McKinsey’s third annual survey on information technology strategy and spending affirms the continuing importance of IT for strategic success. In this survey, we asked chief information officers (CIOs), chief technology officers (CTOs), and other C-level executives to think broadly about the impact of information and technology on their business: how IT can serve as a tool to help build competitive advantage, what risks arise as competitors use disruptive technology, how companies develop their IT strategies, and what challenges they face in implementing those strategies. Significantly, our survey reached respondents in October, after they had time to absorb the implications of the credit crisis and deteriorating economic environment.¹ This year’s spending expectations are notably, but not surprisingly, more conservative than last year’s.

Respondents highlight risks they face from information- and technology-based disruptions and the corresponding increase in importance of information and technology capabilities for improving business performance and outperforming competitors. Though improvements have occurred since last year, respondents also underline the need for IT executives to apply these capabilities more effectively in developing and executing business strategies.

CIOs and other senior executives agree that ideally these capabilities should, for example, promote innovation and better enable companies to seize new opportunities....