Think globally and acti locally is a fine mantra for the green set, but it simply doesn’t carry over when it comes to hiring the best people for your IT organization. And yet, that’s what many CIOs are doing: trying to compete in a global market while limiting their search for new employees to the region in which their company resides.
The reason? Well, to twist a phrase: It’s the stupid economy. At least that’s what Todd Thibodeaux, president and CEO at CompTIA (Computing Technology Industry Association), has come to believe after talking with IT leaders around the country in recent weeks. After hearing these folks bemoan the total dearth of job candidates with soft skills, project management experience and so forth, he asked how many of them kept their searches regional. The hands flew up. This, Thibodeaux said, is consistent with data around the country, which shows that companies are scared or unprepared to widen their nets because it might cost more money.
By and large, Thibodeaux noted, companies aren’t taking the time to reevaluate positions to identify jobs that could be done remotely — perhaps because they don’t have the infrastructure to support remote workers. Or, with many folks underwater on their mortgages, paying for a potential employee’s relocation becomes a scary prospect. But by avoiding the financial risks, these companies are missing out on great employees who could improve productivity and introduce skills that could wind up enhancing the company’s financial position.
“What we have right now are surpluses of skilled people in some parts of the country and deficits of skilled people in other parts of the country,” Thibodeaux said. “The thing for people to do is look nationally for talent, and if you find someone really good, either take the risk and relocate them or take the risk and let them work remotely; I’m not sure you have a tremendous amount to lose.”]]>
And this pigeonhole of a metric certainly doesn’t reflect the ever-evolving and growing importance of IT investments in relation to a company’s ability to grow and compete. The run, grow, transform (RGT) model may be a better approach.
Read my CIO Matters column to see why Richard Hunter, vice president and Gartner fellow, recommends using a RGT model (and other more forward-looking metrics) for allocating IT spend, and learn about the real-life challenges CIOs encounter when using said RGT model.]]>
The figures are based on responses from IT executives and technology decision makers at 3,752 enterprise and SMB firms surveyed by Forrester from October to December 2011.
There are other signs that mobile is where CIO minds are at these days. Despite the ongoing hype around cloud, spending on cloud-based services like SaaS, Platform as a Service (PaaS) and Infrastructure as a Service (IaaS) accounts for less than 5% of IT budgets. Full-time IT staff continues to take the biggest chunk of IT budgets (27%).
The report notes that the increased spending on mobile software and hardware is not just about the money. Mobile computing and consumerism signal a major shift away from IT departments as the commanders-in-chief of technology to the rising role employees play in tech decisions. According to the report, 23% of the IT leaders polled said their business groups wanted to be more involved in IT decisions about technology in 2011, compared with just 6% who saw a decrease in business involvement.
Frankly, based on our reporting on mobility and the consumerization of IT over the past two years, that 23% seems low. CIOs like Rick Roy, just to name but one of the mobile pioneers profiled in our CIO Innovator series, caught the shift early. His meticulously plotted strategy to mobilize CUNA Mutual Group included developing 18 different personas to pinpoint the mobile needs of the insurance company’s 4,000 employees.
What piques my interest lately is not mobile spending, although it is always useful to follow the money. (Or, for that matter, how employees are influencing tech decisions. Old news.) I want to know how CIOs are using their mobile dollars to transform business models at their companies — and in the process maybe even rendering the competition’s models obsolete.
Mobile computing is disrupting tried-and-true business models and centuries-old establishments. The seeds are being planted right now. The decision by Harvard and MIT to offer courses available to anyone who has a phone with an Internet connection is just one recent example. I’d like to hear how you think mobile spending is going to shake up your business. Let me know.]]>
In 2009, more than half of organizations surveyed suffered budget cuts. In 2011, however, 56% of IT budgets increased, a healthy percentage compared with 2010, when 34% of organizations saw their IT budgets go up, and to 2009, when 25% of organizations reported IT budget increases. These results are based on SIM interviews with CIOs at 275 organizations in late June.
“It’s probably the biggest jump I have ever seen, and puts us back at pre-recession levels,” said Jerry Luftman, distinguished professor at the Stevens Institute of Technology, who conducts the research for SIM’s annual benchmark.
IT leaders expect the positive trend to continue into next year. Despite talk of a double-dip recession, 84% of the CIOs surveyed expect 2012 budgets to equal or exceed 2011 levels. In one area, IT budgets did decline in the 2011 CIO survey: The percentage of corporate revenue allocated to IT dropped from 3.8% in 2010 to 3.5% in 2011. Luftman has attributed the decrease to a rise in corporate revenue last year and to the historically high percentage of corporate revenue allocated to IT over the past three years — which, at nearly 4%, was well above the average 3.6% of the past six years.
On the hiring front, turnover remains quite low, at 7%, partly because retirement-age boomers can’t afford to retire and partly because there are fewer job openings for senior-level positions, Luftman said. CIOs tell him that when an experienced staff member does retire, they are using that senior-level salary to hire two “newbies,” who cost less and often come in with the newer skills and technology expertise CIOs need. On the bright side, however, overall spending on salaries is trending up:
BI a hard nut to crack
Given their plushier budgets, what are CIOs spending money on? Business intelligence (BI) outstripped cloud computing; ERP systems; mobile and wireless apps; and customer relationship management, or CRM, systems as the top technology investment by CIOs in 2011, according to the survey — and by a long shot.
“BI was a standout — it was 50% higher in the rankings than all the others, which were relatively close in ranking,” Luftman said.
But it appears the upstarts are poised to give BI a run for its money. Mobile and wireless apps took fourth place, up from ninth last year and 13th in 2009. Cloud computing occupies second place, up from fifth place a year ago and 17th place in 2009, the year it made its debut on the SIM survey. The wide disparities in the amount companies are investing in cloud, however, show how nebulous this new computing model remains, Luftman said:
In one respect, BI’s top standing in the SIM survey is no surprise. The technology has ranked first or second on the SIM list of the top five CIO investments since 2003, Luftman said. The reasons for the heavy investment in BI, however, keep changing, he added — a mark of just how hard it is to extract potentially valuable insight from the reams of data collected by businesses . “Initially, BI ranked high because of the complexity of getting your databases in order,” he said.
As organizations have mastered the technical challenges of their BI investments, they have recognized they don’t have the talent to support the technology, Luftman said. “You can’t throw a tool up and expect magic to come out.” The portfolio of required skills goes beyond understanding databases and the way the technology works (important as that is) to include statistical and in-depth business knowledge. People with that combination of skills are “few and far between,” he said. The large volume and the velocity of data generated by companies — Big Data — adds to the challenge. “It is one of the more complicated technologies that we have been engaged in in perhaps in 50 years,” Luftman said — and SearchCIO.com can attest to that in our coverage of Big Data.
CIOs still have serious worries. Of the Top 10 IT management concerns of 2011, the first four focus on using technology to help the business compete. IT and business alignment claimed the top spot in 2011, followed by business agility and speed to market. Reducing business expenses through business process management and re-engineering took the third spot; and increasing business productivity and cost reduction came in fourth. Rounding out the Top 10 management concerns, in order, are these:
5. IT strategic planning.
6. IT reliability and efficiency.
7. Enterprise architecture/infrastructure capability.
8. Security and privacy.
9. Revenue generating IT innovations.
10. IT cost reduction.
My anticipation quickly dissipated when I learned that many iPhone OS 4 features — including, most notably, multitasking — wouldn’t filter down to the 3G (nor to the original iPhone and iPod Touch versions that preceded it). Yes, I might still have access to application folders (so I won’t need five full screens of apps) and the upgraded e-mail functions, but no multitasking for me. I immediately started to consider whether the software update would make it worth my while to trade up to a snazzy new iPhone this summer, 3GS or otherwise. TBD. Let’s see if my tax refund materializes.
It dawned on me that this is what enterprise CIOs must debate when it comes to computer hardware upgrades, and I expect the issue to be particularly pertinent in 2010. A recent Morgan Stanley survey of 150 CIOs found that technology budgets will be up 3.2% in 2010, a 1.5% increase from January, when the same survey was done. Computer hardware upgrades lead the spending spike, with a planned 4.1% increase, followed by a 3.7% increase in software spending.
I suspect a lot of this jump represents delayed demand. Many enterprises held off on computer hardware upgrades last year, when the recession was in its deepest doldrums, as they hunkered down and did more with less. Why buy new desktops when the old ones would do?
But while hunkering down and holding the line might have worked in 2009, it likely won’t fly in 2010, when companies are under increasing pressure to not only survive, but to show increasing revenues as well. So, what happens if a new software or delivery model is the key to building your revenue, but you don’t have the hardware to support it?
I’m guessing a simple tax refund won’t be enough to buy all those new desktops or laptops in your organization. What’s your strategy for computer hardware upgrades in 2010?]]>
Why the long look back? I hate to be trite, but if you don’t learn history you’re doomed to repeat it — yes, CIOs, that includes you. A lot of desperate measures — or at least, that’s how they were viewed at the time — were put into place in IT organizations in the past year and a half. These included reduced IT staffing levels, an increased emphasis on business process management — you don’t need me to tell you, because you’re probably the one who had to make these difficult management decisions. I think we’re all looking forward to the day — maybe it will come later this year? — when IT budgets will loosen once again, allowing for the rededication of resources to IT, which can help move the entire business forward.
But if you enterprise CIOs go back to the old way of doing things once your budget dollars start trickling back, be warned that you’ll most likely be falling behind your peers. That’s because 2009 IT lessons will play a key role in dictating the future of IT.
The IT organization will always be charged with examining and implementing emerging technologies, but we’ve got to accomplish those “keeping the lights on” tasks quickly and efficiently, too. In all likelihood, business process automation will explode over the next few years as IT organizations find a cheaper way to complete this repetitive work. Business intelligence tools and dashboards will also be huge, as enterprise CIOs must keep track of an ever-widening playing field. IT outsourcing, which I covered quite a bit over the past year, will certainly make up a piece of the pie in replacing IT staffing without the salary commitments of the past.
What 2009 IT lessons are you carrying into your IT plans for 2010 — and beyond? Sound off below!]]>
It could go either way. Naysayers point to the iPad’s inability to run simultaneous apps (a big whiff, in my book), but others say it will play a big role in the enterprise and sooner than you might think — for example, this piece in The New York Times:
“The iPad is clearly one of those universal technologies that will be as useful in the home as in the office. Much like the iPhone, people will want it for work simply because it will be useful for getting work completed. Like any Apple product, it’s easy to use. It’s lightweight. And it’s mobile. Plus, this baby is as sleek as it gets.
“According to Forrester Research, the iPad will be particularly well suited to the high-end mobile office worker. These people will pay for the tablet themselves. They will primarily use it for messaging and collaboration and to access email, calendars and productivity applications.”
It’s really consumers who fell into a full-tilt swoon when they heard the iPad price point of $499 (and up, depending on your Internet coverage). And it’s consumers who will purchase the iPad for their own use — and quickly realize its benefits as an enterprise business tool and efficiency booster, if those benefits do indeed exist — that will shuttle this new tablet into the enterprise.
So, don’t be tempted to tinker with your existing hardware budget based on the iPad’s promise, at least not yet. A lot of CIOs have held off on hardware replacements since the economy took a nosedive, and once some of those dollars return to IT budgets, you can bet they’ll be looking to upgrade. But most IT shops still run on PCs and Windows, and — especially with the positive buzz around Windows 7 (as opposed to Vista grumbles) — I don’t see that changing.
If there’s a can’t-miss enterprise use for this baby, your users will let you know. If you decide to purchase an iPad for your personal use, explore its apps and interface with an eye to business efficiency.
I know we’ve all probably blogged and Tweeted the iPad to death already for the past few days, but I’d really like to hear whether you foresee the iPad being successful as an enterprise business tool, and how you see it entering that sphere.]]>
You get the picture — it’s all over the board.
In an attempt to put some data to these impressions, I checked the most recent predictions coming out of the research houses and found them to be no help at all. What can you make of things, when Gartner is predicting a 1.3% growth in IT budgets for 2010 — so basically flat — while Forrester Research is projecting 6.6% budget growth for the IT market in 2010?
Certainly, the Gartner prediction is more in line with other surveys out there. Our own TechTarget polling shows the majority of CIOs expect IT budgets to be flat or smaller this year. Then again, Gartner got 2009 wrong, starting out by predicting roughly 3% growth in IT budgets in 2009 only to revise that number downward quarter by quarter. This week, Gartner proclaimed 2009 the worst year ever for IT budgets: down by 8.1%, wiping out four years of growth.
Meanwhile, over at Forrester, analyst Andy Bartels told me it is not surprising that CIOs are telling survey takers that budgets are flat or down next year. “Coming out of recession, they want to be cautious; they don’t want to go out on a limb,” he said. Barring the country slipping back into recession, however, he is convinced that CIOs “will get leave to spend over their budgets.”
Question of the day: Are you getting any signals from the boss that you’ll be able to spend over your official budget this year?]]>