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December 4, 2009

Recession forces IT to deliver better value

Report identifies information management as key CIO task

By Vinod

The recession has thrust IT and business closer together as CIOs are tasked with creating more value to improve competitiveness, according to a global CIO report report.

Almost three quarters of the 500 CIOs interviewed in the Capgemini Consulting report had had their budgets pruned by an average 15%, but this meant they were targeting new projects at areas that contributed most to the business or took advantage of the new market conditions. To cope with the budget drop, 67% had renegotiated supplier contracts, 45% outsourced, while 55% prioritised projects with early ROI or high business impact.

“It’s an interesting market, because of the downturn it has thrust IT and business together and the CIO has been asked at short notice to not only bring cost reductions but also improve value to the business,” said Ivar Sinkar executive consultant at Capgemini Consulting.

Ironically, companies that had made most headway in ‘industrialisation’ of their IT, through implementing standard processes and using outsourcing IT strategies, were most threatened by the new delivery model of cloud computing.

“Cloud computing is a turning point. It’s clearly an opportunity in a sense that it can leverage costs out and can get flexibility in, but it’s a bit of threat to IT organisations who have gone the extra mile on industrialisation,” said Sinkar.

Three different IT profiles were identified by the report: technology as a pure utility (24%), IT as a service centre for business (39%) and the third group where IT was seen as a key asset for information leadership (£37%). To become ‘digital winners’ companies must strive to become part of this third group and get closer to the business.  Digital winners were also found to be less affected by the recession.

Information lifecycle management was identified as a key challenge for CIOs and an area where they must proactively take the lead in their companies.

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“CIOs are in a privileged position because they should have a view of where information has come from and where it is going. So they have an opportunity to be the drivers of improved information usage,” said Sinkar.

Capgemini’s fourth Global CIO Report “Harnessing Information Value: could you be a digital winner?” is based on nearly 500 face-to-face interviews with global CIOs across all industries.

 

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