Digital change and the CIO

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(Source: Stockfresh)

8 October 2015

Marketing’s meteoric rise as a technology investor and user in this year’s report again reflects how important customer engagement and experience management is becoming in modern business. Fifty-seven per cent of all respondents said marketing has budget specifically earmarked for technology product and services investment in the next three years, a clear functional leader.

When it comes to cross-functional partnership, it is not all smooth sailing, however, and 51% of CIOs admitted to currently fighting a turf battle with at least one c-suite peer. Sixty per cent also saw IT still being the scapegoat for other departments when they miss their own goals, and 53% are convinced IT is seen as an obstacle by other lines of business.

CIOs know it is a problem, which is why engaging business stakeholders more effectively remains the top action most important to elevating’s IT general relationship with the rest of the business for the second year in a row. Creating quick wins for business partners and training IT staff to work better with business stakeholders was in the top five actions cited by CIOs in 2015, as it was in 2014.

Technologies of change
A number of the key technology initiatives driving IT investments this year showcase the speed, agility, mobility and customer engagement quest organisations are on.

Cloud services were cited by almost 50% respondents as being a key initiative driving technology investment this year, leading the list of technology priorities.

This was followed by mobile technologies (39%), big data and business intelligence (36%), application modernisation (36%), and customer experience technologies (32%).

Mitchell also saw cloud’s dominance on this list as indicative of businesses getting more comfortable with the concept of cloud computing.

“One of our new innovations will be utilising cloud [infrastructure]. We have no choice based on how we want this product to operate and to do this internally wouldn’t have made sense,” he says.

Griffith Hack has also moved all of its data backups to the cloud, a ‘cost-neutral’ environment that has freed up staff to get on with more innovative work, Mitchell says.

At APG & Co, IT investment is shifting from large capital outlays to more regular operational expenditure based on cloud services. The retailer’s cloud utilisation has risen this year with payroll, time and attendance and e-commerce systems now in the cloud. The company will then move to Office 365 in a project due for completion in February.

“We are taking the approach of identifying what we can’t use as a cloud service first rather than looking at which in-house option is the best option,” says Kennedy. “In our world [retail], speed is important.”

Current and future state
Alongside technology specific priorities, CIOs this year were asked about the activities that best characterise their focus and how they are spending their time currently, versus expectations of the role in the medium-term.

Figures showed a huge emphasis on implementing new systems and architecture, which is not replicated in the next 3-5 years (54% versus 28%), a further pointer to the transformation agenda now in place. Also, while half of our respondents are focused on improving IT operations and systems performance, less than a third expect to be doing so in 3-5 years’ time.

This result was reflected in the top priorities CIOs are being set by the CEO, a list that was again led by completing a major enterprise project this year, followed by simplifying IT.

In addition, there’s a higher percentage of change management facilitation being undertaken by CIOs, with half of all CIOs currently involved in these activities (49%).

All of these figures point to the fact that CIOs and their CEOs know it’s time to put the hard yards in and get the right IT platforms and processes in place for future competitive advantage and differentiation.

Many CIOs also expect their current focus on managing IT crises will have decreased over the next few years. While 28% see this as part of their focus today, only 10% expect it to be so in the future. While there’s certainly a bit of wishful thinking in these responses, what the result also suggests is that the shift to cloud services could see such potential headaches either placed into third-party hands, or removed altogether.

The emphasis in the next 3-5 years will be developing new go-to-market strategies and technologies (rising by 9% to the next 3-5 years), as well as identifying opportunities for competitive differentiation (up 12% in 35 years compared to currently).

Against this, what the State of the CIO report does consistently show year-on-year is there is still a way to come before IT is holistically viewed as a value and growth driver for the business over cost. This year, 19% still say they are perceived as a cost centre in the business, underappreciated, misunderstood or unfulfilled.

However, there has been a steady year-on-year decline in the number of CIOs who believe they are perceived as a cost. This year’s result was down 4% down on 2014, 5% on 2013 and 14% on 2011.

Let us hope with all the work on innovation, this decreases again next year.

 

 

Byron Connolly and Nadia Cameron, IDG News Service

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