Gartner on 2003 - the bad news

Call it realism, call it pessimism - just don't look to Gartner for false cheer about the IT market. The analyst house said it has taken some flak from vendors for this attitude but it is holding firm.

According to VP and research director John Mahoney: "No one is going to cheerlead their way out of this [downturn]," he said, at a London briefing this month. "Some suppliers have tried to do this with new releases of their software."

So while some end users it has spoken to say they expect some improvement in their IT budgets, Gartner says there is no point expecting a sudden surge in business next year. It isn't going to happen.

In that situation, IT has a hard row to hoe. CIOs will have to perform a very hard double act. Even after the dot-com disaster and Y2K panic, when many CIOs feel their reputation is at a very low ebb, they will have to go on a tactical, PR offensive.

IS budgets will be under tighter scrutiny than ever and CIOs must maintain rigorous cost control. At the same time, they must do more for the board of the company, or else lose status, get blocked out of the key business decisions, or even lose major functions to outsourcing.

"Cost control is good in the short term but ultimately makes no real contribution to the company," said Mahoney. To survive, the CIO has to get 'aligned' with the business goals, and start to deliver real business value, he said.

"CIOs need to establish a value proposition versus value from an external partner. If their credibility is damaged they will be excluded," he warned.

And yes, this means marketing the IT department internally, to the rest of the corporation, which is probably one of the most difficult marketing campaigns imaginable. A glossy brochure saying how good the IT service is will have the opposite effect, alienating users, while good reliable service is likely to go completely unnoticed. Indeed, most IT departments are regarded with scepticism or grudging acceptance by users, said Mahoney - and he was talking about the large users represented at Gartner's Symposium in Cannes earlier this year.

Other threats to CIOs include the need to manage difficult staffing situations, where the expectations of employees may be out of line with what is realistic. They also have to keep IT moving towards useful goals and the next one in line is the hardest one ever - turning management into real-time management.

"Management has 'e'd' procurement, the sales force and every other part of the organisation," said Mark Raskino, Gartner research director. "The one thing it didn't 'e' was itself."

In other words, in order to deliver any real benefits to the company and impress the senior management, the IT department has to force automation on the most resistant, reactionary part of that company - management itself. It's an utter nightmare.

Alongside these internal threats to their power-base, CIOs face severe threats externally. They can expect to see key suppliers disappear this year, through mergers or bankruptcy. They need to have contingency plans in place, in the form of back-up internet service and escrow agreements to make sure they still have access to key software and data.

In other words, even with what they have suffered already, CIOs could find that 2003 is the worst year they have experienced.