By Larry Lange

In response to the challenged global economy, CIOs are taking a fresh look at the economics of IT. Called "Techonomics" by some, this new approach is being used by CIOs to both maximize the value IT provides to the business and improve the IT cost structure. The larger goal: to not only weather the rocky economic times, but also discover new opportunities for efficiency, innovation and business growth.

Smart CIOs are finding ways to prioritize IT investments balancing both short- and long-term business goals. They are finding ways to improve IT economics by optimizing systems already in place, taking advantage of SaaS (software as a service) models and virtualization technology, and redefining their relationships with suppliers and partners. Many CIOs are also spending more money to support future business growth. They're establishing partnerships with their financial executives, too, having a real say in the boardroom—and simultaneously encouraging their staffs to innovate.

Such moves continue the shift of CIOs into business-leadership roles. "IT is the lifeblood of the organization now, and business recognizes that," says Alex Cullen, VP and Research Director at Forrester Research. "Business leaders no longer look to IT as the place to make savings; now they see IT as a way to make savings." Adds Scott Rosenberg, CEO and founder of Miro Consulting, an enterprise software adviser, "Over the past few years, top-tier executives are really 'getting' IT. In previous years, they saw it as a necessary evil. But that's not the case today."