Smart CIOs defy IT budget cuts in 2009

CIOs need to prove the value of bringing IT closer to the business

The economic crisis has had a wide ranging impact on IT budgets, but many chief information officers (CIOs) are actually using the recession to illustrate how IT can provide value to the organisation, according to a new study by consultancy Capgemini.

The Capgemini Consulting Global CIO Report 2009 was based on interviews with 500 CIOs globally. It found that 70 per cent of respondents reported a decrease in IT budgets of 15 per cent on average.

In an effort to mitigate these cuts, many CIOs are renegotiating supplier contracts, reorganising the IT function, prioritising swift return-on-investment projects and outsourcing services.

Over half are prioritising projects that contribute more to the business, while a third are prioritising projects that take advantage of new market conditions.

The IT departments that fared best in the recession were led by CIOs who have been able to prove the value of bringing IT closer to the business, said Capgemini.

The report also found that new technologies such as Web 2.0 and social networks are beginning to drive business innovation, with 41 per cent of IT functions holding regular forums with business users to present the latest technologies.

"IT functions must adapt to new delivery models, which offer opportunities in terms of costs and flexibility, but also challenges with regards to security, privacy, authentication and service level agreements," said Patrick Ferraris, technology transformation global leader at Capgemini Consulting.

"The new delivery models will also set new standards in terms of architecture and costs."