CIOs Will Be Spending Big in 2006

According to a worldwide survey by Gartner Executive Programmes (EXP), a unit of Gartner Inc., CIOs expect to feel increased pressure to perform in 2006, as executives now expect IT to play a significant role in business growth and competitiveness. This shift to a more external focus is expected to accelerate throughout the year.

The survey found that worldwide IT budgets are expected to increase by an average of 2.7 percent in 2006. This compares to an increase of 2.5 percent in 2005 and represents a modest budget increase for the third consecutive year. Growth is on the CIO agenda as IT budgets are increasing by an average of 4.8 percent at companies planning to grow faster than the market.

Gartner EXP surveyed 1,400 CIOs in more than 30 countries; who’s combined IT spending will exceed $90 billion this year. “The survey results make it very clear that business expectations of IT have changed dramatically and executives are expecting their CIOs to move beyond concerns about cost, security and quality to help grow the business,” said Marcus Blosch, vice president and research director at Gartner EXP. “Last year saw the beginning of a transformation that is intensifying in 2006.”

The survey also found that business process improvement – making a company easier to do business with – is the top business priority for CIOs.

However, while CIOs are playing an increasingly business-focused role, the responsibility for running effective technology operations remains. Commenting on the fact that business concerns over security breaches and disruptions fell from the second to the seventh ranked priority, Blosch said: “This does not mean that security is no longer an issue. Rather, it indicates that in 2006 the business expects IT to be secure and is looking to the CIO to keep it that way.”

If you want to target your sales efforts more effectively, Gartner recommends that you target either (or both) of the follow top ten CIO concerns:

Top 10 Business Priorities

1. Business process improvement
2. Controlling enterprise operating costs
3. Attracting and growing customer relationships
4. Improving competitive advantage
5. Improving competitiveness
6. Using intelligence in products and services
7. Security breaches and disruptions
8. Revenue growth
9. Faster innovation
10. Faster cycle times

Top 10 Technology Priorities

1. Business intelligence applications
2. Security technologies
3. Mobile workforce enablement
4. Collaboration technologies
5. Customer sales and service
6. Service Oriented Architectures (SOA)
7. Workflow management
8. Networking, voice and data communications
9. Virtualization
10. Legacy application modernization

The above is based upon information provided by Gartner, the world’s largest high-tech analyst and market research firm. They can be reached at www.gartner.com.