CIO: Cut IT Officer
Analyst firm Gartner’s recent survey of 900 CIOs provides us with a sense of where the IT industry is today. 54% of the CIOs have made no budget adjustments. 42% reduced their Q1 budgets by an average of 7.2%, whilst 4% actually increased their budget. Averaged out this equates to an overall budget cut of 4.7%.
Clearly organisations are not seeing the IT function as the hero of the hour and are just treating it as another cost cutting target.
There is an interesting trend away from outsourcing, which one would expect to see grow in these economic conditions. Only 9% saw increased use of outsourcing as a way to address budget challenges.
There is a feeling that this quarter’s decline is in effect an adjustment to the optimistic planning preceding the quarter. And that in effect the correction has now been made for 09 meaning that there should be no further cuts this year.
The general feeling amongst CIOs is that they expect the economy to return to ‘normal’ between the first and third quarter of 2010.
My feeling is that it is unwise to make such emphatic statements given the uncertainty that still remains in the market. In any case, it seems that the IT industry doesn't appear to be making the business case for IT. So it looks like IT departments will have to maintain a cost-oriented approach until the business deems that IT has a role to play in the forthcoming recovery. For many businesses this will be too late.
The question is ‘are CIOs brave enough to flag this to the driver (CEO)’? The alternative is to sit politely in the passenger seat even though it is obvious that the light at the end of the tunnel is an imminent date with an articulated lorry. Perhaps the real problem is that CIOs already know this. However whilst seeing the latter option as unpalatable it is a slightly better short term employment option.
Maybe we need to change the CIO motivational package to include a fiduciary duty to contest boardroom decision-making when it clearly is not in the interest of the stakeholders?