by Gary Beach

The State of IT Spending in 2001

Sep 15, 20012 mins

CIOs CLAIM THEIR MOST IMPORTANT GOAL is to align business and technology strategies. During the last 18 months, however, CIOs have allowed business strategy to subsume technology strategy. And it’s gotten to the point where CIOs are putting the very existence of their lofty positions in peril.

It wasn’t that long ago when CIOs were aggressively building out expansive infrastructures to link employees, partners and customers. Then the economy crashed and many CIOs?in an effort to improve lagging corporate profits?kowtowed to corporate edicts that curtailed technology investments.

Initially, this Hippocratic-inspired tech strategy did no significant competitive harm because most businesses in America were acting and spending as if they were slated to go out of business within 12 months. And some will.

But other companies will grow because they are already emerging from the technology-spending doldrums. Recent findings from the monthly CIO magazine Tech Poll done in partnership with Edward Yardeni, chief investment strategist at Deutsche Banc Alex.Brown, point to CIOs in the retail and business services industries now planning robust double-digit spending increases in the next year. The spending plans of CIOs in the financial and health-care sectors are not far behind.

As a CIO, do you strongly believe information technology products and services are your company’s key competitive advantage? If you answer no, then get another job. If you answer yes, then now is the time to stand up and pull your tech spending plans out of the trash.

For years, IT was a cost to be contained or cut by the finance or operations staff. Until the recent economic funk, IT had migrated to investment status where build-outs of elaborate electronic webs were slated to increase sales, lower costs and improve productivity. CIOs became boardroom heroes. Some even became CEOs.

Since last fall, however, CIOs have ceded too much power back to CFOs. It’s time to take that power back. To do so, CIOs need to put on their sales shoes and reconvince their boardroom colleagues that the future existence of their company rests on the shoulders of smart technology strategies.

If your pleas fall on deaf ears or are drowned out by the green shades, resign your post and move on to another company that truly believes in the power of technology to produce sustained competitive advantage.