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Survey: Retention hot, BI not

IT priorities have shifted in the last year, according to preliminary results of the annual SIM survey. While BI fell off the list as a priority, retaining staff remained a critical concern.

BOSTON -- Polling some 90 IT executives from its roster of members, the Society for Information Management (SIM) announced some surprising preliminary results to a crowd of 600 at its annual SIMposium event this week. The most surprising was the absence of business intelligence (BI) -- which ranked second in 2004 -- from the list of the Top 6 Application and Technology Developments of 2005.

"It's surprising because if you talk to people, it appears to be something that most organizations are still focusing on. Unfortunately, surveys don't explain their results," said Jerry Luftman, a professor at the Stevens Institute of Technology, who conducted the survey for SIM.

Top application and technology developments

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CIOs at SIM: Why IT matters

In addition to BI, business process management, Web services and customer portals dropped off the list. "I think that's a good thing [that those topics aren't priorities]. We know how to do them. They're there; we've done them, but let's move on," Luftman said.

So what are CIOs focusing on today? Security technologies remained the No. 1 priority for CIOs, as they had for the last few years. New to the list in 2005 was enterprise resource planning (ERP), coming in second, and service-oriented architecture (SOA), rounding out the top three. Other newcomers to the CIO's list of priorities included mobile and wireless applications and system integration.

Offshore outsourcing trends

Another surprising result was the percentage of IT budgets allocated for offshore outsourcing in 2005 versus 2004. In 2004, 73% of the more than 300 respondents said they wouldn't be allocating any money for offshore outsourcing. That number fell to 63.9% in 2005. In addition, 3.14% of IT budgets were allocated for offshore outsourcing in 2005, but 4.22% was projected for 2006.

"People are starting to engage a little more in offshore outsourcing. They're starting to try it with some small projects, which I think is the right thing to do," Luftman said. "I think we should be experimenting to see where it might or might not fit. It's clearly an indication that offshore outsourcing is on the rise."

Top IT management concerns

As for the 2005 Top 10 IT Management Concerns, it's no surprise that business/IT alignment remained the No. 1 issue.

2005's top IT management

  1. IT and business alignment
  2. Security and privacy
  3. Attracting, developing and retaining IT professionals
  4. IT strategic planning
  5. Introducing rapid business solutions
  6. Business process reengineering
  7. True return on IT investment
  8. Measuring the value of IT investment
  9. Speed and agility
  10. IT governance
  11. Complexity reduction
"That's just pervasive," Luftman said. "Everyone is looking for a silver bullet -- the one magic answer -- and there is no one magic answer. There's a bunch of things you have to do."

Following IT/business alignment, CIOs listed attracting and retaining skilled IT professionals as one of their top three concerns. The survey found that 40.14% of 2005 IT budgets were spent on employees. That percentage is expected to grow to 41.13% in 2006. In addition, 84% of respondents expect to hire experienced staff over new graduates in 2006.

"We're churning. I'm hiring someone from your company, you're hiring someone from his company and so on," Luftman said.

With 78.5% of this year's respondents admitting their staff headcount grew or stayed the same and 83.3% forecasting similar growth in 2006, retaining good employees is a dilemma for a lot of CIOs.

University of Miami CIO M. Lewis Temares said the biggest mistake both CIOs and their business counterparts make when it comes to retaining top talent is that they're not paying attention to their people.

"There's a lot of tension and stress with employees. They don't know where senior management is going. They're pushing outsourcing, they're pushing costs, they're pushing total cost of ownership. If employees are not informed, they're more nervous even if it's bad news. Tell them the news. You have to communicate," Temares said.

More interesting findings to note:

  • 17.5% of respondents have been in their current role for three years, 12.6% for five years and 9% for 11 years or more.
  • 42.2% of respondents report to the CEO of the company, while 22.9% report to the CFO and 19.3% report to the COO.
  • Enablers to alignment include senior executive support for IT and close partnerships between IT and business.
  • Inhibitors to alignment include business communication with IT and influence of headquarters' leadership.
Note: These findings are not final, only preliminary. SIM is still receiving surveys and the full findings will be presented in the spring of 2006.

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