62 Per Cent of CEOs See IT Having a Key Role in Post-Recession Strategy : Gartner Survey

Sixty-two per cent of CEOs recognise that IT-enabled
changes will be a key element in their post-recession strategy, while
only 13 per cent disagree, according to a recent survey by Gartner,
Inc. Preliminary results from the survey show 42 per cent of business
leaders are already focusing more on revenue growth than cost control.

In the third quarter of 2009, Gartner conducted a
targeted web-based survey of 190 senior business executives, 81 of whom
were CEOs, which probed their views and priorities for 2010 and beyond.
It examined companies in the US and UK with annual revenues of more
than $1 billion and specifically excluded technology service providers
and government.

"These preliminary results will help CIOs and
their teams with the planning and budgeting work they are doing in the
next few months,” said Mark Raskino, research
vice president and Gartner fellow. “Business leaders are gasping for
growth after a long period holding their breath, and they are expecting
to increase the importance of IT in their post-recession approach. It
is critical that CIOs review business leaders’ rapidly changing
tactical business priorities and often unstated new expectations of
where IT can help as the economy turns. CIOs are in a good position to
have that conversion right now. They should also take advantage of
business leader’s relatively positive attitude towards IT investment
during budget negotiations.”

In 2009, CEOs initially placed cost cutting at
the top of their priorities to cope with the sudden and severe
recession. In 2010, the focus for 71 per cent of business leaders is a
return to revenue growth.

Twenty-nine per cent of business leaders expect
to see a return to revenue growth as their primary focus in 2010. Only
10 per cent do not expect revenue growth to be their primary driver
until beyond 2011. “A switch in focus from
cost to revenue will reshape business-change priorities and in turn
will impact the IT project portfolio. CIOs should expect
re-prioritisation of some key IT projects during 2010 as the business
cycle starts to turn,” Mr Raskino added.

Similarly, business leaders’ investment attitude
towards IT is reasonably positive. In addition to the 43 per cent of
respondents who will increase IT investment level, 45 per cent will
keep the same IT investment level, while only 13 per cent of business
leaders will decrease IT investment level. “These findings reinforce
Gartner’s IT spending forecast of 3.3 per cent growth in 2010,” said Mr
Raskino. “With this warm attitude to IT, CIOs should stand their ground
if peers attempt to gain investment share at IT’s expense.”

CEOs and business executives are also changing
the order of their priorities in 2010. In particular, they are making
customer focus the top priority for 2010, with 85 per cent of
respondents reporting that retaining and enhancing their existing
customer bases will be their top priority next year. Also, attracting
and retaining skilled talent rose to the No. 3 priority, while reducing
costs has become less important, falling from the No. 1 priority in
2009 to the No. 5 priority for 2010. This
latter trend is also reflected in their views on the capabilities that
IT can bring to the business. They recognise IT’s contribution to
business performance beyond managing costs and that it has a role to
play in processes, flexible working, decision making and legal support.

“With business leaders
progressively shifting their time and attention away from the
introspection of restructuring and tactical cost cutting, and back
towards customer value propositions and servicing during 2010, IT
leaders should propose new ways in which technology can be used to
support existing and new customers. They should also discuss
talent-management issues and consider special provisions for key
talent,” said Mr Raskino.

Although business leaders will start to drive
through an economic recovery next year, very few anticipate a return to
the way things worked in 2007 and certainly do not expect the pace of
business to be as rapid. The survey found that CEOs and business
executives expect only low business-activity growth in 2010. When asked
about their expected changes in core production or service activity
volumes in 2010, 20 per cent of respondents expect no change, 49 per
cent expect an increase, but 31 per cent expect a decrease. Of those
who do expect volume growth, 50 per cent predict it will be less than 5
per cent and more than three quarters foresee it will be below 10 per
cent.

“This further suggests very few business leaders
are anticipating any sort of V-shaped recovery, and business volumes
will not recover quickly,” said Mr Raskino. “With the expectation of a
modest rise in business activity, CIOs should control infrastructure
investments accordingly.”

Although business leaders have a positive outlook
for 2010, CIOs should anticipate a mid-year re-prioritisation of some
key IT projects during 2010. They should explore post-recession ideas
for new technology-enabled ideas that produce strategic business value.
“Now is the time for CIOs and their teams to help power economic
recovery and make a major contribution to the future prosperity of
their businesses,” said Mr Raskino.

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