Chief executives in the US and the UK are switching from cost-cutting to return to revenue growth in 2010, according to a recent survey by IT research and advisory firm Gartner.
In 2009, CEOs initially placed cost cutting at the top of their priorities to cope with the sudden and severe recession while in 2010, the focus for 71% of business leaders is a return to revenue growth.
The survey showed that 62% of CEOs recognise that IT-enabled changes will be a key element in their post-recession strategy while 13% disagree. 42% of business leaders are already focusing more on revenue growth than cost control.
Mark Raskino, research vice president of Gartner, said: “Business leaders are gasping for growth after a long period holding their breath, and they are expecting to increase the importance of IT in their post-recession approach.
“It is critical that CIOs review business leaders’ rapidly changing tactical business priorities and often unstated new expectations of where IT can help as the economy turns. CIOs are in a good position to have that conversion right now.”
According to the survey, 29% of business leaders expect to see a return to revenue growth as their primary focus in 2010. Only 10% do not expect revenue growth to be their primary driver until beyond 2011. Similarly, business leaders’ investment attitude towards IT is reasonably positive. In addition to the 43% of respondents who will increase IT investment level, 45% will keep the same IT investment level, while only 13% of them are expected to decrease IT investment level.
CEOs and business executives are making customer focus as the top priority for 2010, with 85% of respondents reporting that retaining and enhancing their existing customer bases will be their top priority next year, while attracting and retaining skilled talent was the third priority, and reducing costs has become the fifth priority, Gartner said.
The survey found that CEOs and business executives expect only low business-activity growth in 2010. When asked about their expected changes in core production or service activity volumes in 2010, 20% of respondents expect no change, 49% expect an increase, but 31% expect a decrease.
Gartner conducted a survey of 190 senior business executives, 81 of whom were CEOs. It examined companies in the US and the UK with annual revenues of more than $1 billion in the third quarter of 2009.
Mr Raskino added: “This further suggests very few business leaders are anticipating any sort of V-shaped recovery, and business volumes will not recover quickly. With the expectation of a modest rise in business activity, CIOs should control infrastructure investments accordingly. Now is the time for CIOs and their teams to help power economic recovery and make a major contribution to the future prosperity of their businesses.”
