Surviving the next five years as a CIO will require great acts of courage and the ability to radically reinvent the role of IT, according to Gartner’s senior vice president, Dale Kutnick.
Delivering the new CIO Manifesto at Gartner’s annual symposium on the Gold Coast today, Kutnick warned CIOs that they need to innovate to remain relevant.
This includes moving IT away from being an expense to being an investment.
“Typically IT is thrown into general administration costs, it is a general admin function on the profit and loss statement,” Kutnick said. “IT isn’t going to innovate when it is part of finance and accounting and is simply an internal support organisation.”
Kutnick said it isn’t about an immediate ROI but looking beyond the borders of the company and finding the money and the will to think long term.
“Nobody is a hero babysitting SAP or Oracle and you’re only going to be a goat if you mess it up,” he said.
“Packaged software to support business is expensive and an estimated 70 per cent of IT budgets are still spent on apps that do not create differentiation.
“It is time to take greater risks and allocate more of the budget to drive business growth and innovation.”
Kutnick said one solution is to split the role of CIO. It is the role of the CTO to keep the lights on and the role of the CIO to innovate and drive the business forward.
He suggested changing the CIO title to Chief Investment Officer, Chief Digital Officer or Chief Innovation Officer.
“We are moving IT away from being an expense to an investment, off the balance sheet to a different state of mind,” Kutnick added. “It’s time to rewrite IT’s mission to maintain relevance and check that IT projects in 2012 support the CEO’s priorities.
“Siebel CRM isn’t going to differentiate your organisation but the analytics you put on top of your CRM will make a difference.
“New enterprise architectures will be required to support more agile provisioning of IT services.”
Research shows that IT budgets will remain flat for the next three years but complexity and demand is escalating.
As part of the new CIO Manifesto, Kutnick said CIOs need to forge partnerships with CFOs and uncouple IT from past processes and beliefs.
He said institute an IT-enabled innovation charter and ensure that the IT vision is well publicised within the organisation.
The Innovation Charter shouldn’t be more than 20 pages and only IT projects with measurable and auditable financial results should be part of IT plans.
He advised CIOs to compare top executive priorities with the most heavily funded IT projects to ensure they are aligned.
Another important part of the process is to identify obstacles to the newly-created CIO Manifesto.
Kutnick said IT leaders should identify applications and projects that can go to the Cloud and embrace simplicity.
“It isn’t the current competitors that will get you but the new players; Google didn’t exist 15 years ago and Facebook is less than 10 years old,” he said. Gartner’s global head of research, Peter Sondergaard, warned delegates to be prepared for massive change in the next five years.
“Modernising systems isn’t enough, CIOs that cannot re-imagine the role of IT will struggle to survive,” he said.
Spending on IT by Australian enterprises is expected to reach $A61.9 billiion in 2012, up 1.9 per cent over 2011. Spending on external IT services will make up more than one third of this amount and total $22.4 billion.
“Our outlook is made with the assumption of continued global economic uncertain, and at best sluggish growth in the United States, Japan and western Europe,” Sondergaard said.
“The European financial crisis is extremely serious with some economists now predicting a shrinking Eurozone economy in 2013.
“In Australia, the outlook is for three per cent growth in 2012, but with a two speed economy in a two speed world.”