Gartner: The future is bright but it's a long haul ahead for public sector CIOs

CIOs see 2010 as another tough year with 41% expect continued business contraction, while 53% see stabilisation and only 6% see actual growth coming in 2010.

The survey, the largest of its kind, and one that Gartner Group has been conducting since 1999 - so has covered more than just one recession - provides fascinating insights into CIO experiences and strategies.

2009 was the worst year for IT budgets ever. Overall, the 1,600 companies represented $126bn dollars in IT spend and 40% of that spend was in the public sector.

As a group they reported that their 2009 budgets were cut by more than 8% in 2009 but while CIOs in some areas like financial services and others expect an improvement in 2010, Mark McDonald, Gartner group vice president, executive programs, warns that public sector CIOs are in for another tough year or two. Maybe more.

'They expect to see at least another 1.8% come off their budgets. That's partly to do with the public sector financial year and an election in the UK doesn't help. Unlike previous elections the talk now amongst all parties is all about new efficiencies and IT is viewed as one of those areas that can make efficiencies.

Europe in fact is the only area where CIOs expect further cuts with the US, Asia and Latin America expecting the purse strings will loosen.

He added: 'But if this recovery follows past recessions we generally see IT see 1% increases a year after general recovery. In the public sector, which has still to face a lot of the cutbacks that have been made in the private sector, that means 2010 will be very tight although 2011 could be lighter.'

And if we face a double dip or bath shaped recovery, those public sector spickets might not loosen until 2012/13 at the earliest.

However, if public sector CIOs continue as they have so far - and follow the examples of their private sector peers - they are handling this downturn differently from previous recessions.

'The emphasis in this recession has been to keep skills and IT people on board in preparation for recovery rather than slash and burn. The approach has been far more strategic than previously, with the emphasis on renegotiating contracts, freezing salaries rather than making jobcuts and, in some cases in the public sector, active recruitment before the budgets are slashed.'

McDonald adds: 'US CIOs are more pessimistic about 2010 than European CIOs. Both the public and private sector are more plugged into business and economic cycles and they have a better understanding of tough investment.'

Given that we can't crystal ball this recovery any more than we forecast the recession and global financial meltdown, by 2013 it looks like CIOs expect technology to help take them from technology service provider role to source of competitive advantage.

Well, we've heard it before but McDonald reckons the 2010 environment makes this aspiration more achievable.

• The recession has refocused IT on the things that are important, outsourcing the commodity services, and reduce the tasks that kept

• Executives, not just CIOs, are reconnecting IT with business performance and productivity.

• New technologies, like Web 2.0, cloud computing, and mobile devices are creating new opportunities that build on rather than require replacing core systems.

McDonald said, 'this isn't just adding complexity on legacy, the curse of big public sector departments, but is enabling lighter, more agile support and change projects.

Cloud computing was ranked number 2 after virtualisation and it is the lighter weight solutions, of which Cloud is a part, that can free up budget and the capex on fixed assets.

This will appeal especially to the smaller, medium sized public sector departments,' said McDonald.

Going through to 2013, McDonald said public sector CIOs are concentrating on core operations and consolidating operations.

In 2009 the top three priorities in descending order were improving IT governance; implementing IT process improvements; linking business & IT strategies and plans.

In 2010, Gartner expects the top three to be improving IT governance; linking business & IT strategies and plans; and implementing IT process improvements. He said that technologies that are front of CIO mindset are virtualisation, Web 2.0 and Cloud computing.

By 2013, the top three priorities will be delivering projects that enhance mission; leading enterprise change initiatives; and developing/managing a flexible infrastructure

Gartner surveyed nearly 1,600 CIOs worldwide in Q4, 2009, to examine the 2010 agenda for leading CIOs - of which just over 20% operate in the public sector CIOs.

CIOs see 2010 as another tough year with 41% expect continued business contraction, while 53% see stabilisation and only 6% see actual growth coming in 2010.

The survey, the largest of its kind, and one that Gartner Group has been conducting since 1999 - so has covered more than just one recession - provides fascinating insights into CIO experiences and strategies.

2009 was the worst year for IT budgets ever. Overall, the 1,600 companies represented $126bn dollars in IT spend and 40% of that spend was in the public sector.

As a group they reported that their 2009 budgets were cut by more than 8% in 2009 but while CIOs in some areas like financial services and others expect an improvement in 2010, Mark McDonald, Gartner group vice president, executive programs, warns that public sector CIOs are in for another tough year or two. Maybe more.

'They expect to see at least another 1.8% come off their budgets. That's partly to do with the public sector financial year and an election in the UK doesn't help. Unlike previous elections the talk now amongst all parties is all about new efficiencies and IT is viewed as one of those areas that can make efficiencies.

Europe in fact is the only area where CIOs expect further cuts with the US, Asia and Latin America expecting the purse strings will loosen.

He added: 'But if this recovery follows past recessions we generally see IT see 1% increases a year after general recovery. In the public sector, which has still to face a lot of the cutbacks that have been made in the private sector, that means 2010 will be very tight although 2011 could be lighter.'

And if we face a double dip or bath shaped recovery, those public sector spickets might not loosen until 2012/13 at the earliest.

However, if public sector CIOs continue as they have so far - and follow the examples of their private sector peers - they are handling this downturn differently from previous recessions.

'The emphasis in this recession has been to keep skills and IT people on board in preparation for recovery rather than slash and burn. The approach has been far more strategic than previously, with the emphasis on renegotiating contracts, freezing salaries rather than making jobcuts and, in some cases in the public sector, active recruitment before the budgets are slashed.'

McDonald adds: 'US CIOs are more pessimistic about 2010 than European CIOs. Both the public and private sector are more plugged into business and economic cycles and they have a better understanding of tough investment.'

Given that we can't crystal ball this recovery any more than we forecast the recession and global financial meltdown, by 2013 it looks like CIOs expect technology to help take them from technology service provider role to source of competitive advantage.

Well, we've heard it before but McDonald reckons the 2010 environment makes this aspiration more achievable.

• The recession has refocused IT on the things that are important, outsourcing the commodity services, and reduce the tasks that kept

• Executives, not just CIOs, are reconnecting IT with business performance and productivity.

• New technologies, like Web 2.0, cloud computing, and mobile devices are creating new opportunities that build on rather than require replacing core systems.

McDonald said, 'this isn't just adding complexity on legacy, the curse of big public sector departments, but is enabling lighter, more agile support and change projects.

Cloud computing was ranked number 2 after virtualisation and it is the lighter weight solutions, of which Cloud is a part, that can free up budget and the capex on fixed assets.

This will appeal especially to the smaller, medium sized public sector departments,' said McDonald.

Going through to 2013, McDonald said public sector CIOs are concentrating on core operations and consolidating operations.

In 2009 the top three priorities in descending order were improving IT governance; implementing IT process improvements; linking business & IT strategies and plans.

In 2010, Gartner expects the top three to be improving IT governance; linking business & IT strategies and plans; and implementing IT process improvements. He said that technologies that are front of CIO mindset are virtualisation, Web 2.0 and Cloud computing.

By 2013, the top three priorities will be delivering projects that enhance mission; leading enterprise change initiatives; and developing/managing a flexible infrastructure