Budget Constraints Call For More Collaboration

Technology budgets might be flat, but demands for business agility and faster innovation persist. That's the dilemma for IT executives: How do they manage company expectations while faced with budget restrictions?

According to Gartner's Executive Programs 2003 CIO Agenda study, 2003 marks the third year in which cost constraints are governing decision making. It's been two years since CIOs have seen double-digit percentage growth in IT spending. IT budgets remain flat, although the study's 620 CIOs report that business operating budgets show a slight increase this year compared with last. This suggests little money for new initiatives at many companies as costs to manage and maintain technology investments will burn through most allocated IT dollars.

CIOs have to think like CEOs, Gartner VP Ellen Kitzis says. The issues confronting executive officers -- managing concurrent business demands for lower costs, better risk management, and faster innovation -- are the same concerns facing technology executives.

CIOs are meeting this challenge by taking a stronger leadership role and working more closely with their executive colleagues. In fact, the study indicates that providing guidance is a top priority for senior-level IT executives, while demonstrating the business value of IT also continues to demand their attention. Over the past two years, guidance and demonstration of business value have been increasing in importance, and Gartner predicts both will continue to be key management priorities for CIOs into 2006.

Effective CIOs must invest time and energy in ensuring that top-level decisions involve business colleagues at all levels. Only through collaboration of this kind can the needs of business and IT be uniformly achieved.

Realizing this objective will test the mettle of technology executives, yet those able to master the strategy will most likely be around to participate in the economic recovery when it finally arrives.

How do you expect budget constraints to affect your job responsibility in 2003? Let us know at the address below.

Helen D'Antoni
Senior Editor, Research
[email protected]

CIO Focus
What are your top management priorities in 2003?

One can only hope the persistent threat of job losses and unending cost-cutting is over. But IT divisions might not be safe just yet. According to the CIOs in Gartner's Executive Progress 2003 CIO Agenda study, reducing total IT costs continues to be a key priority. In fact, it's reported to be a higher priority in 2003 than it has been in the last two years.