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The Heat Is On

The Heat Is On

Gartner’s CIO survey finds innovation demands are increasing, despite budget constraints

Each year, EXP surveys our worldwide CIO membership about their top enterprise business trends, CIO management priorities and CIO technology priorities. An unprecedented 620 EXP CIOs responded to this year's survey, making it we believe the world's largest. The findings paint a challenging scenario for CIOs. In 2003, CIOs must work with business executives to clarify business and technology trade-offs in an environment of severe cost pressures. Business budgets are showing some increases, but IT budgets remain flat. Despite this, the business is making more demands on IS.

Key Business TrendsThe four top enterprise business trends are continuing cost pressures, data security concerns, faster innovation and a higher focus on risk management. The big story is the concurrent rise in the need for both innovation and risk management. CIOs are being driven to keep costs down and manage business risks better while concurrently supporting faster innovation and increased security.

The "must-dos" are business continuity, data security, privacy and keeping pace with the business. The "want-to-dos" have to do with satisfying stakeholders, customer relationship management (CRM), knowledge management and e-enablement. Enterprises are still trying to keep these on the table, but their priority has slipped.

The increased priority for faster innovation, while seemingly inconsistent with the cost pressures, is indicative of the business strategy to stimulate demand and grow revenue, via a shorter product cycle. Faster innovation is important in a more globalised and competitive world. So the pressures on flat IS budgets are even greater.

The impact of September 11 has been significant. Business executives now realise just how dependent they are on IT, so business risk management has moved to number four.

Last year the hype was on CRM. Now the pressure is on that technology to fulfil its promise. Customers actually want self-service, so they can check that their orders are being fulfilled and make changes if required. A key business driver is to be responsive to the customer, but in a way that's affordable to the company.

Requirements for greater transparency in financial and management reporting appeared for the first time. It was expected to be a big issue in North America, but EMEA and Asia/Pacific rank it equally high.

Concern about personal data privacy also appears in the top 10 for the first time. The implications of terrorism have brought data security and privacy to the fore. Increased government action to combat terrorism is leading to regulations that invade individual privacy. IS must ensure compliance, but that's counter to achieving efficiencies by using personal data across divisions and companies.

Management Priorities The top-three CIO management priorities are providing leadership and guidance for the board, demonstrating the business value of IS and improving IT governance. All of these focus outward from the IS organisation, not inward. This outward shift could demonstrate the maturation, business criticality and increasing complexity of the CIO's role. It may also demonstrate the importance of executive relationships.

Surprisingly, reducing total IT costs is fourth priority. This is higher than it's been in the last two years, but still significantly lower than the priority of business cost reduction. Effective CIOs have been successful in educating their business colleagues that investing in IS can bring bigger savings to business.

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