Gartner Survey: CIOs in Australia and New Zealand Report Budgets up by 3.3 Percent in 2010

With CIOs’ budgets only slightly increased over 2009 levels, CIOs in Australia and New Zealand are turning to new strategies and starting to look at new ‘lighter weight’ technologies in order to deliver results for their organisation, according to the Gartner Executive Programs (EXP) 2010 CIO Agenda survey.

Gartner EXP’s latest annual survey of 1,586 CIOs worldwide, including 67 from Australia and New Zealand, was conducted in December 2009 and represents CIO budget plans reported at that time.

While a smaller percentage (33 percent) of ANZ CIOs reported a budget increase compared to 38 percent of CIOs globally, only 10 percent reported that their budget would decrease from 2009 levels, compared to 22 percent globally. The net effect of this was an average increase of 3.3 percent reported by CIOs in ANZ, slightly better than the nominal 1.3 percent worldwide average. There is an almost even split between internal and external spending, with ANZ CIOs reporting that 48 percent of their budget is spent externally and 52 percent internally.

According to Linda Price, group vice president, Asia Pacific for Gartner Executive Programs, 2009 was the most challenging year for IT since the Gartner survey began in 1999.

“As many ANZ organisations operate on a July to June financial year, we think this represents a conservative view, and 2010 may shape up to be much better than this,” said Ms Price. “Last year, many CIOs faced multiple budget cuts wiping away four years of budget increases. Some IT budgets have not returned to 2005 levels, let alone 2008 levels. However there are definite signs of recovery in the 2010 budget projections.”

CIOs in Australia and New Zealand were considerably more optimistic about economic recovery than others around the world, with 54 percent saying that they expected the economy to recover and grow compared to 2009 levels but not reach 2008 levels of growth, compared with 32 percent globally. Only 28 percent of local CIOs expected continued economic challenges similar to 2009 in 2010, compared to 41 percent of CIOs globally.

“2009 was an extremely challenging year for local CIOs in the corporate and public sectors as they faced organizational change and increased demand for services with reduced resources,” said Ms Price. “This is set to change in 2010, as the economy transitions from recession to recovery and enterprises transition their strategies from cost-cutting to productivity.”

Ms Price said that while global CIOs are transitioning from “heavy” owner-operated solutions to “lighter-weight” services, ANZ CIOs are showing interest in the technology but few are using it.

“Another area of divergence from the global trend is the ranking of web 2.0 in the list of technology priorities. Although many are interested and most understand its inevitable ubiquity, most CIOs in this region are still grappling with the use of web 2.0 technologies in the business environment and what policies should govern its application.”

“CIOs see 2010 as an opportunity to reposition themselves and accelerate IT’s transition from a support function to strategic contributor focused on innovation and competitive advantage. They have aspired to this shift for years, but economic, strategic and technological changes have only recently made it feasible.”

Top 10 Business and Technology Priorities

Business expectations are shifting from a focus on cost-based efficiencies, to achieving better results based on enterprise and IT productivity. The business and technology priorities of CIOs in Australia and New Zealand are strongly aligned with their global counterparts, with a few small differences.

Innovation, or creating new products and services, has shot up the list of business priorities to number three in Australia and New Zealand, but only appeared at number 7 worldwide. It did not appear on the ANZ priority list at all in 2009.  Last year, ‘Managing enterprise change’ was number 7 on the list of business priorities for ANZ CIOs, but it does not appear at all this year. However, for global CIOs this is still a business priority, coming in a number 6 on the list.

When CIOs were asked to look out to 2013 and rank what their business priorities would be, sustainability issues again appeared on the agenda, with ANZ CIOs ranking ‘managing your environmental impact’ as number 8 on the list of business priorities. It did not appear on the list of expected business priorities for global CIOS in 2013.

Top 10 Business Priorities	ANZ Rank	Global Rank
Improving business processes	1	1
Cutting enterprise costs	2	2
Creating new products or services (innovation)	3	7
Increasing the use of information and analytics in decision making	4	3
Attracting and retaining new customers	5	5
Supporting regulation, reporting and compliance requirements	6	-
Improving enterprise workforce effectiveness	7	4
Targeting customers and markets more effectively	8	8
Expanding current customer relationships (expanding ‘wallet share’)	9	10
Consolidating business operations	10	9

After four years at the top of the technology priority list for ANZ CIOS, business intelligence (BI) applications slipped to the number 7 spot. However, this seems to conflict with the business priority ranked fourth, which was ‘Increasing the use of information and analytics in decision making’.

“This may be a terminology issue,” said Ms. Price. “Negative publicity about failed BI projects may have tainted its image, but getting the most out of enterprise information remains a top priority for every CIO as they look to deliver value to their business.”

While security appears at number 8 on the global list of priorities, it does not appear on the top ten list for CIOs in ANZ. Gartner believes this reflects the local CIO view that security is something that both the business and technical staff must manage, rather than something the CIO must be actively involved in. Meanwhile, mobile applications and devices came in at number 9 for ANZ CIOs but did not make the global list.

Top 10 Technology Priorities	ANZ Rank	Global Rank
Virtualisation	1	1
Networking, voice and data (including VoIP)	2	4
Data storage and management	3	7
Mobility	4	6
Cloud computing	5	2
Web 2.0	6	3
Business intelligence applications	7	5
E-commerce/Internet	8	-
Enterprise Applications	9	-
IT Management	10	10

Source: Gartner Executive Programs (2010)

The CIO role in Australia and New Zealand

Reporting lines in Australia are similar to the global averages. 35 percent of ANZ CIOs report directly to the CEO, only slightly less than the global average of 38 percent. Around the same proportion (25 percent) report to the CFO (26 percent globally) and 24 percent report to a chief operating officer (CFO) compared to 20 percent globally. The remaining 15 percent of Australian CIOs report to another role within their organisation.

The average tenure of CIOs in Australia and New Zealand at 4 years is slightly lower than the global average of 4.5 years.

More change is ahead for ANZ CIOs. Looking ahead to 2013, CIOs say that their top business priority will be ‘managing enterprise change’.

About the 2010 CIO Agenda Survey

This year’s Gartner EXP CIO report “Leading in Times of Transition: The 2010 CIO Agenda” represents the most comprehensive examination of business priorities and CIO strategies. The CIOs surveyed represent more than US$126 billion in corporate and public-sector IT spending in 41 countries and 27 industries. Gartner Executive Programs uses this research to establish the CIO agenda for research, tools, workshops and action plans.

About Gartner EXP

Gartner Executive Programs (EXP) is a membership-based organisation of more than 3,700 CIOs worldwide. Members benefit from the convenience of a single source of knowledge, one-to-one counsel, personalised service, the shared knowledge of the world's largest community of CIOs, and the assurance of Gartner objectivity and insight to help them and their organisation. Additional information about Gartner EXP can be found on the Gartner Web site at www.gartner.com/exp.

About Gartner

Gartner, Inc. (NYSE: IT) is the world's leading information technology research and advisory company. Gartner delivers the technology-related insight necessary for its clients to make the right decisions, every day. From CIOs and senior IT leaders in corporations and government agencies, to business leaders in high-tech and telecom enterprises and professional services firms, to technology investors, Gartner is the indispensable partner to 60,000 clients in 10,000 distinct organizations. Through the resources of Gartner Research, Gartner Executive Programs, Gartner Consulting and Gartner Events, Gartner works with every client to research, analyze and interpret the business of IT within the context of their individual role. Founded in 1979, Gartner is headquartered in Stamford, Connecticut, U.S.A., and has 4,000 associates, including 1,200 research analysts and consultants in 80 countries. For more information, visit www.gartner.com.

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