Editorial: February 2004

This month’s issue includes our annual survey of IT spending, and the results are mildly encouraging: The more than 600 CIOs we polled have increased their 2004 IT budgets an average of 2.2 percent over 2003, and more than two-thirds of CIOs expect to be given the authority to exceed their budgets if need be. Of those 2004 budgets, 52 percent will go to maintenance, 21 percent to continuing old projects and 27 percent to new projects. The upshot: (confirmed independently by columnist John Parkinson’s own research) CIOs are finally being given the okay to move ahead, if cautiously, with plans to use information technology strategically again. A significant portion of the new projects will be devoted to internal cost-cutting efforts such as server consolidation and systems rationalization. But the CIOs we polled also cite such potential revenue-producing efforts as customer service and business intelligence as goals for the coming year.

This is of course good news, given the two or three years of cutbacks most CIOs have suffered through. But it’s a far cry from the double-digit growth of the preceding decade or so. Will those fat years ever return? I believe it’s unlikely—and that’s a good thing for CIOs. By positioning themselves as the rational voice of IT, the voice of business reason, CIOs have much to gain and little to lose. This issue of CIO Insight covers a variety of business-driven trends that are conspiring to aid CIOs in this effort.

One such trend, the increase in corporate transparency, has already been signaled by the advent of the Sarbanes-Oxley Act, and every CIO whose company is subject to the act will have already gotten a taste of the future. This month’s case study on the efforts of propane distributor Blue Rhino Corp. to comply with the new rules suggests both the risks and the benefits of a more transparent future, and the value astute CIOs can bring to the task of compliance.

Business efficiency is also the watchword in our analysis of software pricing trends. The inexorable march to a pay-as-you-go model for all types of software, from the most mundane middleware to the fanciest user-friendly business applications, holds the promise of huge economies in the purchasing and use not just of software but eventually of technology assets of all kinds. In an era when saving money will make you as big a star as spending it will, every CIO needs to be on top of this issue.