 "Tighter Budgets Should Prod CIOs To Innovate")
The global recession has impacted in ways beyond the usual. Change in the world power play and equation is the oft discussed side of the impact story. Among the many stories on the not so widely discussed ‘other’ side is the changing equation of the CIO within the organisation.
The CIO’s transition from a technology expert to a business strategist is already well established. What the recession has done is embed it further and manifest in a much more challenging manner, with the budget pressures forcing CIOs to think money and not just CIOs in India are undergoing a change to improvise on IT strategy. These CIOs are under pressure and need a concrete road map to reorganise their IT infrastructure and make it more elastic and flexible for the work force if these CIOs are looking on delivering growth.
“After recession, the CIOs globally have been challenged to contribute to business growth without adequate budget provisioning. After recession, the top management is still not ready to loosen their purse strings for the CIO’s office. There is constant pressure to keep the costs at bare minimum,” explains Dale Kutnick, Sr. VP and Global Head of Gartner Exec. Programs. According to Gartner, the last couple of years have only seen the IT budgets inch up by 1 – 1.5%.
Tightening The Purse Strings
According to Linda Price, Group VP, Exec. Programs, APAC, Gartner, even though the APAC region was marginally impacted by recession, the percentage increase in IT budgets when compared to USA and Europe is too low. According to Gartner, in 2011 the IT budget increase in APAC region would only be 2 – 2.5% compared to the countries in USA and Europe.
The story is not much different in India. CIOs’ IT budget projections for 2011 in India indicate a weighted average budget increase of 3.5%. Among the 36 top CIOs in India, representing $1.2 billion USD in CIO IT budgets, 53% have plans to increase spending, 42% are holding spending levels similar to last year and 5% are decreasing IT budgets in 2011.
This will lead enterprises in the region to work with leaner structures and still contribute to the company’s growth plans. In such a scenario innovation proves critical for the CIO to deliver and meet expectations. The thrust is on designing process improvements, coming up with innovative practices that will improve productivity without additional investments. “CIOs in India are undergoing a change to improvise on IT strategy. These CIOs are under pressure and need a concrete road map to re-organise their IT infrastructure and make it more elastic and flexible for the work force if these CIOs are looking on delivering growth,” explains Heminder Singh Ahluwalia , Executive Partner, Gartner Executive Programs.
Another area that needs CIOs’ attention is attracting and retaining talent. According to Price, this is one major challenge that APAC CIOs are facing. She shares an experience from one of her recent CIO sessions where the employee retention issue topped the CIO minds. Surprisingly, only one out of about a dozen CIOs in the meeting had a clear roadmap to handle the challenge. Clearly, an issue that needs immediate addressal.
Productivity On A Budget
‘Same Budget More Productivity’ is the mantra for the CIOs. Getting a tighter grip on the budget is leading CIOs to gravitate towards technologies that help shoot up productivity with limited investments. In this light, Gartner highlights mobility, virtualisation and cloud computing as technologies that fit the bill.
Mobile Architectures To Drive Innovation
According to Singh, the biggest trend that will impact the Indian region is enterprise mobility. The advent of smart devices like iPhone, iPad, etc. in the last couple of years has caught the fancy of the young generation, and incidentally they are a huge part of the current workforce. Thus, going forward, the enterprises will have to form new mobile architectures that will not only support their internal employees but also business partners. This architecture will have to be well integrated with the company’s networks, datacentres, etc. One major challenge in the process would be to provide secured access to the customers. Recent breach in security at Sony, Epsilon and Citibank should be taken note of and lessons should be learnt. The CIO’s office will have to deploy a layered security to prevent itself from any similar attacks.
Banking On Virtualisation
Virtualisation will continue to be the technology for considerable savings. While companies are already improving their usage of the hardware devices using different kinds of virtualisation, there is still scope to move that curve upwards and still push in for more effective usage of up to 70 – 80% of the final capacity.
Cloud Computing To the Rescue
Even though its mostly the less critical applications for now, companies are latching on to cloud computing to optimise their monetary investments. Some of the common applications moved onto the cloud include video hosting, marketing services, consumer facing applications, testing new applications and other less critical applications. It will take about two years for mission critical applications to be considered for cloud. The big corporations are still worried about the security issue on the model.
The key lies in handling the internal IT operations tactfully. As Singh advises, the CIO should be aware of the enterprise architecture and should be street smart while applying the right technology at the right time keeping in mind the business benefits from that technology.
With inputs from Sana Zabeen.