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Smart Enterprise: Greater Expectations

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Pacific Coast has UC in place for 70 percent of its operations, O'Dell says. The exception: a few small lumberyards where it doesn't make sense to use the technology. Among the benefits it affords is the ability to easily locate co-workers, cost reductions and less network downtime. At PG&E, the deployment of mobile technology into the field is a big priority. For example, the company is equipping all service vehicles with new laptops so technicians can better serve custom- ers by having easier access to account information. The utility also is planning to leverage mobile devices used by customers, for instance by texting or e-mailing updates about outages or power restoration. For a moderate number of organizations, it appears there will be increased budget for these and other initiatives. Only about one- quarter (27%) of the executives surveyed say IT spending will be flat this year compared with 2009. But half of all the executives say they expect increases in spending, while only 23 percent expect decreases. Fourteen percent say IT spending will go up by more than 10 percent this year, compared with 2009, while another 21 percent say budgets will be up between 5 and 10 percent. Overall, half (50%) say their budgets are on the upswing. That doesn't mean the effects of the tail end of the recession aren't still being felt by IT executives. While 25 percent of executives say concerns about the economy have not affected their IT budget or spending plans, the rest (75%) — including those who are seeing budget increases — say there has been some impact, such as having to cut specific projects or not increase spending on IT as much as they had planned. Many companies have had to be more discerning about how they allocate their technology budgets and add staff, for example. "Our industry is not heavily correlated to the economy, so we have not seen major changes in budgets," Meyers says. "That said, we are definitely [making more careful choices] about what new head count to create, and [we] continue to strive to bring down the costs of operations so we can reinvest in projects." Gray says IT has been somewhat lucky in that a great deal of fat was cut in the wake of a crisis in the early 2000s, and IT leaders became quite effective at cutting costs through the use of tech- nology. "Usually CIOs who are not being asked to cut budgets are the ones that effectively demonstrate IT's value, and can reliably predict a return on a corporate investment in IT. [Therefore], fund- ing questions become more about which investment to choose than, 'How can we cut another three percent from the IT budget?'" During challenging times, the best way to save money is by streamlining operations and redeploying existing staff to meet additional business requirements, Davis says. "This will keep your business process lean and provide growth without additional staffing." It also prepares the IT department for major software upgrades when the funding for those projects is released, he says. As for Bowdoin's IT spending outlook, Davis says, "I think if all goes reasonably well over this next year, larger projects will be approved." For many companies, growth plans for 2010 call for increased investment in new application development and infrastructure upgrades (servers, PCs, etc.). Only 12 percent say they plan to scale back application development spending, and just nine percent will invest less money in IT infrastructure this year. Half of the executives expecting an increase in company revenue for 2010 say their organizations are increasing the number of IT projects intended to drive or support revenue growth, compared with a year ago. A mere 12 percent say their organizations are decreas- ing the number of growth-oriented IT projects or have virtually no growth-oriented projects in the works. The way IT goes about contributing to business and revenue growth is shifting somewhat from past growth periods, according to the survey. For example, many organizations (38%) plan to use more contract IT talent, rather than hire full-time employees. A number of companies also plan to centralize their IT resources as they expand (35%), use more SaaS (31%), and use more on-demand infrastructure offerings such as cloud-based CPUs and storage (29%). "SaaS is a clear growth trend," Murphy says. "But beyond that, a lot of the cloud work is pilot testing; there's lots of tire-kicking." Even those cloud services that CIOs say they will be utilizing more frequently, such as cloud-based CPU and storage, won't see full capitalization for another year or so, he says. Clearly there's lots of change in store, as economic conditions continue to improve, and IT executives help lead their organizations into new opportunities for growth. ■ BOB VIOLINO is a freelance writer in Massapequa Park, N.Y. He covers a variety of business and technology topics. Recipe for Growth How would you characterize your organization's IT plans this year, in terms of projects intended to drive or support revenue growth? DATA: InformationWeek Analytics, "Return to Growth: 2010 Global CIO Report," survey of U.S. IT executives, May 2010 SURVEY BASE: 228 respondents who predict their organizations' revenue will increase in 2010 About the Survey For its study, the "Return to Growth: 2010 Global CIO Report," InformationWeek Analytics surveyed 333 U.S.-based senior IT executives. The study was conducted online, and respondents were recruited through an e-mail invitation with an embedded link to the survey. All of the survey respondents work at orga- nizations with customers, suppliers and/or business operations in more than one country. Job titles of the survey respondents include CIO, CTO, Executive VP and Senior VP of IT. Companies represented by the respondents include both large enterprises and SMBs in industries that include banking, manufacturing, consulting and business services, and healthcare. ■ INVESTING; rising number of growth-oriented projects compared with a year ago ■ STEADY STATE; the same number of growth-oriented projects compared with a year ago ■ CONTRACTING; declining number of growth-oriented projects compared with a year ago ■ FROZEN; virtually no growth- oriented projects in the works 50% 38% 8% 4% 36 SMARTENTERPRISEMAG.COM 36 SMARTENTERPRISEMAG.COM

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