Wednesday, October 21, 2009

Gartner highlights importance of business cases to address budget woes at its annual IT Symposium in Orlando

According to Gartner’s latest research, the IT industry is exiting its worst year ever in 2009, as worldwide IT spending is on pace to decline 5.2 percent. According to Garner’s Peter Sondergaard, Senior Vice President at Gartner and Global Head of Research, “While the IT industry will return to growth in 2010, the market will not recover to 2008 revenue levels before 2012.” According to Peter, “2010 is about balancing the focus on cost, risk, and growth. For more than 50 percent of CIOs the IT budget will be 0 percent or less in growth terms. It will only slowly improve in 2011.”

Budgets will be hard to manage as business conditions change from optimisim to pessimism in light of uncertain conditions. Barbara Gomolski, managing vice president at Gartner highlights this, as “IT leaders need a new type of budget, a rolling forecast that supports the return to growth. IT organizations need a budget that gives them the flexibility to respond to the changes that they know are going to come, and those that they cannot yet identify.”

From a budget perspective, Gartner highlighted three important items that IT leaders must consider in 2010, and one of the top recommendations was for IT executives to focus on quantifying the return on investment from IT. The advice from Gartner, “IT Must Learn to Build Compelling Business Cases — 2010 marks the year in which IT needs to demonstrate true line of sight to business objectives for every investment decision. IT leaders can no longer look at IT as a percentage of revenue. CIOs must benchmark IT according to business impact.”

Although frugal executives need quantifiable ROI proof prior to project approval, with less resources than ever, they don’t have the time or research needed to create ROI analysis reports. IT executives remain in need of vendor assistance to create compelling and credible business cases, with our surveys indicating that over 65% expect vendors to quantify the value of any / all proposed investments. Now more than ever, IT solution providers have an opportunity to help IT executives make the business case for proposed projects by collaborating with them on business case development.

Read the Gartner press release and advice here:

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