Despite business slowdown, CEOs to increase IT spending: Gartner

by CXOtoday Staff    Apr 16, 2012

A majority of CEOs see current economic downturn impacting their business. However, they plan to increase IT investments in 2012, rather than cut it.

With the overall global sentiment being dull, CEOs across the globe are showing signs of living 2012 hesitantly, according to research firm Gartner.

A new CEO and Senior Business Executive Survey from the firm found that 85 percent of CEOs believe their enterprises will be impacted by an economic downturn in 2012.

Gartner survey of more than 220 CEOs in user organizations from more than 25 countries was conducted in November and December of 2011.

“Costs are now the second biggest priority area, the highest ranking in our surveys since 2009,” said Mark Raskino, vice president and Gartner fellow. “Yet, CEOs seem determined to maintain a growth posture as the number one priority for now, and geographic expansion is the primary growth approach.”

While the economy is certainly a concern for chief executives, the survey results showed by a ratio of more than two to one that CEOs said they will increase IT investment in 2012, rather than cut it.

“The intention to invest in technology is comparatively healthy,” said Jorge Lopez, Vice President and Distinguished Analyst at Gartner. “The newer trends, such as mobile and cloud, are rising to the foreground of CEO’s attention. However, CRM remains CEOs’ favorite IT capability because marketing is a never-ending competitive quest for customer retention.”

Gartner analysts said the difficulty with investing in newer technologies for strategic outcomes is that organizations need the right kinds of leadership and change management. Many business leaders learned the hard way in the 1990s and 2000s that simply buying and installing technology doesn’t deliver results if it is not carefully directed and delivered in conjunction with coordinated changes to policies, processes, organization, roles and culture.

“More purposeful, structured innovation management could be one way to make technology investments pay off,” Raskino said. “We see strong CEO intention toward improving it in most sectors, but not in financial services where, perhaps, regulatory compliance is simply overwhelming all other strategic change thinking.”