What are CIOs looking to do in 2011? You may find it instructive to compare your plans with a global analysis compiled by Gartner, which asked over 2,000 IT leaders representing over $160bn in corporate and public-sector IT spending across 50 countries and 38 industries that same question, between September and December last year.
Gartner, as is legitimate, has produced its own analysis of what its researchers found, and for it, the message is that "CIOs must re-imagine IT to support growth and competitive advantage" but that at the same time, they are being asked to balance the two drivers that their "organisations are emphasising growth" at the same time as maintaining the expectation of their "continued vigilance on cost and operational efficiencies".
They are certainly being asked to do more with less/about the same. CIOs’ IT budget projections for 2011 are globally flat, with an average budget increase of just 1%.
But there is some good news here; though admittedly CIOs do not report IT budgets returning to their 2008 (pre-recession) levels, the number of those experiencing budget increases in 2011 outnumbered those reporting a cut by almost three-to-one.
But we said this is a global study. And CBR readers are facing perhaps the most challenging of all business-IT environments. While European CIOs report an average budget decline of 0.4% in 2011, us Brits say they saw a pretty shocking 6.9% cut, compared to their more fortunate German (2/7%) or French (0.2%) peers.
In this context, any technology that can give me the functionality I need at less expense will get a welcome, so no surprise in the research group’s finding that CIOs expect to adopt cloud services "much faster than originally expected".
By 2015, we are told, 43% will have "the majority of IT running in the cloud or on SaaS technologies" – compared to a mere 3% at the moment.
Why? Because they don’t expect more money so want to recycle what they can to better things, Gartner believes: "CIOs anticipate the ability to fund infrastructure changes and new projects by reallocating resources within that budget. This approach to funding will become a standard operating procedure since [we do] not see CIO IT budgets recovering to their 2008 peak until 2014."
"CIOs and IT have been boxed in between modest budget growth and growing legacy requirements," comments Mark McDonald, group vice president and head of research for Gartner Executive Programmes, the CIO education unit of the firm that carried out the poll.
"New lighter-weight technologies, such as cloud, software as a service and social networks enable the CIO to redefine IT, giving it a greater focus on growth and strategic impact. These are two things that are missing from many organisations," he said.
As we well know, a lot of budget is devoted to the dreaded "keeping the lights on" – Gartner says 66%, I’ve seen higher. But, it contents, that’s changing: "CIOs see the introduction of Internet service-based technologies as changing that equation and releasing between 35 to 50% of infrastructure and operational resources for innovation and growth… This is creating a new CIO success cycle, one based on creating and realising new sources of value, in addition to cost-effective IT operations."
Well, we’ll see. I think a jump from 3 to 43% is not that credible for cloud take-up and I think a 30% redirection of opex to capex a bit ambitious.
But this study does show that CIOs have started to accept that the big chequebook is back in the drawer for the time being but that’s no excuse not to just accept the status quo. And that’s got to be a very encouraging start to 2011, surely.
If you are interested in more detail of the survey, including what the researchers think will happen in China, go here.