Tech leaders to weather crisis

Companies that position themselves as technology leaders will more than likely survive and then capitalise once the global economic recession has receded, says Gartner executive partner Pete Janse van Vuuren.

IT has been widely expected to be one of the key areas that large corporations will eye to reduce their spending during the economic crisis. This is not because companies think IT is overspending, but rather that the companies have to align their expenditure to their income.

Furthermore, the international banking sector, which has been a major user and driver of IT adoption to improve its business processes, has been severely affected. General expectations are that it will not make the kind of investments in technology that it has in the recent past.

Because of the wobbly state of the global economy, and its effect on a sector that is closely aligned to international trends and events, Gartner has focused this year`s Symposium/ITxpo Africa conference, in August, to run with the theme: "Spending wisely and finding opportunity in uncertain times".

"Technology leader companies have given their CIOs and CTOs the kind of leeway they need to make difficult and bold decisions," notes Van Vuuren. "Some of those decisions may have been really difficult, but - by and large - they were right. Now those companies are well positioned to weather the economic crisis."

While CIO and CTO priorities have changed in order of importance, he adds, they are similar to what they have been for the past five years, except for "reducing the cost of IT", which has climbed back to number two from 10. Also, "attracting, developing and retaining IT staff" has dropped from three to eight.

Between September and December (at the height of the financial crisis) Gartner surveyed over 1 500 CIOs and CTOs of some of the world`s largest companies. On average, the companies in the sample have IT budgets of $90 million and an IT organisation of 400 personnel.

Forty percent of the sample was from North America, with an equal number from Europe, and the balance was from mainly Asia/Pacific nations. Van Vuuren says a smattering of South African and African companies were also included in the population sample.

The sample breakdown showed companies that are classified as technology leaders made up 10% of the total. This was followed by those labelled as challengers, meaning technology is high on their list of priorities, which made up 37% of the total. Close followers made up the bulk of the sample, with 45%, and late followers made up the remaining 8%.

A key finding was that global IT budgets for this year are projected to be marginally higher, with a growth rate of 0.16%. This average was determined by about 40% of the sample saying their budgets would increase slightly, while 33% indicated their budgets would remain constant and the rest believed they would see cutbacks.

Van Vuuren says CIOs have realised they have to make difficult decisions regarding IT resources, work smarter with the same amount of money, and really move to align the IT department with the business.

"They will have to focus on fewer projects, consolidate some services such as running fewer data warehousing sites and, most importantly, work faster and be more effective."

Van Vuuren says the days of literally endless IT projects are gone. Business executives now do not care if not all the features are in place, but they are insistent they want the service immediately in order to capitalise on a business case.

"During a recession, business cases move quickly and IT departments have to be responsive to that if they want to be closely aligned to the core business."

Innovation will remain important, explains Van Vuuren, as enterprises will continually look for ways in which to improve their business processes and offer products and services.

"But innovation will have to be carefully targeted."

Staff retention is also changing. Van Vuuren says one of the highest CIO priorities is to ensure staff are retained and kept happy due to the perceived scarcity of skills.

CIOs need the right people, with the right skills, the right motivation and the right attitude. "Now attitude of the staff is of very high importance as many CIOs say even if a member has the best skills around, but is difficult to work with, they don`t want them."

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