Gartner Executive Programs

Leading in Times of Transition:

The 2010 CIO Agenda

4 Executive summary January 2010

10 The economy places a premium on productivity

30 CIO strategic technologies support more collaborative and innovative

capabilities

44 CIOs will lead today and reposition IT for the future

60 Creating your own transition: The 2010 CIO Agenda

67 Further reading
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Leading in Times of Transition: The 2010 CIO Agenda 1

 Foreword

These are times of transition. The economy is transitioning

from recession to recovery. Enterprises are transitioning their
strategies from cost-cutting efficiency to value-creating
productivity. Technologies are transitioning from “heavy”
owner-operated solutions to “lighter-weight” services. In turn,
CIOs are transitioning IT beyond merely managing resources
to taking responsibility for managing results.

2 Gartner Executive Programs

This report addresses the question, What are the strategies behind the 2010 CIO Agenda and how will
CIOs meet the competing requirements placed on IT?

“Leading in Times of Transition: The 2010 CIO Agenda” was written by members of the CIO research
team, led by Mark McDonald (group vice president), who was assisted by Dave Aron (vice president
and research director).

We would like to thank the many organizations and individuals that generously contributed their insights
and experiences to the research, including:

• T
 he 1,586 CIOs who responded to this year’s survey, working across 27 industries and in 41 coun-
tries, and representing more than $120 billion in corporate and public sector IT spending.

• T
 he contributors to our interviews and case studies: José Luis Prola Salinas, Banco do Brasil
(Brazil); Thomas Kiessling, bwin (Austria); Joaquin Uribe Franco, Cerrejón (Colombia); Todd Jack-
son, City of Westerville, Ohio (U.S.); Philip O’Reilly, Department of Agriculture, Fisheries and Food
(Republic of Ireland); Brian Franz, Diageo (U.K.); Gunnar Fröderberg, Folksam (Sweden); Joe Dr-
ouin, Kelly Services (U.S.); Dylan Rogers, Leeds City Council (U.K.); Susan Malisch and Justin
Daffron, Loyola University Chicago (U.S.); Thomas Okke Frahm, Maersk Drilling (Denmark); Mitchell
Habib and Andrew Cawood, The Nielsen Company (U.S.); Michael Steffenson, Nordea (Sweden);
Sumit Chowdhury, Reliance Communications (India); Mike Zill, ResMed (U.S.); and Kevin Cooney,
Xilinx (U.S.).

• Other Gartner colleagues: Susan Fortino.

• Other members of the CIO research team.

Leading in Times of Transition: The 2010 CIO Agenda 3

 Executive summary

Transition gives the enterprise and IT the opportunity to reposi-

tion themselves and exploit the tough corrective actions taken
during the recession. While recovery will not come to everyone
at the same time, enterprises and their CIOs can proceed with
raising productivity and creating the capabilities needed to lead
today and be well positioned for tomorrow. CIOs expect IT to
shift its focus from cost and consolidation to innovation and
competitive advantage. They have aspired to this shift for years,
but economic, strategic and technological changes have only
recently made it realistic.

CIOs see 2010 as an opportunity to accelerate IT’s transition

from a support function to strategic contributor
In times of transition, executives face a shifting environment economically, strategically and technologi-
cally. The decisions they make will open or close strategic options and set their enterprise on a course
of action. Ten years ago, the Internet represented the major shift in the enterprise environment, creating
new industries and industry leaders, and changing the modern business and consumer landscape.

Now the global economy is in transition across multiple fronts: from recession to recovery, from efficiency
to productivity and from owner-operated technologies to social ones. The changes implied by each
transition will impact every organization differently, but one constant will be the rising value of timely and
informed decisions and actions.

4 Gartner Executive Programs

 The 2010 Gartner CIO Survey results are based on the responses of approximately
1,600 CIOs, representing more than $120 billion in IT spend.

In the near term, business expectations and CIO strategies appear stable, with a continued focus on
business process improvement, cost reduction and analytics (see figure below). At the same time, how-
ever, business expectations are shifting from greater cost-based efficiencies to achieving better results
based on enterprise and IT productivity. The different emphasis may seem subtle, but it changes the
way CIOs lead IT. This change is important because it reflects a broader change that CIOs see in their
overall IT organization and its role in the enterprise.

Business expectations for IT call for greater productivity and continued

cost-efficiencies
Business expectations Ranking of business priorities CIOs selected as one
of their top 5 priorities in 2010, and projected for 2013

Ranking 2010 2009 2008 2007 2013

Improving business processes 1 1 1 1 2
Reducing enterprise costs 2 2 5 2 8
Increasing the use of information/analytics 3 5 8 7 5
Improving enterprise workforce effectiveness 4 3 6 4 7
Attracting and retaining new customers 5 4 2 3 3
Managing change initiatives 6 8 3 10 1
Creating new products or services (innovation) 7 6 12 * 12
Targeting customers and markets more effectively 8 7 9 * 9
Consolidating business operations 9 11 13 * 16
Expanding current customer relationships 10 9 7 * 10
Supporting regulation, reporting and compliance 11 12 14 13 15
Creating new sources of competitive advantage 12 13 11 8 4
Expanding into new markets and geographies 13 10 4 * 6

* New question for that year

CIOs see a very different future for IT by 2013—one based on innovation, competitive advantage and
customer growth. CIOs had similar aspirations in the past, but economic, strategic and technological
changes are now setting the stage for turning aspiration into action within a few years. These changes
are the foundation of the 2010 CIO Agenda, which covers the three main factors every executive must
address to lead in times of transition:

• An economy in transition places a premium on results productivity versus cost-efficiencies.

• Enterprise strategies are shifting toward more collaborative and innovative solutions.

• T
 he rise of technologies such as virtualization, cloud computing and Web 2.0 are creating a new
IT landscape.

Leading in Times of Transition: The 2010 CIO Agenda 5

 Executive summary

Each factor entails new opportunities and challenges for the enterprise, the CIO and IT. How the CIO
leads in 2010 is particularly relevant, since more than half of CIOs responding to this year’s survey
believe their IT organizations will change as the enterprise recovers.

IT will not change overnight. To lead the transition, CIOs will first have to address the context they face
in 2010, a challenging year in its own right. They will need to navigate based on where their enterprise
and IT organization stand with regard to economic conditions and IT opportunities (see figure below).

While enterprises will transition at different rates and times, every CIO faces the need to raise productiv-
ity, create new capabilities and use the recovery to drive fundamentals of the current agenda and the
repositioning of IT. Such transitions start with the decisions and directions established in 2010. Where
you see yourself in the figure below, along with your intended future direction, set the context for 2010
plans and future strategies.

Changing economic conditions place increased emphasis on raising

productivity and innovating enterprise capabilities
Innovate
Reducing enterprise and IT costs: Efficiency

CIO/IT
opportunity ties
apabili
rpr ise c
Ente

Raising enterprise and IT productivity

Optimize
Recession Recovery Growth
Economic conditions

6 Gartner Executive Programs

 In 2009, if you could do the same things for a lower cost, then you were more efficient.
However, if you can do the same things and more at the same cost, then you are more productive.

The economy places a premium on productivity

The often-uneven transition from recession to recovery places a premium on raising productivity
across the enterprise and within the IT organization. Leading CIOs are shifting the logic behind how
they manage IT.

The statement at the top of this page makes a subtle but important distinction. Future-oriented IT
organizations use “more productive” strategies to create operational and strategic advantage, while
their “more efficient” brethren can only claim to cost the enterprise less.

Just about every CIO survived 2009 by cutting costs to make IT more efficient. However, to remain
competitive in 2010, enterprises will need more than lower costs. Business expectations now center on
productivity, as the figure below illustrates.

Without productivity gains, the enterprise will be unable to act as the economy improves. CIOs will find
their IT resources tied up in supporting yesterday’s operations rather than freed up to create the new
solutions and services necessary to reposition IT.

Economic conditions require CIOs to shift their focus from cost-efficiency

to raising resource productivity
Efficiency Productivity
Do more with less Work smarter, not harder

• Cost per unit • Output per unit

• Reduce unit cost • Increase performance
• Assume there is waste to cut • Assume there is future work to do
• Consolidate/centralize/standardize • Concentrate/differentiate/focus
• Manage demand to fit supply • Schedule first things first and faster
• Manage standard services • Concentrate capabilities

Leading in Times of Transition: The 2010 CIO Agenda 7

 Executive summary

Strategic technologies support more collaborative and

innovative capabilities
Productivity gains will come from collaborative and innovative solutions that take advantage of new
service-based and social media technologies, including virtualization, cloud computing and Web 2.0 so-
cial computing. As shown in the figure below, these strategic technologies are of increasing importance to
the CIO. Exploiting them provides the cost, capacity and capability gains needed to define, source, create
and deploy information- and process-intensive solutions that reshape IT and its future role.

CIO strategic technologies reflect increased interest in “lighter-weight”

solutions
CIO technologies Ranking of technologies CIOs selected
as one of their top 5 priorities in 2010

Ranking 2010 2009 2008 2007

Virtualization 1 3 3 5
Cloud computing 2 16 * *
Web 2.0 3 15 15 *
Networking, voice and data communications 4 6 7 4
Business intelligence (BI) 5 1 1 1
Mobile technologies 6 12 12 11
Data/document management and storage 7 10 9 9
Service-oriented applications and architecture 8 9 10 7
Security technologies 9 8 5 6
IT management 10 * * *
Enterprise applications 11 2 2 2

* New question for that year

CIOs will lead today and reposition IT for the future

Every transition requires leadership, and every transition changes the leader. The CIO’s role in the enter-
prise is solid when it comes to IT-related issues. But today’s CIOs are not only leading IT, they are transi-
tioning IT skills, business relationships and the business’s expectations. A CIO defines current results and
future opportunities by raising the IT organization’s capability.

Overall, CIOs have the opportunity to begin transitioning IT from managing resources to managing for
results. The figure opposite shows how resource-based and results-based IT differ. CIOs have wanted to
make this transition for some time. However, past attempts to manage IT as a business, profit center or
similar entity ran up against economic, strategic and technological barriers. In 2010 and beyond, these
barriers are coming down, giving CIOs the opportunity to lead in transitioning IT to a new future.

8 Gartner Executive Programs

 CIOs are looking to transition IT to a results-based organization within a few
years
Resource-based IT Results-based IT

• IT enables the business • IT contributes to the business

• Proving that we are not wasting resources
• Benefits realization is a business responsibility
• Schedule driven by resources
• Balance supply and demand
• Supplier cooperation leading to commoditization
• Business and IT
• Technical performance = value
• Proving that we are raising productivity and innovation
• Benefits realization is everyone’s responsibility
• Schedule driven by priority
• Demand drives supply
• IT competes in a world of enterprise choice
• Business first, second, always
• Business performance = value

Creating your own transition: The 2010 CIO Agenda

The economic, strategic and technical changes highlighted in this year’s survey results will reach dif-
ferent enterprises at different times throughout the coming year. More than ever, CIOs will have to face
these transitions in their own context, on their own schedule and on their own terms. Thus, in 2010,
CIOs will be creating their own transitions rather than following a standard recipe or strategy.

During the recession, CIOs demonstrated their ability to control costs. In 2010, their agenda will be
based on delivering both productivity and capability. Their 2010 results will determine their ability to
reposition IT’s role in, and contribution to, the enterprise, making this a year of transition—crucially
important for IT, the CIO and the enterprise.

Leading in Times of Transition: The 2010 CIO Agenda 9