Most CIOs say their IT organizations have the funding and organizational elasticity needed by their businesses this year, according to a survey of 1,400 IT leaders published by Gartner this week.
It's CIOs' lack of involvement with corporate executives in setting strategy -- and a shortage of business skills -- that are constraining IT departments, according to the research firm.
Gartner Executive Programs conducted a worldwide survey of more than 1,400 CIOs and found that 61 percent of respondents feel they have the money necessary to meet their 2007 commitments; 58 percent said their IT organizations have the right mix of technical and organizational flexibility to get the job done.
Although some individual IT departments might be cash-strapped or have technical skills gaps, "it's not true of the majority," said Mark McDonald, group vice president at Gartner EXP in the US.
Instead, many CIOs are hard-pressed to find and retain enough IT staffers with sufficient business savvy.
"The predominant skills missing are business skills," he said, adding that 63 percent of the CIOs surveyed by Gartner between September and December 2006 didn't feel their IT staffs had the right mix or number of skills.
According to the Gartner study, there's a strong correlation between companies that use IT for competitive advantage and CIOs who work closely with CEOs and other business executives in setting corporate strategies.
CIOs who participated in the study cited four areas they need to focus on most to bolster the performance of their IT organizations over the next three years: business process improvement, enterprise architecture, business relationship management and business intelligence.
For their IT departments to make improvements in these areas, CIOs need to stop worrying so much about aligning IT with the business and focus more on effectively managing the expectations that business leaders have for the IT organization, said McDonald.
In addition, while many CIOs have helped their business peers make business process improvements within their divisions through various business/IT projects, it's an area that often goes neglected in the IT department itself.
Another area that CIOs have overlooked is the pending retirement of baby boomer IT workers, said McDonald.
"It's something that everyone knows is going to come, but few people are taking proactive steps to address," he said.
According to the study, 86 percent of CIOs see innovation as critical to their companies' success, yet only 26 percent believe that their current level of innovation is good enough to meet their goals.
The disconnect here, according to McDonald, are the cultural barriers and institutional mindset that often thwarts innovation.
"If you believe your culture prohibits you from being innovative, then it's true," said McDonald.
However, he sees a tremendous opportunity for CIOs, since they're in a position to help deliver the kind of information their organizations need to drive innovation.
In the Gartner study, 47 percent of the respondents are based in North America, while 39 percent are located in Europe, 10 percent are in Asia/Pacific countries and 4 percent are in Latin America.
The study found that IT budgets this year are expected to rise 3.44 percent in the U.S. and 3 percent internationally.