The results of a recent survey conducted by the research firm Gartner, Inc. imply a renewed confidence in IT investments, with signs showing that CEOs will be more focused on growth instead of cost-cutting for the year ahead.
In fact, the role of IT as a key element in post-recession strategy is being embraced by sixty-two percent of surveyed CEOs by the firm. Moreover, a solid forty-two percent of business leaders are already focusing more on revenue growth rather than cost control in 2010.
The survey of 190 senior business executives, eighty-one of whom were CEOs, asked questions regarding the respondents' views and priorities for the next calendar year. The respondents represented firms based in the US and the UK that have annual revenues of more than 1 billion dollars. Technology service providers and government organizations were not invited to participate in the survey.
"These preliminary results will help CIOs and their teams with the planning and budgeting work they are doing in the next few months," said Mark Raskino, a Research Vice President and Gartner fellow. "Business leaders are gasping for growth after a long period of holding their breath, and they are expecting to increase the importance of IT in their post-recession approach," explained Raskino. Conversely, at the start of 2009, CEOs focused more on cost-cutting – in order to protect their organizations from the effects of the recession. As mentioned, a dramatic change in attitudes and focus is happening in 2010 as seventy-one percent of the surveyed business leaders shared plans to move from a belt-tightening approach towards a revenue growth approach.
Meeting business leaders' expectations and expecting changes
"It is critical that CIOs review business leaders' rapidly changing tactical business priorities and often unstated new expectations of where IT can help as the economy turns. CIOs are in a good position to have that conversion right now. They should also take advantage of business leader's relatively positive attitude towards IT investment during budget negotiations," added the Gartner fellow.
Only ten percent of business leaders do not expect revenue growth to be their primary driver until beyond 2011. As a result, according to Gartner, a switch to revenue targets will "impact the IT project portfolio." Therefore, CIOs should definitely expect priority changes in key IT projects.
In terms of changes in attitudes towards IT investments, forty-three percent of respondents reported that they will increase investments in 2010, while forty-five percent will keep investments at the same level, and only thirteen per cent will decrease IT spending.
"These findings reinforce Gartner's IT spending forecast of 3.3 percent growth in 2010," said Mr Raskino. "With this warm attitude to IT, CIOs should stand their ground if peers attempt to gain investment share at the expense of IT."
The change in directions from cost-cutting to investment also coincides with the recognition of IT's contribution to improving processes – and IT's contribution towards flexible working and decision making implementation. Further, new IT investments will additionally emphasize talent retention and client acquisition.
"IT leaders should propose new ways that technology can be used to support existing and new customers. They should also discuss talent-management issues and consider special provisions for key talent," said Mr Raskino.
