During the transition from one year to the next, most of us take time to reflect on what went right and what didn't live up to expectations. The hope is that some epiphany will result that provides a clear direction or set of resolutions for the coming year.

As it relates to the intersection of business and technology, the impact of a slow economic recovery, an unstable geopolitical landscape, and the realization that technology has not delivered solutions as advertised dictates that a focus on squeezing more out of current investments and saving costs will continue to underlie IT decisions. The analyst firms tracking IT spending are predicting flat to slightly increased IT spending in the coming year.

The resolve to reduce costs--a carry over from the past two years-- doesn't signify that corporations are not investing in technology or looking to drive innovation. We conduct a monthly poll of a panel of our readers across ZDNet and TechRepublic to gauge the concerns of IT managers at larger corporations. The latest survey indicates that cost reduction is factor, but not at the top of the list of planned initiatives for this year:

Networking upgrades: VPN, wireless, VoIP, WAN

Enterprise software: ERP, directory systems, groupware

Web technologies: Web services, e-commerce, intranets, application interface technologies, site development

Server opportunities: Consolidation, upgrades, SAN storage

Cost reduction: Cost controls, process improvement, strategic planning

OS migration: Windows 2000 and XP migrations, Linux

Data management: Business intelligence, database systems

Security: Intrusion detection, disaster recovery, authentication

Application development & integration: EAI middleware, Java

Cost reduction sits in the middle of the pack, which is appropriate. It should be a fulcrum that balances all other priorities. Focusing on cost reduction without systematic analysis, however, is a quick way to undermine any current or future advantages that IT can bring to an organization.

In fact, an overemphasis on cost reduction rather than cost control or efficiency can lead down a slippery slope. It's a subtle difference in terminology, but one that can have major implications in the decision-making process. Reducing costs is a legitimate and necessary goal, but it shouldn't be an overriding force that encourages blindly hacking away at costs. Each initiative should be scrutinized for the value it can deliver in terms of efficiency, competitive advantage, and profits, as well as the interdependencies in a particular set of initiatives.

If you are looking for some insight into key trends, Gartner recently published a set of 2003 to-dos for CIOs that focuses on some of the macro trends, such as piloting Web services and IM projects, turning off 10 percent of legacy systems, developing a roadmap for a more real-time enterprise, renegotiating supplier contracts, and preparing for the impact of offshore sourcing.

These are worthwhile directives, and complementary to the planned initiatives we gleaned from our corporate readers. The challenge for any initiative is in executing against the goals and delivering a return on the investment within six to twelve months. The last few years of tough economic times and concomitant inward look at the value proposition of technology have created an environment in which the tolerance for failed projects, cost overruns, dysfunctional management and other IT maladies should be close to zero. In many corporations, business executives are fed up with the inability of ERP, CRM or other initiatives to deliver payback. They no longer take at face value the notion that IT is a way to create competitive advantage.

In this context, I have a few simple resolutions or ideas to offer that address how to restore the reputation of IT. Although these resolutions may seem obvious, they are the Achilles' heel of IT. Deal with these foundations, or get ready to flounder even more in 2003.

Resolution #1: Create a formal IT architecture, a blueprint that lays bare the current IT infrastructure and provides a basis for evolving it in a step-by-step manner.

Resolution #2: Devise a clear set of priorities for IT spending that deal with systemic issues rather than slapping on Band-Aids to staunch the bleeding of a myriad festering problems.

Resolution #3: Create teams built around delivering specific solutions, not around technical or functional departments. These teams include not only internal staff, but also external suppliers, partners and consultants, who should be contractually held to the same set of goals and performance metrics.

Resolution #4: Build a collaborative environment physically and mentally. Develop the infrastructure and tools to enable fluid teams and a more mobile workforce, as well the culture to foster a collaborative workstyle.

Resolution #5: Understand what you can do extremely well and focus your teams and efforts on those areas. Outsource other core functions to external providers who are integrated into the collaborative infrastructure.

Have you prescribed any resolutions for 2003? What will be the major issues and milestones for this year? Tell us and we will publish some of your resolutions in a future edition of Tech Update Today.