It’s Time For I&O To Return To A Growth Agenda

If you’re anything like me, you’re probably sweating your way through a pretty hot summer. We are, after all, on pace for the hottest year on record. And unfortunately things are going to get worse. Why? Because it’s that time of year again: Budget season. That’s right – it’s time to start thinking about 2011 and sweating through all the infrastructure and operations projects that need investment.

Fortunately, this year will be different.

I just wrapped up a report looking at I&O budgets heading into 2011 and the outlook is quite positive (you can find a copy of the report here). In fact, the biggest takeaway for me is that IT leaders tell us they’ll finally break the age-old MOOSE stalemate— setting aside 70% of the budget for maintenance of organization, systems, and equipment (i.e. MOOSE or “keeping the lights on”) and 30% for new initiatives (i.e. “innovation”). This year we expect to see only half the budget dedicated to the MOOSE, the usual 30% going to new initiatives, and a surprising 20% or so set aside for business expansion efforts.

So what does this mean for you? Today’s I&O executives must:

  • Focus the second half of 2010's and 2011’s budget on growth. Nearly half of the IT operating and capital budget is being set aside for new IT initiatives and increasing capacity to support business expansion.
  • Stop focusing on “business as usual” investments. It's no longer sufficient to set aside half your budget for incremental data center improvements and the other half for incremental desktop and device improvements. However, these aren't the wrong categories; it's just a matter of focusing your budget on new capabilities.
  • Maximize budget by focusing on three key initiatives. You should start by transforming your desktop, continue by retooling your data center to support a path to cloud, and round out your efforts by industrializing your IT operations.

It’s this last point that will be the main focus of our research for the remainder of the year. Expect Forrester’s I&O team to retune the research engine to help you with the architecture, strategy, ROI, and implementation best practices for these three initiatives.

The good news is that things will really heat up. The bad news is that, well, things will really heat up. Increased budget will in turn generate increased expectations that you’re aligning I&O with business requirements. So stop sweating your infrastructure assets, align with the business demand to focus on growth, and focus your efforts on modernizing your desktops, data centers, and IT operations.