How do CIOs deliver value and prepare for what comes next?

Written by on December 4, 2015 in Features with 0 Comments

Deloitte’s 2015 Global CIO Survey has come up with some very interesting cross-industry findings. It received responses from over 1,200 technology leaders across 43 countries, including representation from over a quarter of Global Fortune 1000 organisations, giving a truly international perspective of the nature of CIOs role and legacy today.

Sculpting your CIO Legacy

The survey uncovered three different patterns that describe how CIOs are delivering value today – and how they are preparing for what comes next. These patterns provide a powerful approach to understand how CIOs must adapt to meet the dynamic requirements of their roles – and build a lasting legacy.

  • Trusted operators deliver operational discipline within their organisations by focusing on cost, operational efficiency and performance reliability. They also provide enabling technologies, support business transformation efforts, and align to business strategy. They spend more than 50 percent of their time on ensuring operational efficiency and rarely lead business transformation and growth initiatives.
  • Change instigators take the lead on technology-enabled business transformation and change initiatives. They allocate significant time to supporting business strategy and delivering emerging technologies. They focus about 40 percent of their time on driving complex business transformation efforts and 25 percent on delivering operational efficiency.
  • Business co-creators spend most of their time on business strategy and enabling change within their businesses to ensure effective execution of the strategy. They spend about 30 percent of their time on driving business strategy and innovation, then equally spread the remainder across the other three dimensions.

Think ecosystem, not industry

CIOs today are operating in an environment where industry boundaries are blurring, supplanted by forces within their ecosystem of allies, partners, customers, and even competitors. Internal company goals and external competitive pressures are now dictating priorities, and CIOs must be able to operate “outside-in” with regard to their industry context.

Globally, CIO business priorities were not confined to their industry; in fact, more than half of the CIOs picked one business priority different from their industry’s top three business priorities.

That said, it’s essential to put first things first. One CIO had this advice for his peers: “If you don’t fulfill basic performance expectations, you’re a sitting duck.”

Another CIO, who had come from outside his company’s industry, found he had an advantage in challenging the status quo. He said, “Being new to an industry gives you the license to challenge the norms. I often found myself asking the question, Why are we doing it this way?”

Only 9 percent of CIOs say they have all the skills they need to succeed

Ninety-one percent of CIOs in the global survey acknowledged lacking at least one key skill. Three skills with the largest gaps were the ability to influence internal stakeholders, talent management, and technology vision and leadership.

On the other hand, three areas identified as significant current strengths were not considered differentiating skills for successful technology leaders. These areas were operations and execution, ability to run large-scale projects, and leverage with external partners.

These gaps point to a general proficiency in ‘managerial’ skills and a relative deficiency in ‘leadership’ skills for CIOs.

Five business priorities dominate the CIO agenda

CIOs around the globe were nearly unanimous in identifying the top five business priorities: performance, cost, customers, innovation, and growth (Figure 1). These top priorities were consistent across industry, geography, and size of organisation. One understandable exception: Only CIOs involved in the public sector selected ‘cyber security’ over ‘growth’ as a top business priority.

Business priorities

Figure 1. Business priorities

CIOs have moved from leading a supporting function to managing a business function – they reported that business leaders expect them to not only contribute to the bottom-line business priorities but also to enable and even drive top-line initiatives. Many CIO respondents described simultaneously juggling business performance and growth objectives with IT cost reduction and efficiency improvement.

Industry emphasis across the top five business priorities

Figure 2. Industry emphasis across the top five business priorities

CIOs in the technology and telecommunications space rather surprisingly place Innovation and Growth as their highest areas of concern. (Figure 2.)

Strong executive relationships do not necessarily mean strong influence

Not surprisingly, CIOs identified CEOs, CFOs, business unit leaders, and COOs as their most important relationships. A majority of CIOs claim to have excellent or very good relationships with business stakeholders, but outside of this group, there is a long tail of relationships that need more attention. For example, only a third report strong relationships with sales and marketing executives. “A lot of CIOs listen to the business differently than they need to. They are trying to solve a problem as the discussion is happening instead of listening. It’s just like husband/wife communication: Sometimes you are hearing but are not listening,” said Mike Adams, CIO, Glazers.

Having good relationships, however, does not guarantee influence and credibility. One CIO advised that the four ingredients to build influence are “trust, credibility, consistency, and track record.” Our global data suggests that a majority of CIOs are not yet truly influential. Only 42 percent of the CIOs we surveyed were co-leaders in business strategy decisions and 19 percent in M&A activities.

Other significant findings

  • Despite the recent hype, 20 percent of all CIOs in organisations with revenue above $50 billion cited a relationship with the chief digital officer as most important compared to the global average of 12 percent.
  • CIOs in travel, media, and hospitality are most likely to interact with customers on a weekly basis (49 percent).
  • CIOs from the United States interact with end customers less frequently than CIOs from other countries.

It’s all about business value

When asked which technologies will have significant impact on the business within two years, CIOs unsurprisingly named analytics, business intelligence, and digital. What was surprising was that the definition, scope, and specific technology investments for each of these technology initiatives varied significantly from organisation to organisation.

For example, digital investments could mean anything from analysing customer data and developing new products and services to improving customer experience and enabling the workforce to better collaborate or be more productive.

Based on their industry, CIOs expect different technologies to have a significant impact on their business within the next two years.

  • Analytics: Seventy-seven percent of the CIOs selected analytics; industries with large customer bases and complex value chains such as manufacturing and construction were more likely to pick analytics as a disruptor.
  • Digital: Seventy-five percent of the CIOs picked digital, especially from industries that provide products to end consumers such as financial services, education, and consumer business and retail.
  • Cloud: Sixty-four percent of the CIOs picked cloud. Adoption is upending technology in many sectors, especially consumer business and retail; technology and telecom; and travel, media, and hospitality.
  • Cyber security: Fifty-eight percent of the CIOs picked cyber security. It matters especially where risks and trust collide, such as in financial services, energy, and government.
  • Legacy and core modernisation: Even though legacy and core modernisation was the highest in current spend, only 28 percent of the CIOs said it will have a significant impact on their business in the next two years. As investments in digital, analytics, and cloud increasingly depend on core systems, there is an opportunity to shift core modernisation from rote upkeep to establishing the foundation for more disruptive technologies.

deloitte-uk-cio-survey-2015-infographic

You can download the full report here.

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About the Author

About the Author: Tony is a freelance writer, regular speaker, MC and chairman for the telecoms and digital services industries worldwide. He has founded and managed software and services companies, acts a market strategist and is now Editor of DisruptiveViews. In June 2011, Tony was recognized as one of the 25 most influential people in telecom software worldwide. .

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