Tuesday, December 15, 2009

Survey Shows 62% of CEOs See IT Having a Key Role in Post-Recession Strategy

Sixty-two percent of CEOs recognize that IT-enabled changes will be a key element in their post-recession strategy, while only 13 percent disagree, according to a recent survey by Gartner, Inc. Preliminary results from the survey show 42 percent of business leaders are already focusing more on revenue growth than cost control.

In the third quarter of 2009, Gartner conducted a targeted web-based survey of 190 senior business executives, 81 of whom were CEOs, which probed their views and priorities for 2010 and beyond. It examined companies in the US and UK with annual revenues of more than $1 billion and specifically excluded technology service providers and government.

In 2009, CEOs initially placed cost cutting at the top of their priorities to cope with the sudden and severe recession. In 2010, the focus for 71 percent of business leaders is a return to revenue growth.

Twenty-nine percent of business leaders expect to see a return to revenue growth as their primary focus in 2010. Only 10 percent do not expect revenue growth to be their primary driver until beyond 2011.

Similarly, business leaders’ investment attitude towards IT is reasonably positive. In addition to the 43 percent of respondents who will increase IT investment level, 45 percent will keep the same IT investment level, while only 13 per cent of business leaders will decrease IT investment level.

CEOs and business executives are also changing the order of their priorities in 2010. In particular, they are making customer focus the top priority for 2010, with 85 percent of respondents reporting that retaining and enhancing their existing customer bases will be their top priority next year. Also, attracting and retaining skilled talent rose to the No. 3 priority, while reducing costs has become less important, falling from the No. 1 priority in 2009 to the No. 5 priority for 2010. This latter trend is also reflected in their views on the capabilities that IT can bring to the business. They recognize IT’s contribution to business performance beyond managing costs and that it has a role to play in processes, flexible working, decision making and legal support.

Although business leaders will start to drive through an economic recovery next year, very few anticipate a return to the way things worked in 2007 and certainly do not expect the pace of business to be as rapid. The survey found that CEOs and business executives expect only low business-activity growth in 2010. When asked about their expected changes in core production or service activity volumes in 2010, 20 per cent of respondents expect no change, 49 percent expect an increase, but 31 percent expect a decrease. Of those who do expect volume growth, 50 percent predict it will be less than 5 per cent and more than three quarters foresee it will be below 10 percent.

More information on the IT industry can be found at www.SupportIndustry.com

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