Gartner EXP Survey Shows CIOs Face Intense Dilemma to Increase Innovation While Cutting Costs in 2003
STAMFORD, CONN., March 17, 2003 — CIOs are feeling severe pressure to accelerate innovation, but at the same time, they're being forced to do so under tighter budget constraints, according to a survey of leading CIOs conducted by Gartner Executive Programs (EXP), a unit of Gartner, Inc., (NYSE: IT and ITB).
From September 2002 through December 2002, an unprecedented 620 global EXP CIOs participants responded, making it the world's largest CIO survey. For the third consecutive year, cost pressures are the No. 1 business driver for CIOs. The combination of security and risk management concerns, along with faster innovation is making for a very challenging scenario.
"Being more cost-effective, reducing business risk and innovating faster are extremely difficult to achieve concurrently," said Ellen Kitzis, group vice president for Gartner EXP. "Together, they risk breaking the budget. For CIOs it means adding redundancy to address business risks, which increases their costs."
The survey showed that "must-do initiatives" such as business continuity, data security, privacy and keeping pace with the business, have taken precedence over the "want-to-do's," such as satisfying stakeholders, customer relationship management (CRM), knowledge management and e-enablement.
These new pressures are changing the role of the CIO. Those that fail to adapt to the new environment will find themselves at a dead end. Intense cost pressures amid increasing business demands will suit those CIOs that are able to build bridges to the rest of the business, show leadership and demonstrate the business value of what they do.
CIOs know they have to work with their C-level colleagues to inform and manage their expectations, so that these executives understand the trade-off choices and take joint responsibility.
"IT governance is about ensuring the right people are making the right decisions for the business and being held accountable," Kitzis said. "CIOs have to be multilingual and act as the pivot point: achieving business goals through informed decision making, implementation and accountability."
In comparing business and IT budgets, the CIOs surveyed said business operating budgets are growing faster than IT budgets. Gartner analysts said there are two ways to look at the trend. One is that there is business skepticism around how effective IT investments have been. The other angle is that many enterprises have genuinely been able to reduce costs without reducing their business impact.
From a management perspective, CIOs now rank "providing guidance for the board and executives" as the No. 1 management priority in 2003. In 2002, this was ranked as the No. 6 priority. "CIOs are providing guidance to these key executives, while continuing to demonstrate the business value of IS and IT. They are also spending time on a new focus area this year: IT governance. As enterprises become more complex and IT a big budget item, the role of IT governance is becoming critical," Kitzis said.
CIOs see their top technology priorities as securing systems from internal and external threats to better integrate applications and provide greater data availability to all stakeholders of the enterprise.
Applications integration, middleware and messaging have climbed steadily to the No. 2 technology priority, as cost-effective means to leverage legacy systems to be more agile and support - or, at least, not constrain - business innovation. Enterprise portal deployment is another cost-effective approach to making data more easily available to employees, business partners and customers.
Additional information is available in the Gartner EXP 2003 CIO Agenda report. This is the largest survey of its kind. Industry sectors represented include: government, financial services, manufacturing, utilities, communications, retail, healthcare, education and transportation.
About Gartner EXP
Gartner Executive Programs (EXP) is a member-based organization of more than 1,700 CIOs worldwide. Members benefit from the convenience of a single source of knowledge, one-to-one counsel, personalized service, the shared knowledge of the world's largest community of CIOs, and the assurance of Gartner objectivity and insight. Additional information about Gartner EXP can be found on the Gartner Web site at http://www.gartner.com/exp.
About Gartner:
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