Chief information officers plan to spend more on technology, but their focus has shifted from products that will help control costs to those that can help companies grow their businesses, according to a survey of more than 1,300 CIOs in 30 countries by Gartner. The survey found that the execs expect information technology budgets to increase by 2.5 percent this year, with security enhancement tools and business intelligence software rating first and second, respectively, on the CIOs' list of top 10 technology priorities, Gartner says. The spending increase, while small, is the highest in three years.
"Businesses are concentrating on growth in 2005, rather than recovery," Gartner analyst Mark McDonald notes. "But they are not significantly increasing their expenditures for 2005, which means CIOs have to create more value for the business [from IT] than businesses can buy in the marketplace."
If CIOs fail to build an IT organization that contributes to profits, then more of the operation could be outsourced to third parties. "Savvy CIOs recognize that they have to specialize to create more value faster than service providers and other alternatives," McDonald says.
Being able to provide adequate security is the first step in deploying technology to help boost business growth, Gartner says. Business intelligence software, on the other hand, is seen as an IT organization's contribution to help the enterprise find ways to make business processes better and more efficient.
In the past, companies have focused IT departments on improving the speed and reducing the cost of individual business processes within a unit or geography, McDonald says. That, however, has changed, and CIOs are now looking to "reengineer processes end-to-end from the customer perspective and integrate previously autonomous business processes, information and application software across business units and geographies."
CIOs see themselves as "at risk" based on chief executives' views of IT and its performance, Gartner says. As a result, the tech execs are looking to raise and stabilize the quality of IT services.
Six out of 10 CIOs surveyed believe they need to upgrade their own business skills, as well as those of their staff, to meet their employers' current and future needs. "Improving business skills is one of the top CIO initiatives," McDonald relates.
Among the executives who put business process improvement in the top five priorities for 2005, only 20 percent believe the IT organization has the necessary skills to implement such projects.
According to the survey, the top business priorities, in order, from one to 10, are business-process improvement; security breaches and disruptions; enterprisewide operating costs; supporting competitive advantage; data protection and privacy; the need for revenue growth; using intelligence in products and services; focus on internal controls; shortage of business skills; and faster innovation and cycle times.
The top 10 technology priorities are security enhancement tools; business intelligence applications; mobile workforce enablement; workflow management deployment and integration; enterprise resource planning upgrades; storage management; voice and data integration over Internet protocol; customer relationship management; business process integration tools; and server virtualization.
This article previously appeared in InformationWeek.