OPINION: Poor Cousins

OPINION: Poor Cousins

Some differences between private enterprise CIOs and government CIOs are not so great. But the chasm between Australian government CIOs and their international counterparts can be huge. What are the sorts of issues that government CIOs worry about, and what are the sorts of things they do?

One certainty is that government CIOs in the Asia-Pacific region are doing it tough no matter which group you compare them to, according to the 620 CIO respondents in Gartner’s annual CIO agenda. They are the only government group in the world struggling with negative increases in their IT budgets for the third year running.

Their government counterparts internationally are enjoying annual increases, albeit small (0.35 per cent) in their IT budgets. And even their local non-government colleagues report an average increase of 0.75 per cent, while their international non-government counterparts remain almost static (-0.03 per cent).

Somewhat surprisingly, in both government and private enterprises, both here and internationally, business budgets show marginal increases (up to 0.72 per cent).

Yet the survey, which included CIOs in North America, Europe, South America and Asia-Pacific, shows despite this dismal statistic, government and non-government management priorities are remarkably similar. Both here and overseas, the government and non-government sectors share two out of three top 10 management priorities.

Government CIOs everywhere rated “providing guidance for the executive board”, “improving IT governance” and “enhancing IT architectures” as their top three management priorities. Their non-government counterparts share their concern with executive leadership and governance, but improving IT architectures is number five internationally on the list of important things to do, and almost off the chart, at number nine, locally.

In Asia-Pacific non-government CIOs are more concerned with demonstrating the business value of IS and IT. To a cynic, this could partially explain why they are enjoying an increase in their IT budgets — although without early attention to IT architectures, which is the government CIO priority, their future innovation may be stifled.

It is a different story with the top-10 technology priorities, with all sectors (government, non-government, here and overseas) agreeing on just one out of their respective top-three priorities — security enhancement tools.

Most government CIOs here and overseas agree that enterprise portal development, a cost-effective approach to making data more easily available, should be a top-three priority. But non-government CIOs here rate that number seven on their list of important issues. Just like their non-government counterparts overseas, they believe that applications integration, middleware and messaging are more important. Perhaps they view this as a cost-effective means to leverage legacy systems or, at least, not constrain, business innovation.

The third technology priority varies depending who you are talking to. Local government CIOs believe internal e-enabling of the infrastructure is important, while international government CIOs rated Web design, development and content management tools highly. This may reflect their budget-based confidence to pursue innovative solutions.

Another confident prediction concerns future reporting scenarios. At the moment about half of all CIOs report to the CEO. And this looks set to become a strong trend (up to 70 per cent) during the next three years, except for CIOs working in the Australian government. By then, up to 20 per cent of them are expected to be reporting to another executive.

Some things never change. Around the world, the average tenure in government is still higher than in private industry, with more than half the government CIOs interviewed holding their present job for five years or more.

Less than 40 per cent of non-government CIOs can lay claim to such job longevity, and whether that is due to a lack of job satisfaction or just more advancement opportunities, no one is willing to say — at least not for purposes of publication in this column. More interesting is the discrepancy between the future plans of Australian non-government CIOs and that of everyone else. In Australia, more than half the non-government CIOs believe they will be working as a CIO in a different enterprise or division by next year. Only about a third of all the other CIOs think that. Another third think they will end up in a general business role and the rest are unsure.

The survey identified three distinct groups of enterprises: those that were fighting for survival, those that were simply maintaining their competitiveness and those that were breaking away.

“Fighting for survival” enterprises have already cancelled all new development, gone through multiple lay-offs and are still looking for ways to further reduce business and IT costs in order to survive. “Maintaining competitiveness” enterprises had flat operating budgets year-to-year. These enterprises are completing projects already started and enhancing their existing systems, but being cautious about major new business investments, which is impacting IT investments.

“Breaking away” enterprises were characterised by significant increases in business operating budget and higher-than-average IT budget. These enterprises are using the current economic situation as an opportunity to distance themselves from competitors by continuing to invest in business initiatives. They show signs of breaking away from the pack when the economy strengthens.

It seems clear that the enterprise position drives changes in each CIO’s focus. For example, CIOs in “fighting for survival” enterprises need to focus on the basics: minimise business and IT costs without introducing excessive risk. CIOs in “maintaining competitiveness” enterprises need to focus on implementing proven processes while positioning for growth. CIOs in “breaking away” enterprises need to focus on driving IT-enabled innovation without under-delivering on the day-to-day.

In reality, most IS organisations are in a state of transition. Some are significantly further along on one dimension, while they lag considerably on another. Some CIOs are fairly traditional and see themselves as driving just the IS team. Others are visionary and trying to use IT as a vehicle for helping the businesses create new business models, enter new markets or develop IT strategies that will leave competitors in the dust.

No one state is necessarily the best. It depends on your focus and the objectives of your enterprise, and a solid knowledge about your competitors and peers does not hurt either. If you have reached this point, we can safely assume that at least one out of three was relatively painless.

Andrew Rowsell-Jones is vice president and research director for Gartner’s CIO Executive Programs (EXP)

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