October 19th, 2009
Stinks to be the CIO: The 2010 IT budget may spike to 2006 resource levels
Welcome to 2010 with the same resources you had back in 2006 and 2007 (if you’re lucky). Now go out and be useful to the business.
That cheery outlook was delivered by Gartner in its 2010 CIO Agenda talk. Some pep talk, guys. Gartner analyst Mark McDonald opened the talk with some entertaining riffs, but the overall message was clear: Budgets aren’t coming back quickly and CIOs need to evolve or they are screwed.
McDonald took an applause poll of CIOs who are seeing a budget increase of 15 percent, which would only get you back to par from a few years ago, and about three people clapped (in a room with probably 400 IT execs). These three people are likely to be attacked by vendors later today.
The reality: In 2009, 88 percent of enterprises cut their IT budgets. The good news: Even with strong increases in 2010, CIOs will face the future with essentially the same resource levels they had in 2006 or 2007.
Put it into a graph, the IT budget picture goes like this (Gartner updated these figures to a decline of 6.9 percent in 2010 on Monday):
But we knew the budgets stunk. What’s different for the 2010 CIO is that she is being pulled in two directions—cut costs and drive revenue. McDonald argued that IT isn’t just about cutting costs—if it were CIOs would be cheered right now. “If you save money and it does not drive more investment in IT you know there isn’t infinite demand,” said McDonald. “We fight commoditization.”
McDonald also noted that the business has more choices for technology than ever. In other words, the internal IT department may not be the best choice anymore for business.
However, it’s not terribly clear what’s going to change. Haven’t CIOs been evolving forever? Haven’t we been talking about business alignment for the last two decades? CIOs still have largely the same priorities they’ve had for the last three years: Improving business processes, cutting costs, improving efficiency and retaining and attracting customers and innovating.
Gartner’s Ken McGee and Dale Kutnick call the new normal the era of zero percent IT growth. Simply put, 2010 priorities look a lot like the previous three years—without the budget. And oh yeah I almost forgot: 2010 will make or break CIO careers. No pressure there.
Larry Dignan is Editor in Chief of ZDNet and Editorial Director of ZDNet sister site TechRepublic. See his full profile and disclosure of his industry affiliations.
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