Krigsman: IT spend is growing, but CIOs "just don't get it"

ATN-300InsightaaS: Regular readers of Across the Net are aware of our respect for Michael Krigsman, well-known IT expert and author; we appreciate Krigsman’s tendency to base his posts on extensive research, and to present a distinct (and informed) point of view on subjects that we consider important. In this piece, published on the Enterprise Irregulars site, Krigsman reviews the results of a recent survey by the Society for Information Management which received responses from more than 800 senior IT leaders, including 451 CIOs. The research highlighted several interesting issues. One is that IT spending is growing: over the past three years, respondents report, IT spend has averaged just over 5% of revenue, meaning that "average IT spending as a percentage of revenue for the past three years has been significantly above the 10-year (2005-2014) average of 4.08%" (for the record, InsightaaS statistics show that IT spending in Canada is actually a bit over 6% of all income - revenue in the private sector, operating budgets in the public sector. These figures are relatively close; the difference may be attributable to the gap between CIO visibility into spending and all spending, and/or relatively greater IT efficiency in the large enterprises responding to the survey than from the SMBs who account for 60%+ of Canadian IT expenditures).

Krigsman also highlights findings from the survey showing that there is reasonably good alignment between the importance of different IT investment areas and budget allocations, and reproduces tables that comment on key IT management concerns, IT alignment and credibility, and IT performance measures. It's an impressive collection of data, but still, it feels a bit hollow: the concerns are couched in equivocal language ("It seems that IT is becoming more strategic and business-focused and presumably the organization is becoming more digitized"), the IT alignment and credibility findings smack of IT-out (rather than business-in) perspectives, and the metrics aren't really particularly well calibrated. Krigsman highlights this feeling towards the end of his post, stating that "a body of other research indicates that many business leaders do not think IT provides sufficient value," and concluding with the observation that "there is categorically no substitute for developing strategy-level relationships with senior business decision-makers and other constituencies." It would appear that there are roadmaps in place for where IT needs to go to justify a strategic role in the increasingly digital-centric enterprise, but that there is less actual momentum than there is recognition of the situation and need for change.

The role of IT and CIO continue to evolve as broad economic and cultural changes shift business expectations of technology in the enterprise. As a result, this is a tumultuous time for IT and many of the old rules defining CIO engagement no longer apply.

Technology disassociated from direct business consequence, decision-making, and action is not a viable strategy for today’s CIO. Modern IT must help departments across the organization make better and faster decisions. Although infrastructure and security remain fundamentally important considerations, business improvement is the core mission of IT.

A new study from the Society for Information Management (SIM) documents the changing role of IT and the CIO. The report is among the most detailed and transparent I have seen, representing a huge cut above the shallow, self-serving documents so often peddled in the name of research.

To complete this study, called the 2015 SIM IT Trends Comprehensive report, SIM received 1,002 responses, including answers from 839 senior IT leaders representing 717 unique organizations. Of these, 451 identified themselves as CIO, by title or role. The report includes an appendix describing the research methodology in detail.

The press announcement includes this brief summary:

  1. IT spending is on the rise, with companies on average spending more than 5 percent of revenues on IT (up from about 3 percent from just a few years ago). To illustrate, that means that IT budgets of the largest companies in the Fortune 500 can be as large as 75 percent of all of the companies on the list...

Read the entire post on the Enterprise Irregulars blogsite: Link