Two out of three enterprises want to grow faster than the market in 2007, making competitiveness a key goal for CEOs. CIOs are aware of the business priorities in 2007 and the need to improve processes, workforce performance and attract new customers. However, CIO near-term priorities remain internally focused on IT services, according to a worldwide survey of more than 1,400 CIOs by Gartner Executive Programs (EXP) - Creating Enterprise Leverage: The 2007 CIO Agenda. Gartner analysts warn that this disconnect will place CIOs and IT at risk.

"CIOs cannot rely on traditional actions — such as improving operational efficiency, reducing IT costs and automation that lead to commoditization — to meet executive expectations," said Mark McDonald, group vice president and head of research for Gartner EXP. "Success in 2007 requires making the enterprise different to attract and retain customers."

McDonald said there is a clear difference between the business executive's expectations of IT and what CIOs say is important in the near term and where they are focusing their attention (see Table 1). CIOs will need to reprioritize their work to meet near term business expectations. The difference between expectations and strategies creates tension and the potential threat to CIO credibility and standing.

Table 1
2007 Business and CIO Priorities

Executives expect CIOs and IT to play a significant role in leveraging short-term performance and long-term competitiveness in 2007. Executives expect the top three business priorities (improve business process, control enterprise cost structure, and attract, retain and grow customers) to improve current capabilities (see Table 1), while priorities 4-8 are expected to build capabilities for the future.

"CIOs will need to concentrate on information as a leverage point to enhance efficiency, increase effectiveness and support competitiveness," McDonald said. "This also corresponds to the continued importance of business intelligence in 2007. As such, CIOs will continue to be responsible for IT - the mechanism. They can further play a greater role in leveraging information - the understanding that drives performance and innovation."

Worldwide IT budgets are expected to increase by an average of 3 percent in 2007, up slightly from 2006 IT budget increases of 2.7 percent. Fifty-one percent of CIOs expect a planned IT budget increase. Thirty percent of CIOs report no change in their budget from 2006 to 2007, while 19 percent of CIOs report a planned IT budget decrease.

Sixty-three percent of CIOs report that in 2007 their enterprise expects to increase its market share or expand its mission in 2007. That is approximately double as many as in 2006. Business executives expect IT to raise current performance and build new capabilities. "Doing more with less - cutting IT costs will not realize these goals," McDonald said.

"CIOs will need to create enterprise leverage because the pace and scale of customer demands are overwhelming budget growth and traditional approaches to change," McDonald said. "CIOs can use leverage to focus their actions and create significant results for the enterprise and its strategies. The challenge is that CIOs must continue to strengthen the core of IT and create new sources of leverage by focusing on IT leverage points rather than brute force change programs."

CIOs can create enterprise leverage when a focused effort produces significant results for the enterprise and its strategy. This means that CIOs need to exploit new approaches to transform the business. CIOs can draw on one or all the following sources of enterprise leverage:

Technology - Reducing enterprise cost structures, improving operational scale, or raising process performance through automation, integration and standardization. CIOs are delivering current services well, but 63 percent of CIOs do not have the right skills in the right amount.

Agility - Managing the speed, scale, cost and risk of change through applying change management disciplines - managing the supply of change with the capacity for change.

Information - Gaining the business insight and understanding required to act in a changing environment. Only 36 percent of CIOs believe that management is using the right information to run the business.

Innovation - Bringing new ideas to the market successfully by evolving current capabilities, implementing new capabilities and gaining market acceptance for those changes. 86 percent of enterprises see innovation as critical to success, but only 26 percent of enterprises believe that their current innovation level is sufficient to achieve their strategy.

Enterprise Strategy Group (ESG) recently released a new research report, VTL Adoption and Market Trends, which examines organizations' current disk-based backup and recovery activity and habits, as well as analyzes the adoption and market trends specific to virtual tape library (VTL) — a software or appliance-based technology designed to make a disk-based storage array emulate a tape library. The report provides insight into early adopters' experiences to-date with VTL technology, as well as features and functionalities users would like to see added to their VTL system(s).

Among the report's findings:

• Adoption of disk-based backup and recovery technologies, in general, remains strong. Users continue to implement these technologies as supplements to and/or permanent replacements for existing tape-based backup and recovery infrastructures. Almost three quarters of the survey respondents are doing some form of backup to disk, which ultimately means users are moving away from tape-based backup.
• Adoption of VTL solutions is increasing. Almost one-third of survey respondents have implemented a VTL solution and another one-third plan to do so within the next 24 months. ESG attributes this growth to a number of technical factors (e.g., ease of use, backup and recovery benefits, scalability, management, etc.) as well as to the increasing availability of VTL solutions from both established vendors and emerging companies.
• Backing up to VTL is enabling early adopters to keep backup data on disk longer (i.e., extend retention periods). ESG asked respondents to indicate what the average amount of time backup data was kept on their VTL system. Almost half of the respondents reported a retention period of 2 months or greater. As this technology matures, ESG believes these retention periods will only continue to increase.
• Backing up to VTL is enabling early adopters to meet and/or exceed both backup and recovery objectives. The majority of respondents indicated that since implementing VTL, they have been able to meet or exceed their backup and recovery objectives. As organizations keep backup data online for longer periods of time, the ability to back up and recover that data in a timely fashion will be critical.

"If proof is in the numbers, then VTL is clearly becoming one of IT's early favorite remedies for fixing broken tape-based data protection environments," says Heidi Biggar, an analyst at the Enterprise Strategy Group and author of the report. "VTL doesn't just address the key pain points of tape-based backup (e.g., media management and backup and recovery performance). For an increasing number of users, it is a means to an ultimately tape-less data protection environment. As the data shows, users are already well down this path with 85% of the VTL users having already eliminated tape from their daily backup schedules."

Over the next two years, more than 25 percent of critical data in Fortune 1000 companies will continue to be flawed, that is, the information will be inaccurate, incomplete or duplicated, according to research and advisory firm Gartner, Inc. Gartner expects that three-quarters of large enterprises will make little to no progress towards improving data quality until 2010. To gain competitive advantage from information, organizations need to identify "data stewards" in the business and manage information as a corporate asset.

Speaking at the company's inaugural Business Intelligence and Information Management Summit in Sydney this week, Gartner Research vice president Andreas Bitterer said that "dirty data" or poor data quality is an often-overlooked business issue and it can have a large negative impact on a business.

"There is not a company on the planet that does not have a data quality problem," said Bitterer. "And where a company does recognize they have a problem, they often underestimate the size of it. It's also important to realize that data quality is not static, as various forces cause it to change over time. So addressing this issue is not a one-time project, but an ongoing program that requires commitment and often a cultural shift as well."

The cost of poor data quality
Gartner research shows that poor-quality customer data leads to significant costs, such as higher customer turnover, excessive expenses from customer contact processes like mail-outs and missed sales opportunities. But companies are now discovering that data quality has a significant impact on their most strategic business initiatives, not only sales and marketing. Other back-office functions like budgeting, manufacturing and distribution are also affected.

Compliance and transparency are now at the top of the list of most companies' data concerns, according to Gartner. Legislation such as the US Sarbanes-Oxley Act, the European Basel Accords and the Privacy Act in Australia now demands that information is accurate and managed appropriately.

"By introducing data quality initiatives, some companies have added millions of dollars to their bottom line as they gain benefits such as increased sales, lower distribution costs and better compliance," said Bitterer.

Fixing the problem of 'dirty data'
"Data quality is not an IT problem. IT can help fix it, but the business must own the problem," said Bitterer. "For example, company culture can have a significant influence. Organizations need 'data stewards', people within the business who are responsible for the quality of the information. However, technology will play a role in fixing many data quality issues, and organizations need to invest in a portfolio of data quality solutions such as profiling, cleansing, matching and enrichment."

According to Gartner, data quality has many facets, including:

• Existence (whether the organization has the data)
• Validity (whether the data values fall within an acceptable range or domain).
• Consistency (for example, whether the same piece of data stored in multiple locations contains the same values)
• Integrity (the completeness of relationships between data elements and across data sets)
• Accuracy (whether the data describes the properties of the object it is meant to model)
• Relevance (whether the data is the appropriate data to support the business objectives)
• The first two of these aspects of quality represent a good staring point for improvement, as they can be measured fairly easily and will help identify major gaps in the data. From there, organizations should look at including other attributes in their definition of data quality.

"Many companies are trying to improve data quality 'by hand', writing their own correction or cleansing routines, when instead they should look at tools already available which can help them," said Bitterer.

Enterprise Management Associates (EMA) recently released an in-depth and independent study on Enterprise Content Management, which revealed that many organizations have little or no content management discipline, and the emergence of online content types adds to challenge. The report, "Enterprise Content Management: Toward a New Content Paradigm" explores enterprise content usage patterns, business drivers, expectations, preferred vendors, distribution requirements and more.

Enterprise Content Management (ECM) consists of a broad collection of disciplines that enable a business to create, acquire, store, index, deliver and delete a wide variety of content. It is a critical part of information technology, providing the ability for businesses to access structured information, meet legal and compliance requirements and serve customers. From a basic paper-based filing system to state-of-the-art electronic asset storage, ECM is essential to any business.

"ECM is a rapidly evolving field within IT management," said EMA Senior Analyst Andi Mann. "In addition to the challenge posed by traditional content, such as documents, images, forms and videos, today's enterprise must be able to address new online content technologies like web pages, blogs, wikis, podcasts and RSS feeds in their overall ECM strategy."

A sampling of key findings from EMA's in-depth quantitative and qualitative research into ECM documents that:

• Online content technologies are rapidly overtaking traditional content-instant messaging is already more popular than fax, and corporate blogging will triple in 12 months-even though most companies are not prepared for them.
• Overall, enterprises are very happy with their ECM effectiveness and cost-benefit-more than 80% rate their ECM solution as being effective with at worst a neutral cost-benefit.
• Enterprises are implementing ECM primarily to improve access to information, collaboration and productivity. By contrast, cost reduction and regulatory compliance rate last and second-last respectively as expected outcomes from ECM deployments.
• E-mail is by far the most used content delivery mechanism, ranked most important by almost 90% of enterprises, beating both Web pages (66%) and hardcopy delivery (50%).
• Many organizations have little or no content management discipline. 82% of enterprises use network file servers as their primary content repository; 60% use e-mail folders; 14% have no formal content repository at all.

Despite a growing awareness that environmental concerns will impact their future IT operations, the vast majority of large companies have yet to build "green IT" requirements into how they buy and use technology, according to a new report by Forrester Research, Inc. A Forrester survey of 124 IT operations and procurement professionals in North America and Europe found that while 85 percent said environmental factors are important in planning IT operations, only one-quarter said they have written green criteria into their company's purchasing processes.

Leading technology vendors are investing significant resources in green initiatives such as energy-efficient servers, data center power and cooling solutions, cleaner manufacturing, and device recycling programs. But is the market listening? And what will it take to sway IT buyers to go green?

The Forrester survey found that IT buyers want to hear more about vendors' efforts to design and market more environmentally responsible products and services. Only 15 percent of the IT professionals surveyed said they have a high level of awareness of vendors' green initiatives, and most said they were hearing little or nothing from top-tier vendors about green solutions. Most respondents said they expected green to impact their purchasing decisions in the future.

"Technology marketers today will find increasingly receptive audiences for green evangelism," said Mines. "Slowly, that receptivity will translate into action on the part of enterprise IT organizations."

In-depth interviews with more than two dozen of the survey respondents illustrate the current dynamics around green IT. As one chief technology officer at a manufacturing company told Forrester, "We would do green because it makes business sense, not because it's green. It would have to show cost savings."

"Our customer survey and interviews provide a directional view into the nascent green thinking of enterprise IT organizations," said Forrester Research Senior Vice President Christopher Mines. "We heard two reasons why green matters: efficiency and corporate responsibility. Most IT decision-makers told us that a green purchase would only happen in the context of cost reduction. These are hard-headed, ROI-driven business decisions."