The CIO Agenda 2002:  Keep your Balance

CIOs who want to maintain credibility must be able to deliver short-term results while still maintaining the long-term view, according to Gartner’s 2002 survey of its 1500 CIO Executive Program members. The survey captured the top ten enterprise business trends, the top ten IS management issues, and the top ten technology trends

The top two business trends are increased pressure on enterprise costs and budgets, and the demands for greater stakeholder returns. The economy continues to be volatile. Even where the signs are positive, the real business emphasis is now on net profits, not revenue or growth at any cost.

IT budgets which have been growing around ten percent year-on-year for several years have now stalled.

It’s not all bad news though. It is easier to recruit the right mix of business skills and competencies.

Top IS Management Priorities

Three main findings summarize IS management priorities: improve business and technology synchronization, deliver value while cutting costs, and fix security and business continuity.

The top two priorities focus on linking business and IS, and providing leadership and guidance for the board and executive.

Demonstrating business value was also in the top five. Projects with longer-payback periods are being put on the back burner for another year.

Top Technology Priorities

The prevalent requirement to demonstrate short-term business value has changed technology priorities.

The top technology priority is to enhance security tools, followed by working on Web design and content management. From this, it appears that in 2002, the focus will be on short-term infrastructure needs rather than longer-term projects, which could force experimentation with new technologies to be put on hold.

Again, there is some good news. By 2005, infrastructure for mobile technologies is expected to be in place, even though it’s not clear when and how this infrastructure will occur.

CIOs Will Be On The Move

Seventy-five percent of CIOs expect to be on the move and much of that into other executive positions. Over one-third (38 percent) indicated they would take on a CIO role in a different enterprise or division in the next two to three years. However, almost the same percentage (37 percent) said they expected their next move to be to a general business role. Some 30 percent had no plans to move.

Three guidelines will assist CIOs to address today’s pressing cost issues while protecting the future e-enablement of the enterprise and the viability of IT assets. They are as follows:

Guideline 1: Respond to the immediate, and proactively cut costs.

List high expenditure areas and work out how to reduce each one using IT. Maintain services. Review service-level agreements (SLAs) and ruthlessly evaluate projects.

Question the necessity of new technology. Think architecture before technology. Take a broad architectural view of new initiatives so that future ramifications are included in discussions about them. Finally, define appropriate outsourcing strategies, taking a strategic sourcing approach.

Key mistakes to avoid are cutting the muscle along with the fat. Identify and retain your best resources. Don’t implement a hiring freeze, as it shuts you out of a fertile talent market. Don’t eliminate rewards and recognition. Use recognition to maintain morale and productivity.

Don’t stifle innovation. This de-motivates your best people (who tend to work on such ventures) and cuts your enterprise off from its future. A better target for cuts is the “make work” that creeps into enterprises over time.

Don’t decrease flexibility. Costs may decline but outputs will decline faster, as will morale.

Don’t stop communicating. It leaves a void that is filled with rumors and gossip. Don’t fail to lead. Tough times make leadership even more critical. Leaders need to paint a believable vision of the future.

Guideline 2: Don’t forget the important – develop your enterprise’s IS leadership capabilities.

Continuously strategize for the IS/business linkage, implement ‘uncertainty planning’, and seek innovative uses of technology using disciplined processes.

Guideline 3: Create an environment where leadership will flourish.

Be effective through the use of IT governance to encourage desirable behavior and ensure tough decision are made. And be connected through the four habits of the Gartner EXP Executive Success Cycle: shape demand, set expectations, deliver and lead.

Dr. Marianne Broadbent is Group Vice Presicent and Global Head of Research for Gartner’s Executive Programs.