Organizations have moved from slashing IT budgets and questioning the importance of technology to recognizing the role of innovation for business strategy, according to Gartner's 2006 CIO Agenda.
The survey of 1440 global respondents, including 350 CIOs from the Asia Pacific region, found while global IT budgets have increased 2.9 percent (not including inflation), local business is spending 3.3 percent more on IT with the larger players raising the bar by 4.5 percent.
Gartner's head of executive program research, Mark McDonald, said the results show IT departments today are seen as critical business drivers with innovation increasingly player a bigger role. As a results IT budgets and responsibilities are rising.
McDonald said the top three CIO priorities are ensuring IT has adequate funding, is business savvy and can assist in solving problems more quickly.
"The notion of IT driving business growth has risen in priority over the last few years from number 18 to number one," he said.
"It would be easy to view these forces as creating the pretext for cutting IT budgets, however leading CIOs are taking the opportunity to change the conversation away from managing IT costs to increasing the yield on IT investments."
McDonald said the report found while the value of IT departments is sometimes questioned, CIOs are using IT to drive business growth through competitive advantage.
Gartner worldwide director of executive program research Andrew Roswell-Jones, said inadequate funding and skilled staff shortages were identified by CIOs as inhibitors to company growth.
He said innovation has a big role to play with business shifting from trial and error projects to structured pilot programs.
"We are seeing IT departments creating innovation projects by forming a hypothesis and trialling it in small market segments," Roswell-Jones said.
"They should look to their own customer data available on hand and formulate campaigns based on real information."
According to the report, business is investing in non-packaged solutions like business intelligence and mobile applications rather than off-the-shelf products, which Roswell-Jones attributes to a redefining of "agility" from quick response, to managed risk.
The former COO and director of operations and IT at information security firm Asguard, Jan Kolbusz, said such innovation is more widely seen in small competitive markets such as Australia.
"Smaller companies such as those in the Australian market are the greatest innovators because they are up against big global players," Kolbusz said.
"The methods that companies use to innovate need to change from reactive to calculated," he said.
Gartner identified analytics as the next big thing for enterprises between now and 2009.