Time for CIOs to Rebuild Infrastructures

I was recently asked to give my views on the state of CIO affairs. How is the economy affecting CIOs’ plans, budgets and influence? Here’s what I’m seeing.

While the slowed economy is causing CIOs to significantly scale back the somewhat extravagant plans cooked up a year ago, they still intend to spend more than last year. In CIO’s March 2001 Tech Poll, done in partnership with Yardeni.com, panelists said their budgets would grow by 9 percent during the next year, compared with the 19 percent increase they predicted last November. (For details on the poll, visit www.cio.com/online/040901_techpoll.html.)

During the last two years, business units and departments feeling the urgency to become e-enabled spent many discretionary dollars on new IT initiatives. As these dollars dry up, IT decision making will return to the centralized control of IS. In fact, over 40 percent of respondents to a study by Robert W. Baird & Co. indicated that IT decisions will be more centralized in 2001. This centralized control, however, will be much more flexible and inclusive than in the past.

These two factors?slowed investment in new initiatives and the return of control?will give CIOs the opportunity to complete the work they began a few years ago: rebuilding their infrastructures. This means integrating existing systems with new customer front ends and supply chain extensions. The focus will be on robustness, reliability, security and seamlessness.

While the staffing crunch has eased because of the recent wave of layoffs and hiring freezes, there’s still not an abundance of qualified IT workers, and CIOs will continue to explore new sourcing options. (For an often overlooked source of talent, see “The High Price of Age Discrimination,” Page 134.) Anything not considered core or strategic development is a candidate for outsourcing.

CEOs and shareholders are more eager than ever to get some payback from the unprecedented spending of the last couple of years. So while new technologies continue to be high on the list of CIOs’ interests, the main thrust this year is not to break new ground but rather to rationalize and make bulletproof the still nascent IT-enabled enterprise.

P.S. In order for businesses to adapt more rapidly in the evolving economy, future leaders must have the same information as incumbents. Therefore, CXO Media and the staffs of CIO and Darwin magazines are supporting education and lifelong learning through our editorial coverage and our various projects at colleges and universities across the nation. As part of this effort, we are pleased to sit on the advisory board of Pace University’s School of Computer Science and Information Systems and sponsor its Award for Leadership and Service in Technology. We congratulate this year’s winner, Leslie Tortora, managing director and CIO for The Goldman Sachs Group, who will be honored June 11 in New York City.