Opinion: 2009 and the CIO strategy switchby
This year has been a testing time for the CIO as the need for innovation battles against increasingly miserly budgets. Dr Giles Nelson predicts big changes for 2009.
By Dr Giles Nelson, Progress Software
Sadly, 2009 could be even harder than 2008 for the CIO as further financial troubles loom. But as the value of IT projects come under the spotlight, it’s important they take a more strategic role in the wider business strategy.
Next year will be a time of change for the IT industry as a whole. Companies will look up to their CIOs to drive efficiency, creating leaner, meaner companies that are set up to survive and thrive during the downturn. They will rely on business-led projects that bring a fast return on investment, rather than innovation for innovation’s sake.
Dr Giles Nelson, Progress Software
It is essential therefore that CIOs, with their knowledge of budgets and technology, should have a place on the board. In 2009, it will be up to them to squeeze every last bit of profitability from their organisations. In difficult economic climates, it is even more important that CIOs make the case for continued investment in IT to achieve greater operational efficiencies, reduce costs and aid innovation.
It is often too simple just to accept budget reductions without assertively articulating the benefits of continued investment. But companies that invest intelligently will come out the strongest when the recession ends. So CIOs need to identify key areas to ensure they maximise opportunity and profitability in everything they do.
So where can technology reduce costs? What existing parts of processes can be automated through technology? What can be made even more efficient? How prepared is the company for a possible merger? And how can the CIO become ever more aligned with the business?
A difficult legacy
In an economic downturn it is absolutely vital that IT and business departments work closely together. With innovation and agility the keys to survival, the CEO and CIO must have an ongoing dialogue, otherwise organisations could be making critical decisions without the business systems and processes able – and prepared – to react.
IT and business have become an increasingly important pairing and their relationship has been widely addressed by industry experts over the past year. However, a partnership between these areas will only work if the communication channels between both sectors can be successfully bridged, with both striving for the same common business goal, especially as CIOs join in the budget battle.
In the UK, CIOs are underrepresented on the board - only 48% of CIOs we surveyed sit on the board, while only 13% actually sign-off new business strategies. As a result, IT risks being treated as an afterthought, rather than a strategic asset. In an information-driven economy, this could be a serious mistake because in 2009, every organisation should have a CIO on the board.
Five predictions for 2009
From our own research, Progress Software predicts five main CIO trends for the coming year:
- A shift of balance in open architectures
Software-as-a-service (SaaS), cloud computing and open source will be adopted more widely, driven by a need for IT to concentrate real differentiated business value and the need to reduce costs.
- Big move to processing ‘events’ in business systems
Organisations will continue to move towards being event-driven, making them more agile. As a result, the success of IT implementations will be measured by how systems react and respond to the business events that are continually occurring within their businesses.
- More M&A, streamlining and collaboration
Multiple systems from merging organisations – or shrinking teams taking on new tasks – will prioritise agile and collaboration technologies.
- Innovation will diversify
Previous early adopters, such as financial services companies, will look to protect their investments by focusing on ensuring a return on investment. Innovation will begin to flourish in non-traditional areas.
- The three distinct CIOs...
Ultimately, a tougher economic climate will result in distinct CIO personalities:
- • Aggressive budget seekers and innovators.
• Defenders of existing budget through non-core activities.
• Budget cutters who focus on economy.
In the end, CIOs who are prepared will weather the likely more violent economic storm in 2009.
Dr Giles Nelson is CTO of Progress Software, EMEA.