Gartner challenges CIO beliefs

by CXOtoday staff    Nov 22, 2011

According to Gartner, as organizations grapple with continued global economic turbulence, CIOs need to uncouple from past processes and beliefs and embrace a new manifesto.

“The time really has come to challenge some of the most commonly held IT organization, operations and leadership beliefs,” said Partha Iyengar, Vice President and Distinguished Analyst at Gartner.

At the Gartner Symposium/ITxpo, taking place in Mumbai, Gartner analysts have identified four key principles for a new CIO Manifesto that they said will not just change CIOs and their departments for the better, but benefit entire enterprises as well.

The four key principles of the CIO manifesto include:

Information is just as important, if not more important than information technology

As enterprises generate an unprecedented amount of information of enormous variety and complexity, they need to leverage this data for greater business value. This is leading to a change in data management strategies known as big data.

According to Gartner, this creates a Pattern-Based Strategy architecture that seeks signals in the information, models them for their impact, and then adapts to the business process of the organization.

By 2016 more than 50 percent of annual CIO project spending will be directed toward measurably improving the financial conditions of an enterprise.
All too often CIOs and IT practitioners simply cannot quantify the business value that information and IT delivers to an enterprise. It is doubtful that the financial benefits of a large percentage of new IT projects could be audited and measured for the financial benefit they have brought to an enterprise.

By 2020 more than 50 percent of all enterprise information and IT spending will directly support revenue-generating rather than expense-related business processes.
Most IT applications in the past few decades have primarily supported business processes related to the expense side of an income statement. CEO survey results point to the high priority of organic business growth. CIOs must lead their staffs to identify how information and IT can foster organic revenue growth of existing and/or new products and services.

The incentive portion of CIO compensation will be derived from the amount of money created by the efforts of CIOs and their staffs.
CIOs who want a permanent place at strategic planning tables must be willing to take on the same types of risk-reward compensation scenarios crafted for the CEO, head of sales and other senior executives. CIOs who can convert information into new savings and new revenue and IT into cost savings will have little difficulty with such a compensation scenario.

Iyengar said that becoming a ‘money-making CIO’ requires challenging the efficacy of all current IT business practices, and CIOs really need to take control of the purse strings. “For the next two years, business-initiated requests for new IT projects should only be undertaken if they yield measurable and auditable financial benefits for the enterprise.”

He added that since this will demand more from IT organizations than just cutting costs, it is clearly time for CIOs to embrace a new CIO manifesto that will declare how generating revenue must become a new and central component of their IT organization’s mission for the rest of this decade and beyond.