In-Depth

Business Leaders Tell IT: You Must Deliver

As never before, IT is facing pressure to deliver products and services that help differentiate the business from its competitors.

• By Stephen Swoyer
• 02/05/2008

Enterprise CIOs see plenty of challenges ahead, and recession, or the likelihood of an economic downturn, is just one of them. Now more than ever before, CIOs say they're under pressure for IT to enable game-changing strategies for their enterprise.

According to a recent survey from market watcher Gartner Inc., 85 percent of CIOs anticipate having to deal with "significant" changes over the next three years. The bulk of those changes, Gartner reports, stem from growing pressure for IT to deliver products and services that help differentiate the business from its competitors.

"CIOs recognize the importance of IT in 'making the difference' by changing business processes, attracting customers, and developing new products and services," said Mark McDonald, group vice president and head of research for Gartner Executive Programs (EXP), in a statement.

CIOs aren't exactly sanguine about this situation, however. "[T]hey are guarded in their confidence in IT's ability to create results in these areas. Momentum has been building for IT to play a larger role," McDonald continues. "This year, those expectations are beginning to outpace CIO confidence to deliver. This sharpens CIOs' concentration on IT capabilities like never before."

Why are CIOs so determined that IT should make a difference -- perhaps even the difference -- to business success? They're hearing from business leaders.

"The message is consistent across the survey; business leaders expect IT to make the difference rather than deliver generic IT solutions," McDonald indicates. "IT difference is the reason customers use when they choose a company's products and services," he continues. "Making the difference involves taking on additional technical risk and cost, a departure from past CIO strategies that concentrated on managing these factors. CIOs will need to become more tolerant of risk and innovation and flexible to meet changing market and customer demands."

Gartner thinks CIOs are in a good position to pull it off. For one thing, the researcher points out, CIO tenure has stabilized at an average of four years and four months, which gives CIOs "ample" time to collaborate with business executives to transform their enterprises. In addition, today's CIOs have what Gartner calls "enhanced" business leadership positions: more than half of them report having responsibilities outside of traditional IT.

Nevertheless, CIOs will have to overcome a bevy of challenges -- starting first and foremost with people and process issues.

Only 27 percent of CIOs believe that they have the right number of skilled people to meet business needs, Gartner reports.

"Two-thirds of IT organizations that do not meet business expectations claim that skills are at the core of their performance issue," McDonald says. "This issue is not expected to be resolved quickly, because only half of CIOs reporting a skills issue have building IT skills as a top-five strategy for 2008."

CIOs should at least be adequately funded as they attempt to transform their organizations. According to Gartner, worldwide IT budgets should increase by an average of 3.3 percent in 2008 -- a slight increase from 2007.

Enterprises are willing to invest in IT when it delivers "distinctive" solutions, Gartner says: IT budgets at such "distinctive" companies are growing at a rate of 4.9 percent on average, compared with generic IT shops, where IT budgets are growing by an average of 3.1 percent.