By Andy McCue
Thursday, February 15 2007 10:54 AM
URL: http://www.zdnetasia.com/news/business/0,39044229,61990131,00.htm

Ambitious business growth targets for 2007 are putting yet more pressure on tech chiefs to innovate, reduce costs and deliver better quality services, according to Gartner.

The analyst house noted in its annual CIO Agenda survey that two-thirds of the 1,400 CIOs surveyed globally said their companies expect to increase their market share or expand in 2007, and that business executives want IT to raise current performance and build new capabilities. But there appears to be a widening gulf between what the business and what IT view as priorities.

The key business priorities for 2007 are improving processes and workforce performance, attracting new customers and reducing costs, the Gartner survey found. By comparison the CIO's immediate priorities remain internally focused on IT services, IT governance, improving the links between business and IT, and demonstrating the value of IT.

The increased expectations of IT come at a time when IT budgets are fairly static or increasing only slightly. The survey found global IT budgets will increase by an average of three per cent in 2007, while a third of CIOs predict no budget change and 19 per cent report a planned IT budget cut.

Much of that resource is being used on simply operating and maintaining complex IT infrastructures. Almost two-thirds (63 per cent) of IT budgets are taken up by infrastructure and transactional costs - in other words, 'keeping the lights on'.

Dave Aron, VP of research for Gartner's executive program, told ZDNet Asia sister site silicon.com: "That's a lot of money, time and energy managing an overly complex IT base. There is a lot of complexity in their organisations."

Innovation is seen by enterprises as critical to building new capabilities that will support business growth but only 26 per cent of CIOs said their current innovation level is sufficient to meet those expectations.

Aron said: "Most companies are stuck doing their daily tasks. The last couple of years were about building the infrastructure platform and the next couple of years are about building a platform for growth, and innovation processes and tools are part of that."

Talent and skills remains a problem area for many IT departments with only a handful of the newer project management, architect and business analyst roles in evidence, according to Gartner.

Aron said: "Most IT organizations are still skilled for doing traditional IT work."

Gartner said cost reduction, building business understanding and improving relationships are now an expected "part of the game" for IT, and that to really make a difference CIOs need to focus what little discretionary spend and resource they have in "amplifying business strategy".

The top tech priorities for 2007 highlighted in the survey are business intelligence, enterprise applications such as ERP and CRM, legacy modernization, and networking, voice and data communications.

Andy McCue of Silicon.com reported from London.