Study: CIOs cooperate better and expect to spend more

Studies predict IT spend will grow in moderately in 2005.

Business executives and IT departments are increasingly finding ways to put their differences aside when it comes to addressing the information technology needs of a company, according to a survey of chief information officers (CIOs) and business managers.

Furthermore, 56 percent of executives in the U.K and Ireland who were polled expect IT spending by their businesses to increase over the next three years, according to a survey released Monday by Accenture.

"In the past, a lot of money that was spend on IT was seen as going down a big black hole," said Accenture spokesman Andy Rowlands. "Now both sides see the need to be joined up if that money is to be spent effectively and, as a result, there is more cooperation now."

Rowlands credits part of that detente to the rise in many corporations of the role of the CIO, whose job it is to communicate IT with other senior executives.

The Accenture survey was carried out in December by the Bathwick Group and polled 307 senior business managers and IT executives in the U.K. and Ireland, Rowlands said. About half of the respondents were IT executives whose titles included CIO, vice president or director, while the other half were business managers whose titles included senior manager, vice president, director, division/department head and executive vice president.

The Accenture report is in line with other recent studies, including one from Gartner in January that found that CIOs expect to increase their IT budgets by about 2.5 percent in 2005. The Gartner study polled over 1,300 CIOs in about 30 countries.

Another study released on Monday by Research and Markets found that analysts expect moderate spending growth of between 4 percent and 8 percent this year in the worldwide technology market.

The growth will be driven by IT investments made in developing countries such as China, India and Brazil, followed by continued economic growth in Eastern Europe and Russia, Research and Markets said. The U.S. market is also expected to add to the 2005 IT growth figures, due in large part to spending by the government sector.

The Research and Markets survey found that CIOs are most likely to spend IT budgets on security, business intelligence software and storage. Additionally, CIOs are taking an interest in wireless technologies but remain cautious about emerging technologies such as VoIP (voice over Internet Protocol) and RFID (radio frequency identification).

As CIOs plot IT spending, they are also becoming progressively more effective at laying out their IT agendas to executives, and more sensitive to the issues of corporate politics, Rowlands said.

"Better use of IT" was cited in the Accenture study by 84 percent of business managers and 76 percent of IT managers as the primary reason for productivity gains in their companies over the past three years.

"Business executives are beginning to realize that the goals of the business need to match up with where the IT spend is going," Rowlands said. "For example, a retailer that is investing in its supply chain would need to make sure its IT systems, current and planned, could work with that goal."

When business and IT goals are not aligned, the IT projects that are approved are more likely to fail, Accenture said.

The study found that 35 percent of business managers and 27 percent of IT managers reported IT project failure rates of 41 percent to 70 percent. Of these executives, only 17 percent of all those surveyed said they consider alignment of business and IT goals in their companies to be "strong" or "totally aligned."

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