CIO IT budgets flat in 2012 say Gartner but...

It will be no surprise Gartner is reporting that CIO's believe their 2012 IT budgets will be flat. What's interesting is the way in which top business priorities match topics du jour.

It will be no surprise Gartner is reporting that CIO's believe their 2012 IT budgets will be flat. What's interesting is the way in which top business priorities match topics du jour. What is less clear is how top business priorities match top technology priorities?

Table 1

Top 10 CIO Business and Technology Priorities in 2012

Top 10 Business Priorities

Ranking

Top 10 Technology Priorities

Ranking

Increasing enterprise growth

1

Analytics and business intelligence

1

Attracting and retaining new customers

2

Mobile technologies

2

Reducing enterprise costs

3

Cloud computing (SaaS, IaaS, PaaS)

3

Creating new products and services (innovation)

4

Collaboration technologies (workflow)

4

Delivering operational results

5

Legacy modernization

5

Improving efficiency

6

IT management

6

Improving profitability (margins)

7

CRM

7

Attracting and retaining the workforce

8

ERP applications

8

Improving marketing and sales effectiveness

9

Security

9

Expanding into new markets and geographies

10

Virtualization

10

Source: Gartner Executive Programs (January 2012)

How for example does the fact you might have mobile technologies translate to 'attracting and retaining new customers?' Mobile shopping? Gartner explains:

"The 2012 Gartner CIO Agenda survey results show that CIOs believe that the customer experience is the greatest opportunity for IT-enabled innovation," said Dave Aron, vice president and Gartner Fellow. "As business executives see the potential of technology to transform customer channels and the customer experience, their view of technology has leapfrogged conventional ideas of IT."

And where does interest in cloud computing fit with any of the business priorities? Reducing enterprise cost perhaps? Gartner is silent.

There are other anomalies. 'Attracting and retaining the workforce' comes in at a lowly number 8 and yet there have been strong moves by both SAP (acquiring SuccessFactors) and Salesforce.com (acquiring Rypple) in those areas. Have SAP and Salesforce.com got it wrong? From everything I see, there is plenty of activity in the HR arena.

Collaboration, bracketed with workflow comes in at number four in technology priorities but no mention of social business, adopted as IBM's latest marketing buzzphrase. At least not in the tables:

"Mobility, social media, information and analytics can be used to re-imagine the customer experience, as well as sales and service channels. These technologies do more than automate or administer processes; they are the processes and the sources of value."

If nothing else, tech marketers and anal-ysts appear to have done a solid job getting CIOs on the social/mobile page.

The question that really needs answering is how those same CIOs are going to find the budget necessary to deliver on business priorities. One thought is that most of the technologies they say they need are relatively low cost or at the very least lower cost than on-premise alternatives (where they exist.) What if you could release say 1-2% of total budget through the use of third party maintenance for ERP? Or what about replacing non essential storage at EMCs Champagne pricing down to Amazon pricing? Curiously, Gartner are silent on where CIOs will find those budget tweaks despite the fact CIOs rate cost reduction as their number three business priority.

Endnote: Computer Economics reckons that IT pay rates will rise 1.8-3.0% implying more pressure on IT budgets.