What’s on today’s CIO agenda?

Julian Hewett, Chief Analyst

One of the most interesting things I have done this year is to interview the CIOs of 15 large organisations (with the help of my colleagues). The main purpose of the research was to determine the key items on the CIO's agenda in 2003. The research is almost finished, and I am just starting the analysis of what we have been told. This will be available to customers in about six weeks.

Meanwhile, having just read the interview reports, here is what struck me most. Without doubt, the first item on most CIOs' agendas is cost reduction. And in many cases, we are talking about 'second generation' cost reductions. The 'first generation' was the obvious cuts and removal of excess. Second generation means working much smarter, not taking on many new projects, being ruthless with suppliers, and rationalisation.

I heard the phrase 'do more with less' several times. A much higher level of sponsorship of new projects is required from business units in today’s environment, particularly for infrastructure projects. The two largest budget holders I met – both with $1.5 billion IT budgets – are taking 10%+ out of their budgets.

The second item is normally rationalisation. We’re talking rationalisation right across the board – architecture, infrastructure, application portfolio, business processes, and suppliers. Decentralisation, coupled with the pressure to install new systems quickly at the end of the 90s, has resulted in an IT soup in most organisations.

This mess is now being sorted out as a priority. In most organisations, IT is becoming more centralised again. Certainly IT is successfully centralising decision making, even if actual development and operations are still decentralised. One specific area of rationalisation is reduced customisation. Businesses are now much more likely to change their business processes to fit a packaged solution.

As a result, there is a flight to blue-chip suppliers. Even though the majority of the interviews were with Europeans, the number of organisations who are standardising on SAP for their applications surprised me. Many – but certainly not all – organisations expect to outsource more in future. This is extending to BPO too. "In truth, we have no appetite for sorting out our legacy business processes," said one CIO who is looking offshore.

The key project areas in development or rollout are CRM, portals (both internal and external), supply chain management, and data warehousing/business intelligence. Typically, these projects are half to three quarters complete. But, there is no indication as to what comes next. There really are no signs whatsoever of the next wave of new projects.

And what of the changing role of the CIO? Not just that old cliché of getting closer to the business. Today, you need to anticipate business needs, which are often poorly articulated, and then ‘broker’ the right solution. An ability to manage the IT 'portfolio' was mentioned a number of times. On the other hand, you need to be more techno-literate than ever, not just someone who "keeps the clever guys in shape". And, although our respondents did not say so themselves, many clearly display strong leadership skills. Gosh, superhuman or what?

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