." In these companies, CIOs are attempting to balance effectiveness, efficiency, cost management and operational integrity.
Fifteen percent of the CIOs are in enterprises that are "fighting for survival." These CIOs are more efficiency focused, devoting more of their budget and attention to cost disciplines.
The environment that CIOs strive for is the "breakaways." Sixteen percent of CIOs surveyed are in "breakaway" enterprises. CIOs in these companies are seen as business leaders and focus more on effectiveness, growth and agility.
"CIOs in a 'breakaway' segment work hard at gaining the trust and respect of the CEO and senior business colleagues, giving them greater scope to operate," Blosch said. "They use their increased scope to be more proactive, aligning themselves more tightly with the business. As a result, breakaway CIOs deliver more to business needs and make a bigger contribution to the superior performance of the breakaway enterprise."
Three trends will shape the CIO agenda in 2004, according to survey results. CIOs who understand these trends will know how to make the right strategic and technical decisions now and for the future. These trends include:
* Businesses are more interconnected and electronic than before.
* Information systems capabilities are influencing core business capabilities.
* Trust and time with executive peers drive CIO credibility.
"From 2001 to 2003, the watchword was "do more with less." In 2004, the watchword is changing to "earn as you go." CIOs who deliver business results will create a virtuous circle where they garner more resources and executive attention," McDonald said.