CIOs are over-achieving despite recession

Businesses see their CIOs as extremely effective, despite the constraints of the downturn, according to the fourth annual global survey of IT strategy and spending by consultancy McKinsey.

Businesses see their CIOs as extremely effective, despite the constraints of the downturn, according to the fourth annual global survey of IT strategy and spending by consultancy McKinsey.

Some 55% of non-IT executives surveyed said CIOs' performance in providing basic IT services was very or extremely effective; this was up from 50% last year.

For higher-value activities, such as on-time/on-budget project delivery and proactive engagement from IT, around 30% of non-IT bosses thought IT was very or extremely effective, with roughly another third saying IT was somewhat effective.

"Significantly, these figures are largely unchanged from last year, despite all the economic turmoil," said McKinsey authors Roger Roberts and Johnson Sikes.

But only 21% of IT executives were happy with their ability to target areas in their organisations where IT could add value, compared with 30% of their non-IT colleagues who said IT was very or extremely or very effective at doing that.

Compared to last year, IT executives' satisfaction with their performance is down across the board, with several categories that showed double-digit declines, they said.

"It seems likely that this drop is driven by a continued sense of frustration among IT staff, who are being asked both to reduce their own costs and, at the same time, to help business units do more to improve their operations," they said.

The survey found that the closer IT was integrated to the overall business strategy, the more effective it was. While only 16% of respondents had tightly coupled business and IT strategies, two-thirds said this would be their ideal, the authors said.

Roberts and Sikes said the goals of IT were shifting from cost reduction to solving business problems. "Running a tight IT organisation remains important, but a smaller share of respondents indicate that their primary focus is to achieve the lowest IT cost. Executives are realising better results from applying IT to solving problems across the business," they said.

Over the next 12 to 18 months two-thirds of CIOs will focus on reducing both IT and business costs through efficiency improvements, including applications development, infrastructure consolidation, and contract renegotiation.

Green IT programmes, such as those that increase energy efficiency in datacentres, will continue to attract investment. "Cost savings and reputation enhancement are likely behind this strong push to protect green investments," they said.

More than 60% of respondents expected IT operating expenses to decline or hold steady. This reflected a permanent "resetting" operating costs for an uncertain future, the authors said.

But firms were prepared to invest in IT where there was a payback. Some 45% of CIOs expected to spend more, with 20% spending steadily on new projects aimed mainly at improving business operations in terms of lower costs and better effectiveness, they said.

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