Despite an economy which is clawing itself back from the recession, most companies remain risk averse. Management will be looking to grow sales with flat budgets and no skills increase. The only way to achieve this is by transforming the business through innovation.
As part of its ongoing executive leadership and innovation predictions, Gartner has warned CIOs that annual IT budgets will sustain a worldwide average growth rate of 0% until 2012.
It has also warned that half of today’s IT managers will not be in place in 2012 and that through 2011, CIOs will be forced to meet expanding business goals with no meaningful increase in employment rank.
However, Gartner believes the biggest risk for IT management in these circumstances is inaction.
“Organisations cannot avoid business risk by simply standing still and doing nothing in turbulent times. Most organisations will experience as much risk through inaction as through action. The true test of IT strategic value is in its ability to transform the business. Transformation occurs through innovation, the creation of new business models, products and services or through fundamental changes in cost structure, customer engagement or partner relationships,” explains Debra Logan, Gartner VP distinguished analyst.
“Innovation does not mean having to increase budgets. By creating frameworks within an organisation to nurture workable ideas, companies can leverage the existing skills and budget to transform their company. Innovation can be applied for growth or cost cutting. Innovation is not simply aimed at new products and services; innovation is also about radical cost cutting. Either can be transformational,” says Logan.
Gartner’s recent CIO survey showed that business expectations are shifting from a focus on greater cost-based efficiencies, to achieving better results based on enterprise and IT productivity. These productivity gains will come from collaborative and innovative solutions that take advantage of the new ‘lighter-weight’ services-based and social media technologies, including virtualisation, cloud computing and Web 2.0 social computing.
“We have felt the palpable concern from the CIOs and executive management out there. The demands on IT management in this kind of business environment are tough, and they aren’t going to get any easier. It is imperative that CIOs equip themselves with an arsenal of information, ideas and practical guidelines if they hope to navigate the uncharted waters of the next twelve months,” Logan concludes.