Could you talk about what the CIO’s outlook should be for 2012?

Well, the economics are such that we’ve not seen drastic cuts in IT budgets. We’re not seeing huge increases in hiring of staff like a couple of years ago. From a resources perspective things are settling down and we’re not seeing the type of hyper growth that we were a few years ago. A couple of years ago, we were telling CIOs about how to scale, and not to break what was always in place.

Based on the research that we have been busy conducting over the last few months, CIOs have realized that the key to innovation in in the customer experience. Today CIOs are looking at newer and better ways of engaging with their customers and improving their customer experience. One of the key things that CIOs need to do now, is to use IT to improve the customer experience, utilizing some of the tools available in the market.

In this scenario, what kind of role can technologies like Social Media play?

Today we are experiencing a shift in web volumes. If you look at Fortune 500 companies, over 2/3rds of these companies have seen a decline in volume of visitors to their websites. People are now accessing these companies through social media channels like the Facebook. So it’s a conundrum really. The real answer is that in the social media space, it’s a tiny investment, and in most cases it doesn’t cost anything at all, to say, put up a Facebook page. It starts becoming a little more expensive if you want to analyze this data and if you want to enable social tracking and social maps into your CRM applications - that’s where it gets a little complicated. Even then, its nowhere nearly as expensive as an ERP system, or a BI system.

The thing that’s happening in the social media sense is that it’s not really the CIO that’s driving these initiatives it’s the CMO. So from our conversations with vendors and so on, its the CIO that can guide the CMO to get meaningful results from social data. The other way of looking at social media is for internal communication and collaboration. Those are often part of the BPI (Business Process Improvement) initiatives and in this instance, the IT organization does have an important role in getting these projects moving, simply because otherwise the achievements capability of the tools available are not immediately obvious to the non-IT people that are using them.

Today the need is to reach out to your customers and understand how they are using the products that you build for them, and its not like we haven’t seen this before, but today the tools available to the CIO are much more advanced and have immense capabilities. For example, for manufacturers, once you’ve sold, it to the supply chain, its difficult to know what happens to it and how people use the product. Its a long supply chain and manufacturers want to understand their customers better and they haven’t really been able to do that conventionally. Today, however you have a number of tools like your BI platforms, social media and so on, that can allow you to zone in on your customers and see how they are using your product. Given that background, I think today organissations are really realizing that this customer engagement is where the real value lies, and technology through cloud, mobility and social computing, and these can be inferred as the companies wanting to interact more with their users. Today an enterprise has the option of having channels that can connect them to their customers.

With stagnant budgets and rising expectations, how can CIOs manage?

Global IT budgets have more or less been flat, and have not changed much. However when it comes to India, the numbers are slightly higher given the current rate of inflation that exists in the country currently. But for all practical purposes, budgets in India are definitely not on the rise.

However, having said that there is always a perennial problem of rising expectations and flat budgets. Now if you look at how budgets have been consumed, 68% of the budget is used to keep current IT systems running optimally. This leaves only 32% available for new projects and initiatives that the IT organisation may embark on. The good news is that it shows an element of success. When you put a new project in, you have to spend more to keep it operational, year on year. Now, when you look at 68% of the budget being allocated to maintenance, you realize how good CIOs have become at shifting costs. Because if the weren’t, then this number would keep growing towards a 100% year on year. CIOs are working extra hard, so that they can keep a lid on the amount of money they spend on maintenance. So this is a remarkable testament of how CIOs in India are reducing costs. The problem is it doesn’t raise a lot of cash for new projects. However the 30% of budgets on new projects that remain provide some relief. Particularly when it comes to mobility or social computing; budgets for these are somewhat modest. This is when one can start looking at things like Business Intelligence.

So what we are looking at now, is a tipping point, possibly in the next 3-5 years, where CIOs have optimized/virtualized/consolidated most of their IT assets, and have reached a point of stagnation.

So in this case, one great hope that we have is that cloud computing will be mature and secure enough to offer these CIOs a real value addition in terms of infrastructure. We believe that the economics of computing will reach a point where moving to the cloud is the only option.

In light of all these developments, could you leave our CIOs with a few recommendations that they can adhere to while making their way into 2012?

Well given the current state of things, there are a few things that we can recommend to CIOs. First of all, we would highly recommend that CIOs look to innovate in the domain of customer engagement, using tools like social media. These tools have largely evolved and have become mature to appoint that CIOs can understand their customer behavior much better than they could ever had in the past. CIOs must also focus their technologies in a space where they can add immense value to the customer experience.

Now, given the fact that IT budgets stand to remain flat, we urge CIOs to innovate in this space and utilize their budgets effectively to drive new initiatives like social media and mobility. We want CIOs to Re-Imagine IT to bring about massive change and success.

Another finding that we have had is that although skill in India is aplenty, there is a blatant lack of application. Talent is sometimes not able to move beyind its core expertise to solve more complex problems. CIOs need to help this talent evolve and grow to appoint that they can add more value than being apure resource in the organization. This skills crisis must be solved