Tuesday, February 05, 2013

Gartner: Out with the Old, In with the New


An alarming 43% of today’s enterprise IT investments are not delivering on their business potential, this according to Gartner’s Executive Programs latest research.

With 2,053 worldwide CIOs surveyed in the study, managing more than $230 billion in IT budgets, this means that almost $100 billion of IT enterprise spending is currently not generating the expected business value - a colossal squandering of key business savings, process improvements, growth and competitive opportunities.

Perhaps as a result of the poor ROI, the Gartner study indicates that enterprise IT budgets have been flat to negative ever since the dot-com bust of 2002. For this year, 2013 these IT budgets are continuing the downward trend, with an anticipated weighted global average decline of an additional 0.5%.

Failing to deliver on ROI promises is taking its toll on CIO credibility, and making it harder for IT to grab its fair share of future budgets.

So much so that Mark McDonald, group vice president and Gartner Fellow indicates that, “Without change, CIOs and IT consign themselves to tending a garden of legacy assets and responsibilities."

With mainstream emerging mobile, big data, social and cloud technologies coming on-line, there is a great opportunity for CIOs to:

  • Shift from a “keeping the lights on” legacy systems management and IT cost savings focus to business impact,
  • Track value realization to start maximizing the technology ROI on all investments.

But the window for action is shrinking. With waning CIO credibility, Gartner is predicting that the percentage of technology spending controlled by the business -- outside of the control of IT -- will reach 35 percent in 2014, and that by the end of this decade with cloud technology, BYOD and the consumerization of IT, Gartner is predicting that businesses may control a whopping 90 percent of enterprise technology spend.

The Bottom-Line: What is an IT Solution Provider to Do?
Our take? IT sales and marketing must realize that IT spending decisions are quickly changing from:
  • Being controlled by CIO and IT executives to instead, shared or the majority of decision making between IT and key businesses stakeholders,
  • A focus on IT consolidation, productivity improvements and cost savings to instead, how IT can deliver tangible business benefits,
  • Using ROI as a gateway to project approval, to instead using financial analysis to assure that proposed benefits are realized post deployment.

As a result of these changing buyer profiles, we recommend that IT sales and marketing revisit their strategic investments to:
  • Address a world where the business garners majority control of technology spending decisions,
  • Shift value messaging and quantification from being IT centric (like IT TCO savings), to being business benefit focused (like how IT can help improve Marketing Effectiveness),
  • Help CIOs prove the return on prior investments to once again garner a larger share of the budget. 

Sources:
Gartner Executive Program Survey of More Than 2,000 CIOs Shows Digital Technologies Are Top Priorities in 2013 - Survey Highlights the Need for CIOs to Set Aside Old Rules and Adopt New Tools, Jan 16, 2013 -

More technology spending in the hands of the business instead of IT

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