Gobal IT consultancy Gartner has unveiled a preview of its 10 'CIO Resolutions for 2006', which chief information officers and IT directors should make a priority over the next twelve months.
Gartner has urged IT leaders to embrace these actions to create additional value for the business and to differentiate themselves from their peers.
"In 2006 businesses and their IT organisations will be caught between opposing forces. An unpredictable economy and declining business confidence will combine with a surge in innovation as markets begin to embrace emerging technologies," said Mark Raskino, research Fellow at Gartner.
"To get through this confusing and unstable period, IT leaders must drive their organisations with one foot on the accelerator and the other hovering over the brake," he added.
To achieve this, Gartner's CIO Resolutions for 2006 advise on IT management capability improvements beyond the core delivery and operational work plan for the year.
It does not repeat the well-known priorities such as cost control, security, sourcing, compliance and portfolio management, which remain the baseline for good performance and value. They are grouped into three strategic themes:
A. Choose 2006 tactics towards a 2008 strategy
- 1. Educate your business about the second Internet revolution (before someone else does).
- 2. Set some 'do not migrate' orders in advance.
- 3. Target 2008 for major innovation delivery.
B. Insist on agility - in the heart of the organisation
- 4. Get yourself and your team ready for your next jobs.
- 5. Start a significant 'software as a service' implementation as a trial and education.
- 6. Organise your merger and acquisition capability.
C. Push beyond 2005 comfort zones - in value focus and technology
- 7. Revisit capitalisation with your chief financial officer (CFO).
- 8. Build your brand and your team.
- 9. Refresh your meetings with the chief executive officer (CEO).
- 10.Check out some 2006 'hot' technologies.
Theme #1: Choose 2006 tactics towards a 2008 strategy.
Many of the challenges that businesses will face in 2006 will take years to accomplish.
Mainstream availability of service-oriented software, virtualised infrastructure facilities and the rising penetration of consumer devices into business environments are just a few examples that mark the start of the most extensive and complex legacy migration that IT organisations and the IT industry have yet to undertake.
It is imperative that CIOs create road maps and action plans that will deliver controllable, short-term benefits with a longer-term goal and vision.
When the hype around e-business died down in 2003, many made the mistake of either ignoring the quiet advance of Internet business opportunities or believing they had mastered it.
The second Internet revolution is now unfolding and the power and capability of mature Internet technologies, penetrated into all aspects of economy and society, are set to create more business upheaval.
CIOs must ensure the new disruptive implications of the Internet are fully understood and educate the boardroom on forthcoming threats and opportunities.
While many business leaders view IT as pivotal to change, technology is also often seen as a source of inertia to change within their own organisation. One of the root causes of this continues to be legacy IT.
Many companies are being strategically damaged by legacy systems which are complex, expensive and slow to change, yet remain stubbornly in place. This inflexibility is slowly destroying some businesses.
For example, in some markets, new specialist business process outsourcing (BPO) service providers are poised to gradually absorb the core business of their inefficient customers. It is time for these systems to be retired before even greater business opportunities are severely hampered.
Economists' opinions differ about prospects for 2006 and 2007. However, many business leaders and strategists will start planning for 2008 as a milestone year when major world events such as the United States Presidential election and Olympic Games combine to create a potential high tide of economic confidence.
From 2006 it is likely that business development projects will be aligned to targets for 2008. CIOs must ensure that IT-enabled opportunities are proactively offered to the planning debate, including a clear case for key infrastructure and business architecture projects that require a longer term or 'greenfielding' approach.
Theme #2: Insist on agility - in the heart of the organisation.
The need to focus on agility and resilience has never been greater as businesses continue to embrace opportunities and deal with uncertain trading conditions. CIOs should consider their public profile and engage in activities such as public speaking, which can help with perception of the brand, visibility of IT's contribution to the firm and the CIO's own credibility.
Business skills will be in short supply in the IT organisation and CIOs should consider handpicking business people to join the organisation. They should also create at least one direct report position without portfolio to lead change as the roles, organisation, infrastructure and sourcing of IT all begin to transform.
The failure of poorly crafted application service provider (ASP) offerings from the dot com era is now a distant memory. While there is hype around the concept of 'Web 2.0', there is underlying substance to the trend.
High performance applications of moderate functional complexity can now be delivered over the Internet on a pay to use basis. CIOs should ensure their department lead the first experimental introduction to this technology in 2006 to master how and when to exploit the delivery mechanism.
Throughout the last 18 months, merger and acquisition (M&A) activities have gathered pace and will continue to be a priority in 2006.
Gartner believes around two thirds of organisations will have their IT portfolio impacted by mergers, acquisitions and divestitures. CIOs should maintain budget contingencies, keep IT due diligence teams prepared and ensure CEOs recognise the need to inform them of upcoming M&A activities at the very earliest stage.
Theme #3: Push beyond 2005 comfort zones - in value focus and technology.
As IT organisations transition their value contribution towards business processes, information and relationships, the opportunity exists to refocus on the design and management of business process and relationships. However, there are significant barriers to credibility, skills and understanding.
2006 is the year to start expanding the boundaries of value that CIOs can deliver. CIOs should begin by building a solid partnership with the CFO -- a power-player worth cultivating.
They need to ensure a balance between repeated low percentage rises in IT budget, which will continue in 2006, and generating funds for urgent business projects. Ensure time is set aside to address short- and long-term financial issues.
As the focus shifts towards business processes, it is essential to consider the image the IT organisation portrays to the rest of the organisation. 'Information management' and 'business process engineering' are department names worth considering.
Ensure recruitment is focussed on the capabilities to drive business value rather than on short-term technology needs.
It is essential that communication with the CEO is more proactively managed. Gartner's ongoing client interaction shows that few CEOs meet with their top IT professionals more than five times a year.
The low frequency and non-strategic nature of these interactions create major business risk as changes in business direction will be slow and poorly communicated to the IT organisation.
A business operating in today's modern economy cannot be effectively managed with so little leadership attention directed at IT.
Finally, CIOs should be sure to expand the scope of the technology tool kit by exploring emerging technologies outside the regular boundary of the business. In order to stimulate real business benefit and advise management on the opportunities they offer, CIOs should see, touch and use at least three of the following in 2006:
- Web-based micro-applications like Writely.com or Numsum.com
- A new generation games console e.g. Nintendo 'revolution' or Xbox 360
- A head-mounted display
- Google Earth
- An in-house pilot of a consumer technology (e.g. work-from-home over broadband, PodCast company communications)
"Like any new year, 2006 is going to present a fresh set of challenges, but it will be unique because it will combine business turbulence with the transition of IT value contribution and multiple changes in technology itself. CIOs should include these resolutions in their work programmes in addition to the core portfolio," said John Mahoney, chief of research for IT management at Gartner.
"Those who don't use the resolutions to get themselves and their organisations in good shape may find 2007 an unpleasant white-knuckle ride."