To get a handle on how to balance the need for growth with managing expenses, CIOs at the recent Gartner Symposium/ITxpo 2008 in Orlando were asked to rate their companies on a scale of one to five on the following pairs of statements. A ranking of one represents strongest agreement with the first statement, while five represents strongest agreement with the second statement.
|We are inefficient in terms of IT costs.||We are efficient in terms of IT costs.|
|Our organization's 2009 targets call for (less than 10%) growth in revenue or operating budget.||Our organization's 2009 targets call for modest (less than 10%) growth in revenue or operating budget.|
|Little of our 2009 growth will come from new or enhanced products/services.||Most of our 2009 growth will come from new or enhanced products/services.|
|IT capabilities will have little impact on our growth in 2009.||IT capabilities are critical to us achieving our growth in 2009.|
|Our company has low tolerance for risk -- we do not take chances.||Our company has a high tolerance for risk -- we take chances.|
If you scored less than seven, Gartner Inc. advises that you continue to focus on improving the cost efficiency of IT in order to build credibility inside the company and to bring costs in line with peers.
If you scored between eight and 12, Gartner says you should continue to look for opportunities to improve IT costs, as well as drive down business operating costs. Balance this with a reasonable investment -- at least 30% of your IT budget -- in growth and business improvement.
If you scored between 13 and 18, you should increase your nondiscretionary investments by at least 10% in 2009, with half of that new investment going to transformational initiatives.
If you scored greater than 18, your company has aggressive growth plans and is relying on IT to play a key role in that outcome. Gartner advises you to focus on helping the business prioritize its initiatives and manage risk.
To help CIOs figure our where to make investments in 2009 and where to pull back, Gartner matched six business imperatives it hears about from CEOs with the requisite IT priorities. Select your company's top two priorities from the list.
|Attract and retain customers||If this is a top business imperative, IT priorities would include advanced data analysis, word spotting, emotion detection, offer analysis, blog analytics and Web community software from best-of-breed vendors.|
|Improve workforce effectiveness||IT priorities would include investments in areas like social software, collaboration and learning tools.|
|Build an agile and innovative organization||This means IT should be investing in a unifying business architecture that optimizes IT investments, leverages the organization's main sources of competitive advantage and supports changing organizational goals. Operational excellence enables agility.|
|Improve critical processes and workflows||IT should increase investment in business process management, including the people to support it, such as business process architects or analysts and a BPM "champion."|
|Manage governance, risk and compliance||Invest in using IT as a driver for standardizing and automating key operational and financial processes. Also consider investments in management technologies for auditing and reporting and/or controls automation and monitoring.|
|Maximize performance, profitability and competitiveness||Use IT to deliver new products and services that drive growth, while using technology to reduce cost structures and achieve scale.|
For the lowest two priorities, ask two more questions:
What IT capabilities do you currently have in this area that you can pull back on with little impact to the business?
What specific technologies do you have in this area that you could retire or scale back with little or no negative impact to the business?
-- Jump Start 2009: Financial Management and Prioritization, Barbara Gomolski, Gartner Inc.