IT Budgets Increase; CIOs Shop For Tools to Help Grow Businesses - InformationWeek

InformationWeek is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them.Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

IoT
IoT
News

IT Budgets Increase; CIOs Shop For Tools to Help Grow Businesses

CIOs have changed their spending focus from products that help control costs to those that can help grow their businesses. Think security enhancement tools and business intelligence software for starters, says a Gartner report.

Chief information officers plan to spend a bit more than last year on technology, but their focus has shifted from products that will help control costs to those that can help companies grow their business, a market research firm said Friday.

A survey of more than 1,300 CIOs in 30 countries found that the execs expect information-technology budgets to increase by 2.5 percent this year, with security enhancement tools and business intelligence software rating first and second, respectively, on the CIO's list of top 10 technology priorities, Gartner Inc. said. The spending increase, while small, is the highest in three years.

"Businesses are concentrating on growth in 2005, rather than recovery," Gartner analyst Mark McDonald said. "But they are not significantly increasing their expenditures for 2005, which means CIOs have to create more value for the business (from IT) than businesses can buy in the marketplace."

If CIOs fail to build an IT organization that contributes to profits, than more of the operation could be outsourced to third parties.

"Savvy CIOs recognize that they have to specialize to create more value faster than service providers and other alternatives," McDonald said.

Being able to provide adequate security is the first step in deploying technology, some of it Internet based, to help boost business growth, Gartner said. Business intelligence software, on the other hand, is seen as an IT organization's contribution to helping their employer find ways to make business processes better and more efficient.

"Business intelligence is changing from the quantity of data to the quality of data in terms of getting the right information to the right people at the point of need," McDonald said.

In the past, companies have focused IT departments on improving the speed and reducing the cost of individual business processes within a unit or geography, McDonald said. That, however, has changed and CIOs are now looking to "re-engineer processes end-to-end from the customer perspective and integrate previously autonomous business processes, information and application software across business units and geographies."

CIOs see themselves as "at risk" based on chief executives' views of IT and its performance, Gartner said. As a result, the tech execs are looking to raise and stabilize the quality of IT services, which, in general, need to be presented in business terms understood by CEOs.

Six out of 10 CIOs surveyed believed they needed to upgrade their own business skills, as well as those of their staff, to meet their employer's current and future needs. "Improving business skills is one of the top CIO initiatives," McDonald said.

Among the executives who put business-process improvement in the top five priorities for 2005, only 20 percent believe the IT organization had the necessary skills to implement such projects.

"The saucy angle is what one CIO told me," McDonald said. "'We're having to invest to replace the experience and skills that we had to let go over three years of cost cutting.'

"Businesses told them to be cheap, so they went out and were cheap. Now businesses are telling them to be better and faster."

More than half of the CIOs surveyed reported concerns over an aging workforce and the difficulty of attracting new people with the right skills to meet the new requirements.

According to the survey, the top business priorities, in order, from one to 10 were business-process improvement, security breaches and disruptions, enterprise-wide operating costs, supporting competitive advantage, data protection and privacy, the need for revenue growth, using intelligence in products and services, focus on internal controls, shortage of business skills and faster innovation and cycle times.

The top 10 technology priorities were security enhancement tools, business intelligence applications, mobile workforce enablement, workflow management deployment and integration, enterprise resource planning upgrades, storage management, voice and data integration over Internet protocol, customer-relationship management, business-process integration tools and server virtualization.

We welcome your comments on this topic on our social media channels, or [contact us directly] with questions about the site.
Comment  | 
Print  | 
More Insights
The State of Cloud Computing - Fall 2020
The State of Cloud Computing - Fall 2020
Download this report to compare how cloud usage and spending patterns have changed in 2020, and how respondents think they'll evolve over the next two years.
News
Top 10 Data and Analytics Trends for 2021
Jessica Davis, Senior Editor, Enterprise Apps,  11/13/2020
Commentary
Where Cloud Spending Might Grow in 2021 and Post-Pandemic
Joao-Pierre S. Ruth, Senior Writer,  11/19/2020
Slideshows
The Ever-Expanding List of C-Level Technology Positions
Cynthia Harvey, Freelance Journalist, InformationWeek,  11/10/2020
Register for InformationWeek Newsletters
Video
Current Issue
Why Chatbots Are So Popular Right Now
In this IT Trend Report, you will learn more about why chatbots are gaining traction within businesses, particularly while a pandemic is impacting the world.
White Papers
Slideshows
Twitter Feed
Sponsored Live Streaming Video
Everything You've Been Told About Mobility Is Wrong
Attend this video symposium with Sean Wisdom, Global Director of Mobility Solutions, and learn about how you can harness powerful new products to mobilize your business potential.
Sponsored Video
Flash Poll