Today¶s CIOs and information technology (IT) directors face many increasing challenges. For years,their focus has been on keeping down the cost of operations. While this remains an expectation,complex and often competing requirements are emerging that are making their jobs more difficult:regulatory and compliance needs, systems security, development of new systems for businessoperations, reduced spending budgets, maintenance and enhancement of legacy systems, and retaininga mix of expensive staff operations. IT must expand upon its traditional foundation to be able to supportthese requirements.Based on both research and experience, Capgemini has identified three top objectives for the CIO andIT:
Align IT and business strategy.
Match IT resources and investment to overall corporatedirection.
Manage IT costs.
Maximize the value of IT department resources and adhere to budget.
Provide for business agility.
Enable all levels of the business to react quickly and nimbly to both internal and external events.In reviewing these priorities, a conflict becomes evident. Namely, the goals of aligning IT with business strategy and supporting business agility are complicated by the requirement to optimize costs.The IT budget is growing very slowly, new expectations are growing exponentially, and the legacyenvironment continues to consume almost 80 percent of the budget, leaving only 20 percent to addressthe critical growth that the business demands.
IT needs a strategy for using that 20 percent effectively, while developing tactical solutions that supportthe strategy of gaining control and improving alignment and agility between business and IT.Improving business productivity is a top priority, especially for the information worker. Here businesses can fully realize the benefits of business and IT working together.Controlling costs and increasing responsiveness are often mutually exclusive tasks, so IT should break down its imperatives to specific undertakings. The first imperative can be termed "cost and risk," whichinvolves two components: purchasing cost-effective business-enabling capabilities; and managing asecure, unified infrastructure that reduces risk and lowers operational costs. The contrasting imperative,responsiveness, also has two components: expanding the value of existing assets to allow extended useof line-of-business applications; and expanding user self-service in an IT-controlled environment toallow IT to spend time responding to higher impact needs. One further imperative is businessalignment: aligning IT goals with business goals to implement the new capabilities that are required tosupport business-driven value propositions. (See Figure 1.)
In order to make business more agile and to align IT with business, the CIO must address thestrategy of business productivity without losing productivity within the IT department.
This is adiscouraging task, given the CIO¶s situation of having to do more (increasing security and managementneeds, increasing requirements to extend legacy systems, deliver on strategic business initiatives andsimplify growingly complex infrastructure systems) with less (reduced IT budgets). But by enabling business productivity properly, IT productivity can actually increase.
"Companies expect to spend 80% ² up from 2005¶s 76% ² of their overall IT spending to keep existing operations and maintenance in play,leaving only 20% for new development activity and project work." ("CIOs Must Target Legacy Applications With A Maintenance Renaissance,"Phil Murphy, Forrester, June 22, 2006)