Re-Imagining IT: the 2011 CIO Agenda Focus on North America

Re-Imagining IT: the 2011 CIO Agenda Focus on North America Higher Education Mark P. McDonald Ph.D. Group Vice President, Gartner Fellow Blog: http://blogs.gartner.com/mark mcdonald/

In 2010, CIOs recognized that IT has to change as conditions move toward recovery 2011 CIO Survey All CIOs 2

2011 Gartner Executive Programs CIO Survey 2011 CIO Survey The largest of its kind in the industry - Covering more than 2,014 CIOs - More than 44 countries and all major industries - Representing more than 161 billion dollars in IT budgets Addresses issues including: - IT budget and portfolios - CIO priorities for 2011 and 2014 - Enterprise Environment - CIO Role Used by Executive Programs to establish the CIO agenda for research, tools, workshops and action plans. 3

The CIO Survey custom analysis contents IT Budget Changes and Spending CIO priorities for 2011 and 2014 Enterprise Environment CIO Role 4 2011 CIO Survey

The CIO Survey custom analysis contents IT Budget Changes and Spending - Average IT budget changes CIO priorities for 2011 and 2014 Enterprise Environment CIO Role 5 2011 CIO Survey

IT Budget Growth (weighted average) Higher Education North America vs. All CIOs 2011 CIO Survey IT Budget Changes 2011 Weighted Average 0.4% Average Change 0.9% 30% 40% Increasing Flat 59% 44% Decreasing 16% 11% 1 Industries, 2 Countries All CIOs Note: The weighted budget average considers the size of the budget, changes in larger budgets have a larger affect on the weighted number. 6

IT Budget Growth (un-weighted average) Higher Education North America vs. All CIOs 2011 CIO Survey IT Budget Changes 2011 Un-Weighted Average 1.5% Average Change 3.9% 30% 40% Increasing Flat 59% 44% 16% 11% 1 Industries, 2 Countries All CIOs Note: The un-w eighted average is the average budget change for each com pany w ithout regard to budget size. 7 Decreasing

The CIO Survey custom analysis contents IT Budget Changes and Spending CIO priorities for 2011 and 2014 - Business Priorities - CIO Strategies - Sources of Success and Influence - CIO Technologies - Infrastructure and Application Moves Enterprise Environment CIO Role 8 2011 CIO Survey

2011 Top 10 Business Priorities Higher Education North America 2011 CIO Survey Top 10 Business Priorities 2011 Please indicate the top three business priorities for your enterprise/business unit in 2011 Increasing enterprise grow th 1 Attracting and retaining new customers 2 Improving technical infrastructure 3 Improving business processes 4 Reducing enterprise costs 5 Improving business continuity, risk and security 6 Creating new products, services and innovation 7 Implementing and updating business applications 8 Increasing management control 9 Attracting and retaining the w orkforce 10 Note: In the survey respondents identified their top three issues (not in any order). These priorities are ordered based on the percentage of respondents that included the issue in their top three. 9

2011 Top 10 Business Priorities All CIOs 2011 CIO Survey Top 10 Business Priorities 2011 Please indicate the top three business priorities for your enterprise/business unit in 2011 Increasing enterprise grow th 1 Attracting and retaining new customers 2 Reducing enterprise costs 3 Creating new products, services and innovation 4 Improving business processes 5 Implementing and updating business applications 6 Improving technical infrastructure 7 Improving enterprise efficiency 8 Improving operations 9 Improving business continuity, risk and security 10 Note: In the survey respondents identified their top three issues (not in any order). These priorities are ordered based on the percentage of respondents that included the issue in their top three. 10

2014 Top 10 Business Priorities Higher Education North America 2011 CIO Survey Top 10 Business Priorities 2014 Please indicate the top three business priorities for your enterprise/business unit in 2014 Improving operations 1 Increasing enterprise grow th 2 Attracting and retaining new customers 3 Attracting and retaining the w orkforce 4 Introducing, improving business channels 5 Improving technical infrastructure 6 Creating new products, services and innovation 7 Improving enterprise facilities & equipment 8 Migrating to cloud services 9 Improving business continuity, risk and security 10 Note: In the survey respondents identified their top three issues (not in any order). These priorities are ordered based on the percentage of respondents that included the issue in their top three. 11

2014 Top 10 Business Priorities All CIOs 2011 CIO Survey Top 10 Business Priorities 2014 Please indicate the top three business priorities for your enterprise/business unit in 2014 Increasing enterprise grow th 1 Improving operations 2 Attracting and retaining new customers 3 Creating new products, services and innovation 4 Expanding into new markets and geographies 5 Reducing enterprise costs 6 Improving technical infrastructure 7 Attracting and retaining the w orkforce 8 Introducing, improving business channels 9 Improving enterprise efficiency 10 Note: In the survey respondents identified their top three issues (not in any order). These priorities are ordered based on the percentage of respondents that included the issue in their top three. 12

CIOs see their organizations pursuing non-differentiated 2011 business strategies. CIO Survey Higher Education North America How unique is each of your strategic business priorities compared to your peers in your industry? 5% Unique in our industry Unique in our industry A differentiator in our A differentiator in our industry industry 23% Generally practiced in our Generally practiced in our industry industry 32% Generally practiced across Generally practiced across industry industry 29% Common knowledge and Common knowledge and commodity commodity 11% 0% 5% 10% 15% 20% 25% Percentage of all business expectations 13 30% 35%

CIOs see their organizations pursuing non-differentiated 2011 business strategies. CIO Survey All CIOs How unique is each of your strategic business priorities compared to your peers in your industry? 7% Unique in our industry Unique in our industry A differentiator in our A differentiator in our industry industry 28% Generally practiced in our Generally practiced in our industry industry 27% Generally practiced across Generally practiced across industry industry 27% Common knowledge and Common knowledge and commodity commodity 11% 0% 5% 10% 15% 20% Percentage of all business expectations 14 25% 30%

2011 Top 10 CIO Strategic Priorities Higher Education North America 2011 CIO Survey Top 10 CIO Strategies 2011 Please indicate the top three priorities that you expect to focus on in 2011 Developing or managing a flexible infrastructure 1 Delivering application and grow th projects 2 Improving IT management and governance 3 Enhancing IT security 4 Implementing eCommerce/eChannel solutions 5 Implementing business process improvements 6 Implementing enterprise resource planning (ERP) 7 Reducing the cost of IT 8 Expanding the use of information/Intelligence 9 Consolidating IT operations and resources 10 Note: In the survey respondents identified their top three issues (not in any order). These priorities are ordered based on the percentage of respondents that included the issue in their top three. 15

2011 Top 10 CIO Strategic Priorities All CIOs 2011 CIO Survey Top 10 CIO Strategies 2011 Please indicate the top three priorities that you expect to focus on in 2011 Developing or managing a flexible infrastructure 1 Delivering application and grow th projects 2 Reducing the cost of IT 3 Improving IT management and governance 4 Consolidating IT operations and resources 5 Reorganizing IT (attracting/retaining IT personnel) 6 Expanding the use of information/Intelligence 7 Implementing business process improvements 8 Implementing cloud solutions (IaaS, PaaS, SaaS) 9 Improving/linking business--IT relationship 10 Note: In the survey respondents identified their top three issues (not in any order). These priorities are ordered based on the percentage of respondents that included the issue in their top three. 16

CIOs see business results and knowledge as their primary sources of success and influence. 2011 CIO Survey Higher Education North America How connected are each of your IT strategies with your business strategic priorities? Very Strong Connection Very Strong Connection 52% Strong Connection Strong Connection 36% Weak Connection Weak Connection 7% LimitedLimited Connection Connection No Connection No Connection 5% 0% 0% 10% 20% 30% 40% Percentage of all CIO IT Strategies 17 50% 60%

CIOs see business results and knowledge as their primary sources of success and influence. 2011 CIO Survey All CIOs How connected are each of your IT strategies with your business strategic priorities? Very Strong Connection Very Strong Connection 44% Strong Connection Strong Connection 37% Weak Connection Weak Connection 11% LimitedLimited Connection Connection 5% No Connection No Connection 3% 0% 5% 10% 15% 20% 25% 30% 35% Percentage of all CIO IT Strategies 18 40% 45% 50%

2011 Top 10 CIO Technology Priorities Higher Education North America 2011 CIO Survey CIO Technology Priorities Please indicate your top three priorities for 2011 Cloud Computing 1 Virtualization 2 Mobile technologies 3 Netw orking, voice and data communications 4 IT management 5 Enterprise applications 6 Business Intelligence (BI) 7 Collaboration technologies 8 Other 9 Security 10 Note: In the survey respondents identified their top three issues (not in any order). These priorities are ordered based on the percentage of respondents that included the issue in their top three. 19

2011 Top 10 CIO Technology Priorities All CIOs 2011 CIO Survey CIO Technology Priorities Please indicate your top three priorities for 2011 Cloud Computing 1 Virtualization 2 Mobile technologies 3 IT management 4 Business Intelligence (BI) 5 Netw orking, voice and data communications 6 Enterprise applications 7 Collaboration technologies 8 Infrastructure 9 Web 2.0 / Social Media 10 Note: In the survey respondents identified their top three issues (not in any order). These priorities are ordered based on the percentage of respondents that included the issue in their top three. 20

CIOs anticipate making significant infrastructure and 2011 application moves over the next five years CIO Survey 1 Industries, 2 Countries When do you estimate your organization will support: 1) More than half of your transactions on a cloud infrastructure and, 2) More than half of your transactions by applications leased using a software as a service model (SaaS)? Cloud Infrastructure SaaS 60% 44% 38% 21% 16% 3% 15% 3% 2010 2011-2015 2016-2020 21 Never

CIOs anticipate making significant infrastructure and 2011 application moves over the next five years CIO Survey All CIOs When do you estimate your organization will support: 1) More than half of your transactions on a cloud infrastructure and, 2) More than half of your transactions by applications leased using a software as a service model (SaaS)? Cloud Infrastructure SaaS 57% 47% 29% 23% 19% 14% 7% 6% 2010 2011-2015 2016-2020 22 Never

The CIO Survey custom analysis contents IT Budget Changes and Spending CIO priorities for 2011 and 2014 Enterprise Environment - Levels of Digitization - IT Environment - Enterprise Environment CIO Role 23 2011 CIO Survey

Public and Private sector organizations have relatively 2011 low levels of digitization. CIO Survey Higher Education North America vs. All CIOs All CIOs 8% Dependent on on Digitized Dependent Digitized Revenues 80100% to 100% Revenues 80 to 16% 17% Digitized Majority Majority Digitized Revenues to 79% Revenues 50 to50 79% Significant Digitized Significant Digitized Revenues 25 to 49% Revenues 25 to 49% 1 Industries, 2 Countries 10% 6% 11% 52% Slight Digitized Slight Digitized Revenues 1 to 24% Revenues 1 to 24% 48% 17% No Digitization No Digitization Revenues Revenues 0% 15% 10% 20% 30% 40% Percentage of organizations 24 50% 60%

IT Environment 2011 CIO Survey Higher Education North America vs. All CIOs IT Environment 1 Industries, 2 Countries All CIOs IT has the organizational and technical flexibility to respond to changing business priorities 4.8 4.8 IT service levels meet business expectations (quality and responsiveness) 5.0 5.0 IT Organization delivers the technology innovations needed by the business 5.1 5.0 4.8 5.0 IT Organization has a clear and effective governance 4.8 4.7 CIO is a key player in determining the business strategy IT Organization is able to deliver against the organization’s strategy 5.2 5.1 IT Organization has the funding to meet its commitments for 2011 (operations, development, infrastructure) 4.6 4.9 IT Organization has the right number of skilled people to meet business needs 3.4 3.9 1 Strongly Disagree, 2 disagree, 3 Neutral, 4 Agree, 5 Strongly Agree 25

Enterprise Environment 2011 CIO Survey Higher Education North America vs. All CIOs Enterprise Environment 1 Industries, 2 Countries All CIOs 3.5 Executives and managers provide clear and effective leadership 3.5 4.0 Executives understand customer and market needs 3.9 3.1 Executives accurately communicate customer and market needs to IT 3.2 3.5 Effective at opening new markets and attracting customers 3.4 3.8 Consistently achieves its financial and strategic objectives 3.8 3.3 Organized properly for success 3.4 3.3 Effective and clearly defined corporate governance 3.4 1 Strongly Disagree, 2 disagree, 3 Neutral, 4 Agree, 5 Strongly Agree 26

CIOs are using internal benefits realization techniques that are simply not working 2011 CIO Survey All CIOs 27

CIOs are "outsourcing" their skill gaps and issues, creating a vicious cycle for IT and IT professionals 2011 CIO Survey All CIOs 28

The CIO Survey custom analysis contents IT Budget Changes and Spending CIO priorities for 2011 and 2014 Enterprise Environment CIO Role - CIO Reporting Lines - Sources of Success and Influence - CIO Use of Time - CIO Tenure 29 2011 CIO Survey

CIO Reporting Lines 2011 2011 CIO Survey Higher Education North America Reporting Lines 2011 - 1 Industries, 2 Countries 31% 35% CEO CFO COO Other 9% 24% 30

CIO Reporting Lines 2011 2011 CIO Survey All CIOs Reporting Lines 2011 - All CIOs 23% 41% CEO CFO COO Other 16% 20% 31

CIOs see business results and knowledge as their primary sources of success and influence. Higher Education North America 2011 CIO Survey Sources of CIO Success Business Results Business Results 39% Business Knowledge Business Knowledge 23% C-level relationships C-level relationships 15% Business Business relationships relationships 10% IT knowledge IT knowledge 8% IT relationships IT relationships Authority as CIOas CIO Authority Vendor relationships Vendor relationships 3% 1% 1% Global Average Weighted importance on a Ratio Scale 32

CIOs see business results and knowledge as their primary sources of success and influence. All CIOs 2011 CIO Survey Sources of CIO Success Business Results Business Results 37% Business Business Knowledge Knowledge 29% C-level relationships C-level relationships 13% Business Business relationships relationships 8% IT knowledge IT knowledge 6% IT relationships IT relationships Authority as CIOas CIO Authority Vendor relationships Vendor relationships 3% 2% 1% Global Average Weighted importance on a Ratio Scale 33

CIO Use of Time 2011 CIO Survey Higher Education North America vs. All CIOs CIO Time With Stakeholders 1 Industries, 2 Countries All CIOs Difference Between Groups Days Per Month 4% 19% 30% Board -0.30 C-Level Peers 0.57 3% 18% 4% 10% 13% 6% BU Leaders 0.16 Customers 0.54 IT Vendors -0.25 Audit/ Regul -0.10 Other 0.08 IT Dept -1.07 34 16% 36% 17% 2% 5% 11% 10%

Reimagining the CIO and the IT success 2011 CIO Survey cycle 35

The drawing together of this year's CIO Survey and 2011 case study findings leads to three stark realities CIO Survey Today more than ever, managing IT performance and delivering IT-intensive projects are necessary but not sufficient to create business, IT and CIO success. CIOs must understand that business results and business growth constitute both the outcome of, and the critical input for, their success. CIOs must address the challenge of business success in a holistic and politically astute manner. This means addressing areas outside a CIO's direct control, such as defining the digital contribution to business growth and being more disciplined about benefits realization. 36