IT Must Create Products, Not Just Cut CostsIT Must Create Products, Not Just Cut Costs

Budget Pall Has Lifted

Overall, IT leaders are feeling good about their companies' prospects and the growth of their IT budgets. More than 70% of survey respondents think their company's revenue will increase this year and only 5% think it will fall. When it comes to IT spending, 61% think it will rise this year, including a surprising 24% who think it will rise 10% or more. Only 13% think their IT spending will fall.

For IT leaders who grinded it out through the recession, who did their part to cut budgets and freeze salaries, to postpone and reprioritize projects, now is the time to deliver growth. Hilton is spending well over $100 million on technology projects in support of those 17 top-priority enterprise projects. "We've won that funding and support because we demonstrated in tougher times that we can also take advantage of efficiency opportunities, and reduce costs in a sustainable way," Webb says. "With that comes the credibility to reinvest."

Asked if the budget process fosters innovation, just 41% agree and 27% disagree. Asked if innovative new ideas are well funded, 38% agree and 28% disagree. So even if there's more money to be had, IT leaders aren't universally confident the dollars will lead to innovation.

IT needs to measure its worth by its contribution to products and customers. And more CIOs are taking that focus, our data shows.

IT leaders are spreading their time between strategic issues and the tactical realities of running a technology organization, the survey shows. Asked for the three areas they spend the most time on, No. 1 is driving technology standards and processes, No. 2 is working with the CEO and other senior executives on strategy, No. 3 is measuring IT performance, and No. 4 is exploring the "next wave of technologies." Far down the list are issues of budgeting and staffing.

Asked to name just one main priority, however, CIOs focus on products more than any other choice: Just more than one-fourth (26%) cite using data to influence new products and drive growth. Two years ago, just 15% cited that as the main opportunity for CIOs.

CIOs can't ignore their responsibilities to cut costs and improve processes. But they must spend more of their time thinking about "what does the customer want and need from me?"

Research: 2011 Global CIO Report

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