CIO Lessons From Down Under

If you think enterprises in America have taken it on the chin in this economic turmoil, take a look "down under": CIOs in Australia and New Zealand have been hit by the same storm yet have succeeded in turning things around. Their actions may offer a blueprint for U.S. recovery.

While U.S. job growth in the tech sector is still not expected to revive until 2010, a new survey by IDC of 600 executives in Australia and New Zealand (a.k.a. ANZ) found that three out of four of those surveyed overcame their economic crisis by closely monitoring administration, operations, and information and communications technologies.

Granted, Australia's recession has been somewhat mild, compared to the rest of the world; the country's central bank raised its growth forecast for 2009 from 0.5 percent to 1.75 percent and raised estimates for growth in 2010 from 2.25 percent to 3.25 percent.

But that doesn't mean companies haven't had to roll with the punches. "Operation budgets of CIOs are experiencing a shift," says Adam Lee, IDC analyst and co-author of the report.

Hardware and software refreshes are stretched in the region, and a close watch is being placed on maintenance fees as they become significantly lower, Lee notes in the IDC report. At the same time, indicators of growth show network spend is up, and planning for internal and external staffing increased for ANZ organizations.

What's their secret?

ANZ enterprises have not focused directly on "disruptive technologies," such as SOA, SaaS, and convergence, but on rethinking operations, while examining tools for business transformation in light of the global economic crisis.

As a result, the top three ANZ CIO priorities in 2009, according to IDC's report, are: reducing costs (chosen by 27.6 percent of 600 respondents); recruiting and retaining staff (10.3 percent); and meeting users' expectations (10.2 percent).

And, according to ANZ executives, their top three areas of Internet-related investment over the next 12 months will be (again, indicated by percentage of respondents surveyed):

• Systems infrastructure (security, storage, network, middleware, etc.) -- 18.6 percent,
• Enterprise Resource Management (ERM) -- 16.1 percent
• Customer Relationship Management (CRM) -- 14.7 percent

The CIOs' operational focus is reflected in changes to their job descriptions, say the report's authors. Just over half of Aussie CIOs now report to CEOs, while the rest are split between reporting to their COOs and CFOs. Contrast this to last year's survey, IDC reports, as 78 percent were reporting to CEOs and only 5 percent to CFOs.

"Moving forward, this disruption and change equals opportunity for the CIO -- an opportunity to review IT systems; staff setup and knowledge; products and services offered; to look at vertical market opportunities and to capitalize on competitive strengths," concludes IDC analyst and report co-author Melissa Martin.

The IDC report actually complements a study released this year by IBM Corp. (NYSE: IBM) of more than 2,500 organizations worldwide. That report's findings also reveal changes to the CIO's job: 55 percent of surveyed CIOs' time is now spent coming up with new innovations, implementing new technologies, and managing non-technology business issues.

According to the IBM report: "The remaining 45 percent is spent on essential, more traditional CIO tasks related to managing the ongoing technology environment. This includes reducing IT costs, mitigating enterprise risks and leveraging automation to reduce costs elsewhere in the business."

Both studies show the increased importance to CIOs of controlling and monitoring operations and costs. That shifting dynamic has been marked in the ANZ region, and it is certainly pushing CIOs to re-examine their roles.

— Michael Singer, Senior Editor, Internet Evolution. His focus includes executive issues... What's top of mind for CEOs, CIOs, and CTOs?