CIOs must do more with less, says Gartner

29 Jul 2005

Chief information officers (CIO) are being forced to do more with less because their IT budgets are not increasing with the growth in business, new analysis from Gartner has found.

In its report, entitled IT Leaders’ Next Big Decisions, Gartner said the role of technology within a business is changing. CIOs must decide whether IT simply enables the business or actively contributes to it.

According to Gartner’s analysis, this change would involve IT departments changing from having an internal focus with an emphasis on cost containment, to supporting business growth and innovation. “The challenge for CIOs will be to provide appropriate support in a company’s pursuit of business growth while working within an era of constrained IT budget growth,” the report said. “Simply put, CIOs and their organisations must deliver more value than the business can buy in the marketplace – or else face commoditisation.”

Gartner said this change in focus would require CIOs to excel in three distinct, but related, roles: they must be the senior technology executive responsible for leading the IT organisation, mapping closely to enterprise strategy. A CIO should also be the technology leader responsible for applying technology to enterprise issues and challenges, such as IT-enabled innovation. In addition, the CIO should be a member of the executive team who needs to develop business, technology, leadership and personal skills, with more IT transparency and better communication in business terms.

According to the report, the top three priorities for CIOs this year are: delivering projects that enable business growth; linking business and IT strategies and plans; and thirdly, demonstrating the business value of IT. Last year’s top-ranked consideration, developing leadership in the senior IT team, only reached ninth place in this year’s survey. These objectives, which support growth, are closely aligned with the goals of CEOs, Gartner said.

The question of ‘What is the role of IT in the business?’ is a fundamental issue for CEOs, boards of directors and CIOs to resolve as organisations look for business growth, Gartner said. “One means to accomplish this is to adopt a zero-based budget approach to force active consideration of the benefits and objectives for spending requests,” the report suggested.

By Gordon Smith