CIOs spend limited IT budget to sharpen competitive edge

Enterprise IT budgets are expected to be flat in 2010 but CIOs should use those funds to adopt new technologies and solve daily operational irritants that detract from strategic, competitive projects. At least this was the advice Gartner dished out as it made public some details of this year's globa

Enterprise IT budgets are expected to be flat in 2010 but CIOs should use those funds to adopt new technologies and solve daily operational irritants that detract from strategic, competitive projects.

At least this was the advice Gartner dished out as it made public some details of this year's global CIO survey, in which it also said IT leaders should be prepared to move from cost cutting actions to seeking productivity gains.

Mark McDonald, Gartner group VP of programmes, said 1,600 companies with an IT spend of $126bn surveyed last year had showed average year-on-year budgets declines of 8% to wipe out increases in the previous four years.

"CIOs see 2010 as another tough year; 41% expect continued business contraction, while 53% see stabilisation and 6% see actual real growth coming," he said.

The recession drew attention to cost cutting activities including virtualisation - yet only one in five servers has been virtualised - and outsourcing commodity services.

The continued adoption of these technologies will take the industry closer to the far-off nirvana of self-automated systems.

"People know that IT is strategic but it's the operational issues that get in the way of realising that value," said MacDonald, adding 50% of respondents expected the look of IT and their role in it to change as the economy lifted.

"2010 should be the year that we make the transition from IT being a resource based back office function to become a results based source of innovation and advantage," he added.

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