Chief executives will invest more in technology, but the IT department and the CIO role will radically change in five years time in the face of Web 2.0, emerging markets and software as a service, according to analyst firm Gartner.
IT demand has been on the increase, and chief executives are once again investing in technology to increase innovation and spur business growth, said Mark Raskino, vice president, Gartner Research at a keynote session at the Gartner CIO Summit 2007 in Barcelona last week.
Results from the worldwide Gartner EXP Survey of more than 1300 CIOs revealed executives are optimistic that IT budgets and spending will increase again in 2007 after similar modest increase over the last three years.
"The reputation of IT among CEOs has recovered from the battering it took after the dot-com fallout — when big projects and spending between 1998 and 2002 did not initially produce the quick business returns promised by the IT industry," said Raskino. "Afterwards, there was an economic trough, IT budgets and project plans were cut back."
Raskino said the industry is currently in a "second hype cycle" around technology investment, as CEOs look towards Web 2.0 applications as a way to connect to customers and partners. "This finding may surprise some IT leaders who feel somewhat browbeaten by the years of low funding that followed the dot-com crash. But business-leader confidence in IT's positive value-creating possibilities has now been truly restored."
However, CEOs will also place new demands and higher expectations on CIOs and IT directors. "IT leaders will be challenged to change and adapt. Those who cannot make the turn could be replaced."
Today's CEOs want CIOs to focus on three things: "Innovate, industrialise and internationalise".
Innovation will involve hiring skilled people to exploit Web 2.0 technologies. The industrialisation of computing will mean executives expect IT to be run as a low-cost, efficient utility providing service to the business.