Wise CIOs are preparing for economic uncertainty, says Ben Booth
The foremost area of concern for IT directors in 2005 must be uncertainty in the business environment. In the UK we have seen economic recovery, with an attendant increase in IT spend. Economic forecasters are predicting a decline towards the end of 2005, so we must be prepared to tighten our belts if this happens.
Fortunately, as we have not seen the rapid increase observed in previous "boom and bust" cycles, perhaps we can expect a soft landing. But as we prepare our budgets for 2005, we must have some contingency in case we need to economise or there is reduced demand in Q4.
A further area of uncertainty is the general election, likely to be called in May. Although many government contracts will continue unaffected, there will probably be a reluctance to com- mission new work in the run-up to the election. It seems unlikely that there will be a change of government, but there will probably be a reshuffle of ministers, and this could delay spending. So those of us with an income stream from central government will be preparing for interruptions.
Nevertheless, we know from government IT head Ian Watmore's recent speech to the BCS Elite group that government priorities will continue to focus on improving services to the citizen while maintaining the balance between security and usability.
The security balancing act
Security remains a perennial concern for all IT installations - spend too little time and effort and risk system corruption and failure, spend too much and run the risk of being labelled a "technology-obsessed nerd".
With the Freedom of Information Act coming into force this month, government bodies will be preparing for access requests. At first sight this looks like an issue only for the public sector, but other implications are beginning to become apparent. For instance, if you bid for a government contract, do your tender documents, perhaps containing trade secrets, become public documents, and can this be prevented?
The burden of regulation continues to grow, with many of the "regulated" industries reporting that up to 50% of their IT spend is now going on regulation-related projects, and there seems to be no reduction in this. One wonders whether this spending is at the expense of other IT initiatives, or whether it is "new money" raised through increasing the cost of services or reduced margins.
Whatever the source of the spending, it means greater responsibility for IT leaders, who must get more involved in businesses' regulatory mechanisms. Clearly scandals such as Enron must be prevented, but I wonder whether this is really money well spent, or whether a different approach to fraud prevention could yield the same result without so much non-productive expenditure. Is this a case of attempting to find a technological remedy for a human behavioural problem?
Supply of telecoms seems set to remain complex in 2005, with increased demands on the CIO to retain connectivity between business units and provide for a wide range of remote workers. Although large businesses are able to procure reliable and economic connectivity, smaller firms still have to contend with poor service - the challenge to carriers must be to combine reliability with effective account management, configuration and maintenance.
A further challenge in the telecoms area is the volume of spam - junk e-mail accounts for 90% of mail received in many businesses, and all estimates point to over 50% of internet capacity being used by these unauthorised messages. I believe 2005 will see those that have not invested in a service such as Messagelabs doing so, but isn't it about time governments woke up to the billions of pounds of internet capacity absorbed by spam, and the millions being spent to keep the spam out?
IT leaders have the potential to grow in confidence in 2005. As we gain more knowledge about our businesses and the environments in which we operate, we can contribute to broader business direction. With this may come a new challenge - no longer will it be seen as surprising if the CIO contributes to overall business strategy, indeed, there could be an expectation that this will be so. And if there is this expectation, we must ensure that we deliver at the strategic as well as operational level.
Ben Booth is chairman of the BCS Elite group and IT director at research group Mori