Business decision-makers and IT leaders are remarkably in sync with major business priorities, but with business environments changing rapidly due to digital disruption, two thirds of European business heads believe technology will be the central differentiating factor in their industry.
Those were some of the positive assertions for business technology leaders from the report What the European CEO needs from the CIO in 2014 by Forrester analysts Alastair Behenna, Pascal Matzke and Khalid Kark.
However, the authors also warned of “serious discontinuity between business expectations and IT performance”, as well as a growth of shadow IT and the willingness of business leaders to look outside their organisation for strategic technology solutions.
Indeed, despite 53% of business leaders responding the battlefield was now being fought in the technology arena, some 58% felt appropriate end-user support was lacking and 70% did not feel that IT had provided an enterprise -ready infrastructure that could flex to accommodate changes in business strategy.
Shadow IT and skills
In the worldwide study of over 3,000 SME business leaders, the authors reported that business units have “learned to engage externally with suppliers if they perceive unreasonable delays from internal IT. Therefore, IT needs to develop rapid response frameworks and flexible infrastructures if it wishes to remain relevant and necessary”.
Shadow IT is also being fuelled by a skills shortfall, with the horizon a hybrid of soft skills that build relationships and deliver projects, and hard-core skills like data science.
As such Forrester said: “Opportunistic suppliers are eagerly banging on the business’ doors to demonstrate their vision and capabilities. Worst of all for IT is that business leaders are just as eager to listen to the external pitch and overlook the incumbent department.”
The authors reported that “nobody cares about the uptime stats of systems they no longer depend on” – instead business decision-makers focus on customer retention and opportunity identification.
“This is the language of shadow IT and perilous to ignore.”
Customer and transformation
With IT moving ever closer to the business, CIOs will increasingly by measured by business performance, representing an “unprecedented opportunity to demonstrate leadership, broker a collaborative agenda, and craft the business of the future”.
CIOs who take the initiative in the Forrester-dubbed ‘Age of the Customer’, the authors said, “will beneficially disrupt from within to ensure relevance for both corporate IT units and their organisation as a whole”.
“Staying several steps ahead of demand and brokering effective services built on a solid yet transformative core will differentiate the IT leaders and IT departments of tomorrow,” the authors concluded.
Some 72% of respondents also said they evaluate success entirely or mainly on service levels as opposed to actual business impact, despite half saying ‘business transformation’ or ‘strategic alignment’ is the most critical way they use outsourcing partners.
“The finding does not surprise me. We have got to create a collaborative and insightful way of managing current performance, future performance, decision making and risk management of these contracts so that we reconcile IT performance and desired business outcomes.”
Davies also said that cost efficiency has always been a major driver with outsourcing, but other facets are gaining importance. “Cost efficiencies could be regarded as the ‘table stakes’ – you need it. But CIOs want to see innovation under the outsourcing contract and process improvements, after all outsourcing is here to stay.”
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