Posted by : bpburnwal on Jan 09, 2004 - 11:37 AM General

The challenge for chief information officers (CIOs) this year will be to drive IT innovation while maintaining cost and efficiency savings achieved in 2003.
Business realignment and competition will intensify, IT vendor consolidation and restructuring will continue, and the credibility of IT will remain fragile among many business executives.

CIOs must continue robust management of short-term issues, prepare responses to trend shifts that drive business complexity and uncertainty, and invest for the future. In short, they need to cut costs and innovate.

To help, Gartner has come up with 10 CIO resolutions (see below), consisting of proven practices as well as new disciplines.

Important actions, such as developing a policy for offshore sourcing, are already priorities, so are not included here.

Gartner's resolutions are grouped into three themes:

Maintain cost discipline, rationalise and consolidate further

CIOs have extended the lives of equipment to control costs, but ageing hardware and licensed software will hinder business agility, and servers or PCs bought in 1999 or earlier must be seriously considered for replacement.

While refreshing old hardware, it will be important to maintain the momentum of recent asset consolidation and rationalisation that will release funds from operating costs to add to IT budgets. It is also vital to maintain the culture of efficiency.

Vital technology skills will be in short supply as economic growth quickens. Now is the time to identify and act to retain IT staff with business-critical skills.

Assess imminent shifts in business and technology trends, prepare to respond

Most vendors advanced technologies during the recession but many IT leaders have had to ignore advances because of budget constraints, in some cases resulting in a knowledge gap. Gartner urges CIOs to ensure that they directly experience a range of new technologies and services.

Technologies for hands-on review include: Linux desktop with open-source personal productivity applications Blade servers Systems and devices for handling voice traffic over IP networks Instant messaging and similar tools Development tools for web services. Invest in mid-term opportunities, pull back from short-term expedients

Many CIOs have been approving only projects that deliver return on investment in six months. This can accelerate short-term progress but companies must return to more strategic investments, with a long-term goal of migrating to a 'real-time infrastructure'.

CIOs must plan now for migration of systems away from legacy platforms to take advantage of server virtualisation trends, and to get fully briefed on the realistic timeline for implementing truly self-healing, OS-neutral and smoothly scalable utility computing.

Business process fusion, focusing on business processes made possible by the emergence of software platforms and architectures, will help enable the real-time enterprise.

However, at least half of medium-sized to large firms lack specialist business process skills.

CIOs should re-tool their IT workforce by investing in technology-oriented business process skills development, and setting up business process competency groups.

Business strategies are increasingly concerned with partners and stakeholders outside the enterprise.

By 2005, more than 25 per cent of IT capital budgets, in at least 70 per cent of large and medium-sized businesses, will be directed to transforming the enterprise using external partners.

IT leaders must champion opportunities for business. They must create competencies and architecture capabilities aligned with them.

IT can still drive business growth. IT departments in 2004 should strain at the financial leash, make sure they don't underspend their budget, and lobby for resources to make bigger contributions to the business.

Gartner's top 10 resolutions for 2004

1. Refresh ageing software and hardware bought before 2000

2. Continue consolidating IT infrastructure and applications

3. Make clear technology choices and set policy for the future

4. Stay in direct touch with key technology developments

5. Anticipate external drivers of uncertainty and complexity

6. Plan for new competences and give your most valuable staff an unexpected pay rise

7. Migrate towards real-time infrastructure

8. Create a business process skills competency centre

9. Build partnership management competences and processes

10. Plan to overspend your budget

John Mahoney and Mark Raskino are Gartner research managing vice president and research director respectively.