Doing more with less and proving the IT department is vital to the business during the downturn are two of the many challenges that CIOs are facing in 2009, according to ZDNet Asia's sister site Silicon.com's exclusive research.
Now in its fifth year, the silicon.com CIO Agenda surveys U.K. technology chiefs on a number of areas including their business and technology strategies.
When asked to list the challenges and obstacles facing the CIO in 2009, the respondents revealed the tightrope that technology chiefs have to walk, simultaneously cutting costs while proving the value of the IT organization.
According to one CIO, "demonstrating that we add business value" is the challenge of the year. For another, "maintaining the credibility of the IT department in the face of a business desire to cut costs" is the most important issue.
It's a subject that has been thrown into sharp relief by the worsening economic situation, with another IT boss saying cost-cutting is "inevitably" expected at the same time as the IT department is "maintaining the service levels required and retaining our best staff".
Another tech boss summed up the challenge as "rapid delivery without high investment to meet the needs of the business as it reacts to difficult market conditions".
For many CIOs, the recession is also impacting the IT department by altering the business' long-term view.
One IT head raised the challenge of "managing through a downturn with reduced budget but still preparing the business for the end of the downturn phase" while a fellow tech chief warned that the business is more risk-averse and wants to postpone initiatives until the economic climate becomes clearer, adding: "Expectations of service will not reduce, but support for investment, training, people development will."
According to the CIO Agenda 2009 survey, the size of the overall 2008 IT budget as a percentage of company revenue varied greatly across the 16 CIOs and IT directors who gave the information, going from 1 percent up to a whopping 25 percent, although in this case the IT chief acknowledged the budget was likely to fall this year.
Excluding this mega-budget, an average IT budget across the survey came in at around 4.4 percent of company revenue. Most of the CIOs surveyed expected their budget to be flat or to decline slightly this year, with only two predicting their budgets will rise.
The proportion of the IT budget spent on new investment also varied considerably, from 10 percent at the low end to 60 percent at the high end, giving an average of 33 percent across the CIOs who provided the data. All but one expected that spending on new IT investment to either stay the same or drop this year.
Perhaps unsurprisingly, with flat or declining budgets and less investment in new technology, nearly two-thirds of those surveyed admitted they were less optimistic than they were last year.
One positive note--for CIOs at least--was few IT chiefs are reporting a skills shortage, except for some gaps in database administrator roles, Itil expertise and security, although one IT chief warned that graduates are still too technically oriented and lacking in "soft" business skills.
Steve Ranger of Silicon.com reported from London.
Play video
Technology Cost Reductions: Getting more value in tough times.
We all know that times are tough. Budgets are dropping and virtually every company genuinely needs to get more value for every IT buck spent. The good news is that a majority of enterprises can improve IT ROIC through basic technology portfolio management techniques and business processes. The really good news is that these same enterprises do not have to invest much time, OR effort, in the initiative.
While I recognize that, over the past few years, every standards group on the planet has jumped on the technology asset management bandwagon, I'm also well aware that their collective solutions are simply too complex to be cost-effective.
My advice? Based on over two decades in the industry... There are dozens of potential cost reduction techniques that can be used to improve value—without investing even more scarce revenue in minimally successful initiatives that might take years to implement and/or bring to fruition.
Ready to get started? For the larger enterprise, begin reconciling tech invoices. Ensure you get what you pay for—all the time, every time. Ensure support and maintenance genuinely match your proven needs. Shut down all unnecessary auto-renewal agreements. Depending on the complexity of your environment, these simple steps could result in enormous savings. Cost to begin? Nothing more than a few hours a week. Pay-back period? Nearly immediate.
For the smaller enterprise, begin by putting all that tech hardware to sleep when not in use, or unplug all those chargers and unnecessary time pieces. You can save as much as $100 per year per device in reduced power costs. Cost to begin? Nothing more than a little planning and patience while a system comes up to speed.
There's more. A LOT more, but this isn't the forum to teach you all the nuances of technology portfolio management.
Posted by Alan Plastow on Saturday, March 14 2009 08:05 AM