Innovation ousts CRM in information budgets

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By: Wise Marketer Staff |

Posted on March 26, 2003

Chief information officers (CIOs) are feeling the pressure to accelerate innovation under increasingly tighter budget constraints, according to a recent survey conducted by Gartner Executive Programmes (EXP). Perhaps surprisingly, CRM has now become a lower priority than other 'must do' information technology projects, such as data security and privacy.

Between September and December 2002, some 620 leading CIOs participated in the Gartner survey, revealing that, for the third consecutive year, cost pressures are the primary business driver for CIOs. According to Gartner, the combination of security and risk management concerns, along with faster innovation, presents them with a vexing task.

"Being more cost-effective, reducing business risk, and innovating faster are extremely difficult to achieve all at the same time," explained Ellen Kitzis, group vice president for Gartner EXP. "Together, they risk breaking the budget. For CIOs it means adding redundancy to address business risks, which inevitably increases costs."

The survey showed that 'must-do' initiatives (such as business continuity, data security, privacy and keeping pace with the business) have recently taken precedence over the 'want-to-do' initiatives (such as satisfying shareholders, implementing customer relationship management systems, knowledge management, and e-enablement).

These new pressures are changing the role of the CIO, according to Gartner. Intense cost pressures and increasing business demands will suit those who are able to build bridges to the rest of the business, show leadership, and demonstrate the business value of what they choose to do.

The survey suggests that most CIOs know that they have to work with their C-level colleagues to keep them informed, so that the executives understand the trade-off choices and take joint responsibility for the decisions made.

"IT governance is about ensuring the right people are making the right decisions for the business, and being held accountable," Kitzis added. "CIOs have to be multilingual and act as the pivot point, achieving business goals through informed decision making, implementation and accountability."

In comparing business and information technology (IT) budgets, survey respondents said that business operating budgets are currently growing faster than IT budgets.

Gartner analysts say that there are two ways to look at the trend: One way is that there is business scepticism around how effective IT investments have been so far. The other view is that many enterprises have genuinely been able to reduce costs without reducing their business impact.

From a management perspective, CIOs now say that providing guidance for the board and executives is their primary management priority for 2003. In contrast, during 2002, that goal was ranked as the sixth most important management priority.

The CIOs also see their top technology priorities as being: securing systems from internal and external threats, better integration of applications, and providing greater availability of data to stakeholders.

Secondary priorities
Applications integration, middleware, and messaging have climbed steadily to second place in terms of technology priority, being cost-effective means to leverage legacy systems for greater agility and to support business innovation. Enterprise portal deployment is also seen as being a cost-effective approach to making data more available to employees, business partners and customers.

The Gartner 2003 CIO Agenda report is available directly from Gartner, and represents a range of industry sectors, including government, financial services, manufacturing, utilities, communications, retail, healthcare, education, and transportation.

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