IT investment, like so many other parts of a business, goes in cycles.

In many organisations, a period of boom – when new projects are started and emerging technologies are introduced – is followed by a bust, when consolidation and budgetary control are the priorities.

The past few years have been one long bust for a lot of companies. Cost control and budget cuts became the norm, and IT was in danger of being a pretty gloomy place to work.

But in the past 18 months or so, chief executives have returned to a degree of optimism and are cautiously loosening the purse strings to allow IT leaders to take on new strategic initiatives.

In boardrooms everywhere, the word on directors’ lips is innovation – however, they do not mean spending on research and development, but finding new ways to improve the organisation through innovative uses of technology.

For chief information officers (CIOs), this has created a whole new dichotomy where boom and bust merge into one.

The big challenge is to manage the apparently conflicting demands of spending less, but innovating more, simultaneously.

As our cover story this month shows, smart CIOs are finding ways to fund new initiatives as a direct result of cost-cutting projects that seek to maintain business-as-usual more efficiently, effectively and cheaply.

Much of the old boom and bust era was generated by the pace of technological change in IT suppliers.

Every few years we had a new ‘next big thing’ that led to a new round of spending to keep up with the Joneses, followed by a period of retrenchment, often to make the new big thing work properly. Just think of all the acronyms you have spent years implementing – MRP, ERP, CRM, and so on.

But today, there is no next big thing. There are, however, any number of proven, well-established technologies and trends that offer the potential for great innovation in business processes at low risk and manageable cost – voice over IP, broadband, service-oriented architecture, mobile computing, to name just a few.

The days of buying the latest product simply because it is the latest product are over, and as a result CIOs can finally take charge of the investment cycle and better balance the need to manage cost while innovating to improve.

This is where the best IT leaders will make their mark.