Forget "doing more with less" -- that's the IT mantra of yesteryear. Now IT departments are making better use of their resources, and though they're not necessarily doing more things, they are going about their tasks differently, according to findings from a Gartner survey released today. "They're working smarter, not harder," says analyst Mark McDonald.
Gartner surveyed more than 1,500 CIOs through December 2008 to find out how they're rising to the financial challenges of 2009. The key finding is that IT budgets largely will remain flat, which makes sense; because the average IT budget is 4 percent of sales, a 10 percent cut in IT spending doesn't save very much, McDonald says. But if the IT budget is used to restructure the other 96 percent of revenue, savings can be much higher.
A shakeup in IT priorities That's why CIOs are now shaking up IT resources, instead of trying to squeeze out a little more than before. The Gartner survey found that in 2008, CIOs had spread resources across all divisions, so they could deliver something to everyone. But now, many CIOs are concentrating on only a couple of projects that deliver results quickly, such as retiring old systems, consolidating duplicate CRM or reporting systems, and changing the cost structure within IT processes, per quarter.
If this strategy change means some divisions won't receive benefits for a while, so be it. "If I try to pursue five or six initiatives simultaneously in this environment, chances are conditions will change and render half of them irrelevant," McDonald says.
Projects that take priority are also ones with an internal focus, such as reducing costs and improving business processes. External-facing projects such as attracting and retaining customers and creating new products or services -- formerly top IT priorities -- are less important. "With companies' ability to predict revenues increasingly challenged, the best thing you can do is get strong operational control," McDonald says.
Companies are reprioritizing projects around certain technologies, such as storage, cloud computing, virtualization, security, and niche analytics. The Gartner survey finds that CIOs are looking closely at using technology they already have rather than evaluating new technology to purchase.
However, they are also looking at cheap Web 2.0 tools to fill collaboration gaps and even free up middle management's time. "The collaboration, coordination, and discussions that can happen via Web 2.0 normally would have been done in facilitated group meetings with middle management connecting people together," McDonald says.
CIOsnot willing to support their IT staff's skills Because resources for discretionary projects likely will be reallocated, IT staff members on those projects face some risk. While the Gartner survey didn't ask about staff reductions, IT staff represents about a third of the budget -- "and, in some regards, it's the easiest part to change," admits McDonald.
With so much change going on, an IT staff needs to be like a well-tuned SWAT team: adaptive, fast, and able to handle uncertainty. Yet the Gartner survey shows many CIOs don't see the need to help their teams act this way. Improving the skills of their staff is only the eighth-highest priority among surveyed CIOs, falling from their third-highest priority in 2008. "We think CIOs are making a significant mistake in believing that they can achieve the kind of results they're looking for without investing in their people," says McDonald.