HOBOKEN, N.J. — The current economic crisis is forcing companies to quickly evaluate and modify their business models, but unlike previous economic downtrends, the information technology organizations are not feeling the cuts as quickly as in the past, according to a newly released survey.
"This time, businesses are using IT to reduce costs and to increase productivity across the company," said Jerry Luftman a Distinguished Professor and Associate Dean at Stevens Institute of Technology, who also serves as the Vice President for academic Affairs for the Society for Information Management.
More than 300 respondents from 231 companies responded to Dr. Luftman's annual survey (in June) which has become an industry barometer. The findings were released earlier this month at SIMposium 2008 in Orlando. Overall, the survey indicated that the IT industry remains strong, but Luftman noted that some data shows 2009 will likely to be a difficult year.
Among the findings in the report:
- Chief Information Officers are spending about 80 percent of their time on non-technical relates issues.
- Forty-five of the respondents said their CIOs have been in place for more than three years with the average CIO spending 4.3 years in their current position, up from 4.1 in 2007.
- Of those surveyed, 22.2 percent said their IT departments are organized as federations, up 4.2 percent from a year earlier. Federated organization structures tend to have higher IT business alignment maturity scores, as uncovered in important benchmarking research underway by Luftman. Additionally, organizations where the CIO reports to the CEO also tend to have higher alignment maturity ratings. More than 40 percent of CIOs report to their CEO. Another important insight in Luftman's maturity research is that organizations with higher maturity scores have higher overall company performance.
Luftman noted that companies are looking to hire IT employees who have more than just technical savvy saying they want "people who can demonstrate interpersonal, management, and industry skills."
In fact, the survey found that companies want entry level and mid-level employees to demonstrate ethics and morals, oral communication and the ability to more effectively collaborate with their business partners.
"Technical skills are important, but it's not everything to most companies," said Luftman.
Looking towards 2009, the survey found that companies would likely increase or keep their IT headcount flat. But, noted that budget allocation for offshore outsourcing is projected to increase to 5.6 percent in 2009, up from 3.3 percent this year.
Some companies will have to do more with less as respondents said that IT departments, which have an IT budget averaging 3.82 percent of revenues, although having increasing IT budgets for 2009, will be faced with increases that will likely be down.
About Professor Luftman
Jerry Luftman (jluftman@stevens.edu) is Associate Dean and a Distinguished Professor for the graduate information systems programs at Stevens Institute of Technology, where he also earned his doctoral degree in information management. His 23-year career with IBM included strategic positions in IT management, management consulting, information systems, marketing, and executive education. He played a leading role in defining and introducing IBM's Consulting Group. As a practitioner, he has held several positions in IT, including CIO. Luftman's research papers have appeared in dozens of professional journals and books. His book, Competing in the Information Age: Align in the Sand, was published by Oxford University Press. He has been a presenter at many executive and professional conferences and is regularly called on by many of the largest companies in the world. He has served on the SIM Executive Board for over 10 years and was president of the New Jersey Chapter of SIM.
About Stevens Institute of Technology
Founded in 1870, Stevens Institute of Technology is one of the leading technological universities in the world dedicated to learning and research. Through its broad-based curricula, nurturing of creative inventiveness, and cross disciplinary research, the Institute is at the forefront of global challenges in engineering, science, and technology management. Partnerships and collaboration between, and among, business, industry, government and other universities contribute to the enriched environment of the Institute. A new model for technology commercialization in academe, known as Technogenesis®, involves external partners in launching business enterprises to create broad opportunities and shared value. Stevens offers baccalaureates, master's and doctoral degrees in engineering, science, computer science and management, in addition to a baccalaureate degree in the humanities and liberal arts, and in business and technology. The university has a total enrollment of 2,150 undergraduate and 3,500 graduate students with about 250 full-time faculty. Stevens' graduate programs have attracted international participation from China, India, Southeast Asia, Europe and Latin America. Additional information may be obtained from its web page at www.stevens.edu.
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