As early indicators begin to show that the economy may have bottomed out, experts tell CIOs to be ready to come out of the recession on a strong foot. After months of dismal numbers and projections, there are signs that IT spending may be looking up, or at least will stop sliding very soon.
A recent poll of 933 IT workers attending Interop showed that more than 80 percent of organizations plan to spend more this year than they did in 2008. Only seven percent of respondents said they would spend less.
Though not quite as optimistic, recent figures released by Goldman Sachs show that even with 2009 spending still in the dumps, the firm’s “tech-capital spending index” increased for the first time since June 2008.
According to Bob Zukis, national IT strategy leader for PricewaterhouseCoopers, it is time for CIOs to think about how to come out of the recession strongly.
“The headline today is cost, which is no surprise,” Zukis says. “It’s interesting, though, because it’s starting to feel a bit like yesterday’s news in the IT world.”
According to Zukis, CIOs are less concerned about cutting IT costs and more focused on IT value derived from those costs. He believes that this attitudinal shift during the current recession lies in stark contrast with the thinking among tech and business leadership during the last downturn.
“If you look back to the last recession, IT was part of the problem; nobody looked to IT to solve what had occurred in the last recession,” Zukis says. “Now IT has an opportunity to be part of the solution.”
This go around, Zukis says most enterprises haven’t asked IT to make wholesale cost reductions, instead choosing to nip at the budget by only 5% to 10%.
“As non-technology executives have asked IT to share in the pain, I think that gap between the business and technology has really been bridged in terms of where the value is coming from across the IT environment.
CIOs can continue to bridge that gap by focusing on innovation, Zukis says.
“What IT executives are focused on right now is innovation and IT’s role in driving innovation across the enterprise,” he says. “It’s not going to be a question of ‘What have you done for me lately?’ It’s going to be ‘What are you going do for me tomorrow; how are you going to help me find that next revenue dollar?’"
However, simply strategizing and executing innovation plans may not be enough to demonstrate IT value. A recent report released by Forrester Research shows that CIOs also must learn to communicate the value they drive to the organization in order for line-of-business leaders to fully understand IT’s contributions. In short, CIOs need to market their efforts better.
“Some CIOs may address business value when they start conversations with business execs, but they devolve quickly into IT issues,” wrote report author Bobby Cameron. “Others wait for business to ask them to participate in business conversations instead of proactively putting business on the table.”
Cameron also believes that all too often, CIOs measure and communicate operational excellence rather than business value.
“Many IT shops insist on communicating only IT-oriented information like project status, system availability, and utilization rates,” the report says. “Only 49% of the IT leaders in a Forrester survey measured postproduction to see if projects delivered the value that the business case anticipated.”
