ANZ CIOs’ tough response to lean times

ANZ CIOs’ tough response to lean times

Leading organisations are not paralysed by the weak economy, but use IT to reduce business costs, reports Gartner.

More than half of the chief information officers in Australia and New Zealand expect ICT budgets to grow in 2009, with an average increase of 1.67 per cent. Twenty-two percent expect their budget to decrease, 19 per cent expect it to remain flat, while 59 per cent expect their IT budget to increase in 2009, reports Gartner.

The latest worldwide CIO survey by Gartner’s Executive Programmes showed IT spending to be essentially flat, with an increase of 0.16 percent in 2009. The survey covered 1526 CIOs, including 85 from Australia and New Zealand, and was conducted in the fourth quarter of 2008 and represents CIO budget plans reported at that time.

Gartner says it is revisiting CIOs who were surveyed to determine the impact of the worsening economic climate, and early responses indicate that the reality is turning out to be very different.

“We expect to see that the budget expectations of ANZ CIOs are now much more aligned with their global counterparts,” says Andy Rowsell-Jones, vice president and research director of the analyst firm’s research group. “At this half-way stage, and part way through our survey update, it appears these early budget expectations were optimistic. However, ANZ CIOs do seem to be responding more positively to the economic crisis than some of their peers in other regions.”

When asked about their organisation’s business priorities in 2009, improving business processes came in at number one for CIOs in ANZ and globally, followed by cutting enterprise costs and improving workforce performance. These priorities are expected to hold steady for the balance of 2009.

The top strategies that ANZ CIOs said they would employ differed considerably from those of their global counterparts. While the top priority for CIOs globally was cost reduction in IT, cutting IT costs came in only at number four in Australia and New Zealand. Instead, better linking of IT’s plans with those of the business, and improving the quality of IT services are the top strategies of local CIOs.

“In 2009, executives face challenging global economic conditions that have not existed for more than 50 years,” says Rowsell-Jones. “The survey results show that more than ever, 2009 is the year for CIOs to be decisive and resourceful in order to succeed.”

Not surprisingly, CIOs across the globe cited the recession as the number-one trend having the biggest impact on the organisation this year. However, in Australia and New Zealand this gave way to government regulation, which was cited as the number-one issue impacting CIOs during 2009.

“The survey results reflect the fact that in Australia and New Zealand, leading organisations recognise the seriousness of economic conditions, but they are not paralysed by them. These CIOs have confidence in their ability to use IT to achieve results in an uncertain economy,” says Rowsell-Jones. “Rather than simply reacting by cutting IT costs, IT can be used to reduce business costs.”

The business and technology priorities of CIOs in Australia and New Zealand are strongly aligned with their global counterparts, with a few small differences.

ANZ CIOs report the following as their top business priorities: Business process improvement; cutting enterprise costs; improving enterprise workforce effectiveness, targeting customers and markets more effectively; increasing the use of information and analytics; attracting and retaining new customers; managing enterprise change initiatives; supporting regulation, reporting and compliance requirements; creating new sources of competitive advantage; and expanding current customer relationships

‘Improving business processes’ has been the number one business priority of IT worldwide since its introduction to the CIO Agenda survey in 2005, says Gartner. This year, more than 57 per cent of CIOs worldwide reported this as one of their top-five business expectations. Supporting regulation and compliance appeared on the top 10 list for ANZ CIOs, but not on the global list.

For the fourth year in a row, business intelligence (BI) applications were ranked the top technology priority by CIOs in ANZ and around the world. Security technologies appear at number eight on the global list, but was not in the top 10 in ANZ. Mobile applications and devices ranked number nine for ANZ CIOs but did not make the global list.

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Tags CIO roleGartnereconomic crisisanalyst

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