IT warning: Turbulence ahead

The technology budget is on the skids. The business types don't quite get IT (and by the way you don't get them either). And amid all this turmoil all you have to do is keep your infrastructure humming and solve the 25 most contentious business-technology issues by the first half of 2009.

Boy those Gartner folks can paint quite a picture.

The opening scenes at the Gartner Symposium ITxpo in Orlando are a touch gloomy. Think cost cutting, a Wall Street shellacking, vendors vs. customers and struggles to innovate amid this mess of an economy.

Gartner analysts Ken McGee and Dale Kutnick set the scene.

Meanwhile, CEOs are moderately confident, but the Wall Street fiasco has probably tempered that view. Gartner's statistics on CEO confidence were dated given recent economic events (bailouts, bank failures, the Dow etc).

Add it up and your average technology budget isn't beating inflation. The figures below are based on Gartner's survey of 1,498 CIOs representing $132 billion in IT spending.

There are a few caveats: Companies that are aiming for what Gartner calls "distinctive IT" are spending more, but overall budgets are anemic. But here's the problem: Business is expecting more. In fact, McGee and Kutnick argue that the most contentious issue in 2008 is that business expectations for information technology have outstripped the internal ability to deliver.

From the Gartner presentation:

At least four years ago, we started noticing a growing desire by enterprise executives to have their IT organizations increase their external focus on customers, new products and services, new geographies and business processes. Unfortunately, most CIOs recognize their staffs do not possess the correct skill sets to adequately meet these externally focused demands. As a result, the CIO's side of the debate on this issue maintains that to meet the new demands on IT, additional funding will be required to hire the "right" people. On the other end of this debate, executives are dismissing the plea for additional funding and instead are recommending the CIOs transform their staff to meet the new needs.

That expectations gap is just the first friction point for IT. Here's a look at a few of the looming issues highlighted:

• How do you modernize IT and cut costs? The upshot: Pick projects that modernize and pay for themselves. Think virtualization.
• Spreading the responsibility for security and risk assessment. IT is the fall guy for information security, but there's usually more than enough blame to go around. Gartner argues that technology managers want business folks to lay out how much risk they are willing to bear for any initiative. The problem: Businesspeople don't want the burden and sure aren't going to deliver a hard risk metric.
• Everyone wants business intelligence, but no one wants responsibility for it. This take from Gartner was a bit surprising, but CIOs are reporting that there's a big business intelligence disconnect. Among the problems is a lack of vision, data integrity, a common vocabulary between groups and lack of sponsorship.
• When do you modernize your applications? Believe it or not many critical systems still run on COBOL code that was cooked up decades ago. When and how you move off of those systems to something like a services oriented architecture will induce migraines in the near future.
• And finally there's a looming vendor-customer battle ahead. We're already seeing this with the SAP pricing flap and Oracle's near gloating about its ability to boost margins on maintenance increases.

McGhee and Kutnick argue that vendor management is becoming a critical issue. Vendors say they are meeting whatever contract was signed and customers complain the supplier isn't doing enough to deliver innovation. In other words, there's a big disconnect between the sales pitch and what is actually delivered.