I don’t usually consider myself overly optimistic. In fact, I’m often quick to point out the risks and pitfalls ahead and to advise others to tread carefully on new ground. Just recently, for example, I wrote here that many IT executives are facing some of the most difficult challenges and disruptions of their careers. I still believe that. How, then, can I now find a silver lining to the clouds hovering over IT? Perhaps, it’s a matter of perspective — and some recent encouraging signs — showing me that IT leaders may be in a great spot to achieve what they and their businesses set out to do.

To start with, all eyes are on technology to bring solutions and innovation to the business — and that can be your signal to shine. Timothy Chou, well-known author, Stanford University lecturer, cloud advocate and entrepreneur, has a new article in CFO magazine about how businesses can offer new services that truly benefit their customers. As he also writes in a Smart Enterprise Exchange blog:

The whole conversation about the consumerization of IT is taking you in the wrong direction. Sure, debating whether your employees should or shouldn’t be posting to Facebook at work, or how to block access to Dropbox, [is] warranted, but the bigger discussion should be about how you bring the technologies born in the consumer Internet and apply them to the challenges of delivering information that is personal and relevant to your customers and suppliers.

That statement may seem like an oversimplification, but it should elicit a sigh of relief for CIOs: You have a big job ahead of you, and it’s mission critical to your business. That should give a boost to your career and to the value of your efforts.

On the other coast of the U.S., another academic who researches the impact of digitization on business also is sanguine about current developments. In a recent article in the Atlantic, Erik Brynjolfsson, Director of MIT’s Center for Digital Business, and his co-author, Andrew McAfee, wrote that “big data is the innovation story of our time,” enabling better business forecasting and decision making than ever before. With the right analytic tools and the right people, the huge volumes of data now available can yield improved productivity and profits, they write.

And then there are assorted other recent signposts:

–Spending is up. IT can’t carry out the business’s mission without new resources. Although Gartner recently lowered its forecast for 4Q 2011 IT spending, it still expects 3.7 percent growth worldwide. And TEKsystems, an IT staffing services provider, announced higher IT budgets based on its quarterly IT Executive Outlook Survey, conducted in partnership with Inavero. The survey found that 53 percent of IT leaders expect budgets to increase in 2012. The most optimistic group is CIOs, with 66 percent anticipating increases to their budgets, according to the survey. IDC sees continued growth for Europe and the BRIC countries (Brazil, Russia, India and China) despite economic uncertainty, according to reports.

–Tangible results. Payback from recent investments are starting to emerge. For instance, savings from U.S. federal investment in virtualization technology — which is currently about $15 billion — is expected to reach $23.6 billion by 2015, according to MeriTalk, which surveyed 302 federal, state and local government IT decision makers for a recent report.

–IT Salary growth. Hiring and salaries are showing some strength. Software developers, information security analysts, network architects and business intelligence analysts are among the IT professionals who will experience the most significant salary growth in 2012, according to a new report from IT staffing  and consulting firm Bluewolf.

Starting to feel more upbeat? I am. But the truest test of growth is the response you are getting from business group leaders and top executives at your enterprise. Are last year’s investments starting to show results? Are you hearing about more satisfied customers? Is your own staff growing and gaining stature? Please share your experiences and reasons for optimism with me and your peers.

Paula Klein

Editor and Community Manager

Smart Enterprise Exchange

Our last Online Smart Enterprise Exchange brought together about 100 IT and business executives for a lively online discussion about being able to innovate in a difficult economy and the role of IT automation on productivity. J. Michael O'Dell, CIO, Pacific Coast Companies Inc. (PCCI) and Vercie L. Lark, CIO, Embarq, were among those speaking and answering questions from our participants about a wide range of topics.

Rather than recapping the presentations (you can download the podcast here), I'd like to share some of the questions and comments we received because I'm sure you have similar experiences and concerns. What's more, you may be surprised at some of the responses.

For instance, if you think that worker productivity has suffered as a result of the economic downturn, think again. More than half (55.6 percent) of the 21 respondents to an informal poll question during the exchange, said that poor productivity was not the case at their business. According to one participant, a systems architect for a leading U.S. logistics company, "If anything, the economic downturn has stressed the importance of productivity for the workforce. The consensus [among business leaders] is that increased productivity — thanks to automation — proves the value-add for our workers." As workers see the return on their investment, he said, "They are driven to maintain the momentum."

In fact, many businesses are continuing the process automation efforts they already have under way even though there might be fewer resources available. The majority (42.9 percent) of those responding to the online poll said the economy is not having an impact on their plans.

"Primarily, we believe that our current processes and automation plans are well executed and this will continue for the foreseeable future," said the logistics IT manager. "Of course, we continually evaluate those efforts to determine where additional cost savings could be realized. We look closely at the expected ROI to determine which areas are automated first."

When it comes to ROI, half of the participants said the average length of time their current IT projects have to demonstrate payback is one year or less — much shorter than in the past.

However, one attendee asked whether the projects are actually less than one year in duration or whether they are being split into subprojects with staggered delivery and ROI for each. "Net present value (NPV) / ROI for automation can look great on paper but is difficult to achieve because the business has to take tough actions to achieve the bottom-line benefit," the consultant said.

Several people said they are reevaluating their project portfolios and reprioritizing requests. One person noted that "ROI is both industry-specific and initiative-specific. Depending on the type of automation, you could see a range of values." Short ROI cycles provide more successes in a given period, and "everyone likes to be associated with them," another participant added.

The impact of automation on customer experience was also discussed. "It's important to ensure that these initiatives do not have a negative impact on the company image in the eyes of the customer and your local operating communities," one manager said. "It's a fine line to walk — are businesses being viewed as a responsible corporate citizens if we are downsizing as a result of automation?"

Smart Enterprise Exchange will continue to explore the topics of IT Productivity and Optimal Automation with additional best practices, insights and resources beginning in May. If you would like to contact any of our speakers or forum participants, please let me know ateditor@smartenterpriseexchange.com.

Paula Klein
Editor
Smart Enterprise Exchange

The pressure is on for CIOs to ride out the difficult economy with keen leadership. For the U.S. Department of Transportation and The New York Times Company, smaller, less-costly deployments such as wikis and cloud computing are demonstrating quick results. For others, like Bechtel Corp., business process improvement is the best approach to follow. Still other IT leaders will use the current economic and business conditions as motivation for long-term innovation. In fact, there is no single elixir for success — each strategy has to make sense for that particular enterprise.

Maybe that's why I'm troubled when I read that some analysts and business leaders want to set strict deadlines on how long IT has to prove its business value. It's certainly true that business economics are at a critical inflection point; however, flexibility is needed too. One quarter might be too long to wait for ROI on a small project, but is two weeks too short? Do budget cuts have to be a uniform 20 percent across the board, or can each project be evaluated on its merits? These are all topics that will be discussed at our upcoming Smart Enterprise Exchange events. On February 17 in Seattle, Gartner Vice President Ken McGee will offer his recommendations and research. Other North American CIO discussions are set for Northern Virginia on February 11, Dallas on February 19, and in New York on March 5. Executive exchanges in Europe are planned for the spring.

In addition to these events, this month we feature several CIOs who are already demonstrating innovation and leadership. In our Smart Practices article, we describe how the U.S. Department of Transportation uses a virtual environment to train its repair people. The federal agency also is testing a wiki that encourages better collaboration with research universities. The merits of cloud computing at The New York Times and process innovation at Bechtel Corp. are also presented.

Is there a common thread among the leaders at these diverse enterprises? Fiona Packman, who co-leads Egon Zehnder's Technology Media and Telco Practice Group in London, writes in her Insights column that outstanding CIOs — those ranked in the top 15th percentile — scored highest in "results orientation, strategic orientation, change leadership and customer focus." Taken together, these executives are "strategic, client-based change leaders." In fact, Packman found that the CIO and CEO resemble each other far more than they differ — which may surprise many executives who hold these titles.

Certainly, the intense pressure on CIOs will continue unabated for these coming months. One global survey commissioned in January by the IT Governance Institute (ITGI), an independent research organization, found that there is much unrealized opportunity for IT to increase its value as a strategic partner and innovator. But imposing strict deadlines probably won't achieve the goals. Instead, as John Thorp, a member of ITGI's IT Governance Committee, concludes: "Given the current economic climate, enterprises should strengthen their governance of IT to ensure that expenditures are delivering real value, reduce or curtail those that aren't, and pursue innovative uses of IT that can sustain and increase value."

That sounds like a much more balanced strategy to me. Please "exchange" your views and experiences with us.

Paula Klein
Editor
Smart Enterprise Exchange
editor@smartenterpriseexchange.com