ROI is really burning chief information officers

CIOs are really feeling the heat, suffering workload stress and increasing pressure to deliver ROI.

Contributing to this stress is the view from business executives that IT simply contributes to the operational efficiency of an organization and little more, according to IDC Australia user programs manager Peter Hind.

Speaking at the IDC Directions conference, Hind said CIOs have reached the conclusion that business just want IT to be there, on, and available. But if IT isn't on and available, he said, all hell breaks loose.

"Turn off a corporate e-mail system for 30 nanoseconds and see how many people suddenly pay attention to IT," Hind said. While greater flexibility in the IT budget should be empowering CIOs, Hind said the reality is that ROI timeframes on investment are actually shrinking - counteracting budgetary gains.

Another contributing factor is lines of reporting. Hind said the ability of a CIO to undertake his duties is often determined by whether he or she reports to the CEO or CFO.

“If you report to the CFO there tends to be a cost containment mentality towards IT. However, if you report to the CEO there’s usually more dialogue between the two and that should be encouraging,” he said.

South Australia Department of Admin and Information Services technical support manager Paul Matas agreed with Hind. When it comes to spending, Matas said, there is a lot of justifying to be done.

“We find ourselves fighting this perception that IT is a black hole where you can throw heaps of money into it, but it’s difficult to get anything back,” Matas said.

Fortunately, he said, there are executives that understand IT's contribution to the organization "which makes things easier for us".

Rider Hunt Melbourne IT manager Jeanette Clough definitely feels the pressure to deliver a better return on IT investments today.

“These days organizations are constantly trying to do more with IT, but spending less,” Clough said.

At Rider Hunt Melbourne, IT is viewed as a service according to Clough, and not in the same category as some of the departments that are considered more creative within the organization.

She scoffed at Hind's suggestion that there is greater flexibility in IT budgets.

“Certainly, there’s a more diverse range of things to spend money on, but there’s not more money to be spending on IT,” Clough said.

Cutting costs

Reducing costs remains the biggest challenge facing CIOs today and has been the number one priority for the past three years, according to IDC research.

The annual survey, Forecast for Management for Australian and New Zealand IT departments, identified the top 10 challenges on the CIO menu, which IDC Australia user programs manager Peter Hind addressed at the IDC Directions conference.

According to Hind, cost containment is still number one, in stark contrast to 1996 when it came in at number five.

“The challenge is, how do you cut cost without cutting quality? Sometimes IT people have to make those tough decisions,” Hind said.

Also topping the list: aligning IT to business, meeting user expectations and change management followed by system integration and the need to reskill IT staff.

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