International research firm Gartner says 2004 will see business re-alignment and competition intensify, while IT vendor consolidation and restructuring will continue and the credibility of IT will remain fragile among many business executives.
"In short, they [chief information officers, or CIOs] need to cut costs and innovate simultaneously," says John Mahoney, Gartner research managing VP.
Gartner`s 10 CIO "must-do resolutions" for 2004 are grouped into three strategic themes:
Maintain cost discipline, rationalise and consolidate further
1. Refresh hardware bought before 2000 and ageing software.
2. Continue consolidating IT infrastructure and applications.
3. Plan for new competences and give most valuable staff an unexpected pay rise.
Assess imminent trend shifts in business and technology, prepare to respond
4. Make clear technology choices and set policy for the future.
5. Stay in direct touch with key technology developments.
6. Anticipate external drivers of uncertainty and complexity.
Invest in mid-term opportunities, pull back from short-term expedients
7. Migrate towards real-time infrastructure.
8. Create a business process skills competency centre.
9. Build partnership management competences and processes.
10. Plan to overspend your budget.
Out with the old
Many CIOs have extended the lives of servers, PCs and other equipment as a cost control tactic since 2000. Ageing hardware and licensed software will start to hinder business agility, and any servers or PCs bought in 1999 or earlier must be seriously considered for replacement in 2004, says Gartner.
While refreshing old hardware, it will be important to maintain the momentum of recent asset consolidation and rationalisation that will release funds from operating costs to add to IT budgets, says the research firm. It is also vital to keep up the culture of efficiency to control costs and manage project risks.
CIOs should ensure they have adequate capabilities in areas of growing importance such as IT business leadership, risk and security management, enterprise architecture and application integration, as well as real-time and mobile technologies.
Gartner urges CIOs to ensure they directly experience a range of new technologies and services, and prepare to advise management on the opportunities they pose for their business as conditions improve.
Deploy new IT ideas
Technologies for 'hands-on` review in 2004 include Linux desktop with open source personal productivity applications, blade servers, systems and devices for handling voice traffic over Internet protocol networks, instant messaging and similar collaboration tools, and developing tools for Web services.
"The growing maturity of new technologies and development methods is a good reason to end the 'wait and see` policy towards deploying new IT ideas," says Mark Raskino, Gartner research director. "Explicit policy will need to be determined in several technical areas to set the precedent for new projects."
Raskino says CIOs must get off the fence on issues such as J2EE or .Net, Linux and open source software, wireless applications, outsourcing and legacy applications.
According to a Gartner survey of CIOs, more than a third of IS leaders see business process improvement as a key issue for 2004.
Fusion is the future
Gartner believes that "business process fusion", a focus on business processes driven by the emergence of new software platforms and architectures, will be key to becoming a real-time enterprise.
However, it says at least half of medium to large enterprises lack specialist business process skills.
Gartner advises CIOs to "re-tool" their IT workforces by investing in technology-oriented business process skills development, and setting up business process competency groups to support business initiatives in process change.
This will ensure internal IS staff can provide higher-level contributions to the business, as more programming and data centre operations work gets outsourced.
"Juggling innovation and budget control is going to be hard but, for the dexterous, it`s going to be worth it as they begin to create a real-time enterprise," Raskino says.
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