CIO role changing as IT industry struggles with shift to smaller projects

Companies in the information technology industry are struggling to deal with a shift from major customer projects to smaller, incremental implementations of technology services, Fujitsu Australia chief executive officer Phil Kerrigan told an industry meeting today.

Speaking at the Australian Information Industry Association (AIIA) Business Briefing, Mr Kerrigan said the shift to smaller projects with demonstrated return on investment was having a significant impact on the role of chief information officers (CIOs).

"Businesses have stopped buying technology for technology's sake. They have decided the IT 'mega-project' is not as productive as building incrementally, and they are demanding smaller projects with shorter payback times," he said.

"They have decided that a return on investment is more important than being up-to-date with the latest gadgets and sexiest software. That shift is something the industry is struggling to come to grips with.

"It is forcing change in the role of the CIO. They are becoming more strategic and business-centric, not technology-centric. I see top technologists moving away from responsibility for corporate knowledge management in favour of working more closely with chief executives to refine company operations."

The difficult business climate had forced the IT industry to "grow up" in 2002, Mr Kerrigan said.

"We're now a mature industry and susceptible to the same pressures as other traditional businesses. With major household names like Compaq disappearing this year, in the IT industry, 'big' no longer means 'safe'.

"Some substantial companies will struggle for survival in the next year. There will be more consolidation and more big names will disappear as the industry struggles with rapidly changing, low growth markets, smaller margins and shrinking revenues per unit."

Mr Kerrigan said mobility and wireless would grow significantly in the next year, and the industry would take steps towards achieving a true IT utility model whereby businesses would "plug in and pay" for what they need- such as storage, applications, or networks - on demand.

"While mobility will become significantly more important, 3G will not be the saviour for telecommunications companies during the next year," he said. "Outsourcing will continue to grow and the services business will continue to do better than the product business."