Indian CIOs Identify Cloud Computing As Top Tech Priority For 2011

CIOs must re-imagine IT to support growth and competitive advantage, based on results from the 2011 CIO Agenda survey by Gartner Executive Programs (EXP). CIOs report that their organisations are emphasising growth, in addition to continued vigilance on cost and operational efficiencies.

The worldwide CIO survey was conducted by Gartner EXP from September to December 2010 and represents CIO budget plans reported at that time. The survey includes responses from 2,014 CIOs representing over $160 billion in corporate and public-sector IT spending across 50 countries and 38 industries. The Gartner Executive Programs report “Reimagining IT: The 2011 CIO Agenda” represents the most-comprehensive examination of business priorities and CIO strategies.

CIOs’ IT budget projections for 2011 in India indicate a weighted average budget increase of 3.5 percent. CIOs do not report IT budgets returning to their 2008 (pre-recession) levels. However, among the 36 top CIO’s in India, representing $1.2 billion USD in CIO IT budgets, 53 percent have plans to increase spending, 42 percent are holding spending levels similar to last year and 5 percent are decreasing IT budgets in 2011.

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“CIOs and IT have been boxed in between modest budget growth and growing legacy requirements,” said Mark McDonald, Group Vice President and Head of Research, Gartner Executive Programs. “New lighter-weight technologies – such as cloud computing, software as a service (SaaS), and social networks -and IT models enable the CIO to redefine IT, giving it a greater focus on growth and strategic impact. These are two things that are missing from many organisations.”

“The resource realities indicated in the 2011 CIO Agenda Survey raise the urgency and importance of adopting new infrastructure and operations technologies, such as cloud services and mobile technologies,” McDonald said. “These technologies were selected by CIOs the most often and are the top-two technologies for 2011 and are well-suited for this budget reality, as they offer similar service levels at lower budget costs.”

In India, CIOs expect to adopt new cloud services much faster than originally expected. Currently, no one reports having the majority of IT running in the cloud or on SaaS technologies, but over the next four years CIOs in India expect this number to increase to 67 percent or two out of three CIOs responding to the survey.

In a further positive development revealed in the survey, CIOs may be able to reallocate IT budget savings, rather than simply returning them to the organisation in 2011. CIOs anticipate the ability to fund infrastructure changes and new projects by reallocating resources within that budget. This approach to funding will become a standard operating procedure since Gartner does not see CIO IT budgets recovering to their 2008 peak until 2014.

CIOs report that their organisations are emphasising growth, in addition to continued vigilance on cost and operational efficiencies. This emphasis is consistent with emerging signs of economic recovery and increasing competition to attract and retain customers.

A ranking of business strategies reported by CIOs in India indicates that growth is a core expectation for 2011 and beyond. The move to growth appears to be more of a change in emphasis than a restructuring of business strategies and business expectations for IT, as prior top concerns for reducing enterprise costs and improving business processes remain important.

Until recently, the average IT organisation dedicated the majority of their budget to day-to-day operations. CIOs see the introduction of Internet service-based technologies as changing that equation and releasing resources for innovation and growth. This is creating a new CIO success cycle, one based on creating and realising new sources of value, in addition to cost-effective IT operations.

“Over the next five years, CIOs expect dramatic changes in IT as they adopt new technologies and raise their contribution to competitive advantage,” McDonald said. “Leaders will implement new infrastructure technologies to achieve increased efficiency and to redirect IT resources to create greater business impact. Pursuit of that leadership agenda will raise complex issues ranging from re-imaging IT’s role in their organisation to the creative destruction necessary to break old practices and redeploy resources to new initiatives.”

The 2011 CIO Agenda survey included results from more than 100 companies in China. There is some indication that Chinese companies will “leapfrog” some technologies (for example, by moving more-directly to mobility- and services-type models). Gartner believes that this means technology companies seeking success in China will grow based on the reach of their channel, rather than expanding with existing customers.