This year will be one of transition, where CIOs move from a focus on efficiency to productivity, and decide how to best leverage resources to seize opportunities in the shifting economy.
This is according to George Ambler, executive partner for Gartner Executive Programmes, speaking on the CIO Agenda at the Gartner Predicts 2010 conference event, held in Sandton yesterday.
“We're in a time of great uncertainty,” said Ambler, quoting Marilyn Ferguson, “it's the place in between that we fear... like being between trapezes.” He said CIOs are faced with difficult decisions regarding appropriate actions to take - “because if you make the wrong move, you could miss the swings and won't be in the right position for the road ahead”.
Ambler reflected on the findings of Gartner's most recent Executive Programmes CIO survey, which involved 1 600 CIOs, in 41 countries, across 27 industries, conducted between September and December last year.
According to the report, “CIOs face an environment dominated by multiple transitions that create their own immediate challenges, as well as the opportunity to position IT for the future”.
Ambler noted that many transitions are happening simultaneously, and at different rates in various industries. As the business environment changes economically, strategically, and technically, it's placing a premium on productivity.
riding out the storm.
“But nobody ever cut costs to greatness, and the focus this year is on driving productivity. The only way mature markets grow is by raising productivity.” The CIO report states that enterprises need to move toward profitable growth and innovation, instead of just supporting current operations on a lower cost base.
The firm adds that the way CIOs navigate this change will set the course for the future of IT, since more than half of CIO respondents believe their IT organisations will change as the enterprise recovers.
“People are looking at how they can take advantage of the new opportunities available in this transition,” said Ambler.
Smarter, not harder
According to Ambler, all the previous gains in CIOs' budgets were eroded in 2009, to the point where CIOs have the same resources today as they did in 2005. And he was quick to point out that demands haven't changed; if anything, they've grown considerably, with pent-up demands from last year now knocking on the door.
To cope with this, CIOs are shifting focus from cost-efficiency to resource productivity, a vital factor for the enterprise to act as the economy improves, states Gartner. As a result, thinking has moved from “doing more with less” to “working smarter, not harder”.
“The key difference in the shift from efficiency to productivity is in the business's attitude, management style, and philosophy,” said Ambler. “Now it's all about introducing changes that leverage points in the business where you can add resources, so you're in a position to respond to new opportunities in the marketplace.”
Productivity focuses on the results and output of resources, not just how much they cost, states Gartner. It adds that executives expect IT to extend its influence in operations through a combination of business process, information, and workforce changes.
Ambler pointed out that productivity assumes there's future work to do, and concentrates on unique capabilities in the business that can drive competitive advantage and value.
Leading role
The way South African CIOs are responding to a global environment geared towards productivity reveals two big themes - both the role of IT and business' perception of that role is changing, said Ambler.
He argued that IT is increasingly being seen as a partner in the business, not just as a supporting function. “Up to now, most business leaders ignored that conversation, but now there's a new appetite in management to engage with IT in building value.”
The recession has brought about a significant shift, said Ambler. “The world has changed and will never be the same; the consumer mindset has changed and will never be the same. Organisations that emerge from the recession are radically different, and the role of IT in these organisations is radically different.
“It's all about reinventing corporate governance so this doesn't happen again and CIOs are becoming more accountable for delivering business results.”
According to Ambler, this involves a switch from being resources-based to results-based. “The typical CIO role, historically, has been as an efficient manager of resources. Now, it's as a contributor to business results. It's not just about driving down costs, but about driving revenue.”
He adds that business performance has become IT's key value contribution. “In the 2000 recession, IT lost its seat at the executive table, but in this recession that hasn't happened. IT has cemented its role at the executive table and business is recognising the potential of IT to contribute to its success.”
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