CIOs face new cost and risk challenges as growth returns in 2010

The analyst believes that as this changes the way trust is established, risk assessed and reputations are maintained, CIOs are going to find themselves in the firing line. Barbara Gomolski, managing vice president at Gartner, says the 'mend and make do' approach that has allowed companies to survive the last 12 months will continue. However, it will not be business as usual. "This year, IT leaders need a new type of budget, a rolling forecast that supports the return to growth," she warns. "IT organisations need a budget that gives them the flexibility to respond to the changes that they know are going to come, and those that they cannot yet identify." And Brian Gammage, vice president and Gartner fellow, adds: "The pressure to improve efficiency and productivity will increase dramatically. If growth is faster, IT leaders will need radically new capabilities. The growth trajectory they follow will be determined by their ability to free up the resources to fund these." For Gartner, the emphasis should be on controlling application portfolios and recognising the implications of living in a digitally-enabled and socially connected world. "Business users who go out and acquire applications are not thinking of the long-term consequences of their decision," comments Andy Kyte, vice president and Gartner fellow. "Our research shows that when you own an application for 15 years, the cost to go live is, on average, 8% of the total lifetime cost of ownership. Who is responsible for making sure you get the best possible value from the other 92% of those costs?" Kyte asserts that the existing application portfolio needs to be rationalised and simplified. "This can be done by decommissioning and retiring solutions that are no longer delivering acceptable ROA, so that you can divert resources to where they're really needed," he insists. "So prioritising your budget initiatives by using project portfolio management to create a balanced investment portfolio is even more important now than it has ever been," adds Kyte. As for the digital world, "social media instantiates the real relationships that exist in the organisation and it uncovers the people most important to organisational performance," according to Carol Rozwell, vice president and distinguished analyst at Gartner. "IT leaders can use social software to identify and examine the social networks at work in your organisation," she explains. "They can use it to make sure they understand who their key performers are, and to look for people who have expertise that they may not be utilizing effectively."