Sceptical boardrooms fed up with underperforming IT departments are set to make 2005 a tough year for senior IT managers with increased pressure to cut costs and deliver tangible benefits, according to a new survey.
The second annual ICT spend survey sponsored by Telewest Business and carried out by the Economist Intelligence Unit found that the climate for IT investment remains cautious, with 57 per cent of respondents saying IT budgets will be cut or stay the same as last year.
CIOs, CEOs, CFOs and senior managers in 125 private and public sector organisations in the UK were polled for the survey, which showed a disparity between how CEOs and CIOs see their IT departments.
Almost two-thirds (63 percent) of CEOs said their IT "underperforms" compared to 39 percent of CIOs. A third of respondents also said their ICT networks are not cost effective or easy to use.
In response, 41 percent of CIOs said that business requirements change faster than the IT department can respond.
Cost-cutting remains a top priority for many CIOs in 2005 but the survey found risk management, related to compliance legislation, and customer service projects have risen up the agenda.
The trend towards outsourcing remains strong, particularly in the public sector with almost a fifth (19 percent) saying that at least a half of their ICT infrastructure will managed by a third party over the next two years.
Gareth Lofthouse, European director for executive services at the Economist Intelligence Unit, said the climate remains cautious and that CFOs continue to exert a tight grip on IT spending.
"I do not think there has ever been a more challenging time for the CIO. There is a more sceptical view of IT [from the boardroom]. The challenge for CIOs is how to demonstrate that IT delivers value to the business."
Christopher Small, director of public sector at Telewest Business, said part of the problem is that strategy decisions in many organisations are still made above the CIO or IT director's head.
"IT is still seen as a cost centre and not an enabler," he said.