Innovation: When CIOs Accelerate the Trend

News Article -- July 18, 2011

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Premium, CSC's business magazine | Summer 2011 | No. 16

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As decision making cycles accelerate, the role of the CIO is becoming that of safeguarding the agility of the organisation and helping determine its direction. It’s up to the CIO to gain insight into collaborative working, to adapt to 2.0 users, and confronted with these new technologies, to drive the development of IT governance. CSC’s 2011 CIO Barometer polled 160 CIOs from all sectors on these subjects and many others, to shed light on the trends and outlook for the function.

“Currently you need to have a sound understanding of the business strategy to be able to propose technological solutions that will help create value.”
Ahmed Bennour, Services and Information Systems Director at AREVA

In search of agility while emerging from a challenging economic period, businesses are increasingly using new technologies as drivers for making organisations more agile and intelligent. CIOs can and must favour the adoption of tools that make it possible to respond not only to organisational needs, but also to operational business requirements. In so doing they can boost the contribution they make to formulating strategy and to boosting operational excellence in the line of business, and thus value creation.

Highlights

Budget constraints: a brake on innovation

61% of those surveyed (compared to 47% in 2010) think that budget constraints are the main brake on innovation. This is far greater than mastering technological innovation and the results thereof (31%), and also much greater than the time and resources spent on handling incidents and urgent problems (46%).

The HR challenge

72% of CIOs consider identifying and developing key competences to be a major challenge. The increase in competences in terms of new technologies is one of the main aspects of this challenge (65%). More generally, competence and career management is one of the main concerns of 60% of CIOs polled.

Improving operational performance

Cost reduction, mass production, internationalisation – in order to improve their operational excellence, the businesses surveyed are optimising their procurement functions, with 54% further developing their procurement processes. 71% of CIOs mentioned the increasing of internal competence levels as a priority objective for boosting operational performance.

Value Creation

Today the contribution of the CIO to value creation is greater. “Currently you need to have a sound understanding of the business strategy to be able to propose technological solutions that will help create value,” explains Ahmed Bennour, Services and Information Systems Director at AREVA.

Improve employee involvement

CIOs need to take responsibility for opening the business up to new technologies that can be integrated into the line of business. With little effort, these tools make it possible to increase the commitment of staff and all parties involved in the processes of design, production and distribution of products and services – even if they are separated in space and time. In addition, social collaboration facilitates the identification of experts, knowledge sharing, preservation of know-how, rapid incident resolution and interactivity with customers – it’s an unlimited source of value.

Innovation

The CIO can help the business shift from a lighter organisation (thanks to cost reduction and process optimisation) to a more intelligent organisation, better able to anticipate risk and rapidly adapt to a changing financial, economic, political and technological environment. This can be accomplished by accelerating the adoption of new collaborative tools and new opportunities offered by cloud computing. For 78% of those surveyed in the CIO Barometer (compared to 59% in 2010), expectations on CIOs are now above all related to “their leadership in terms of innovation and value creation by way of new technologies”.

Ecosystem participation

Some businesses have understood this and are starting to transform their networks into participative ecosystems. However, according to analysts, by 2015, 80% of them will still not have implemented a coherent approach to information circulating in the social media. And this inertia might well deprive the business of certain opportunities. “These largely technological shifts present a challenge; they raise questions of security, governance and ownership,” states Claude Czechowski, President, CSC South & West Europe. “But they are enablers of excellence, innovation and agility. As such they are a real opportunity for both CIOs and the business.”

Alignment With Corporate Strategy

For 72% of the CIOs polled in the Barometer, the increasing involvement of the CIO in corporate strategy is the most striking development in recent years. “Our greatest challenge was to reinforce our alignment with the strategy of the business in order to avoid dissipating our efforts,” explains Frédéric Ribau, CIO EMEA at Yahoo. “In the last two years, the IT department has drawn much closer to the decision makers in every department, in order to think together about things far upstream in the processes. The goal is to develop projects aligned with the business and perfectly synchronised with operational needs.”

An asset: collective knowledge

This contribution of the IT department has been reinforced by a shift in business objectives, currently less focused on cost reduction or process optimisation than on collaboration, interaction and sharing. Indeed, businesses are hoping to draw on collective know-how to drive innovation and value creation.

Involvement in the Evolution and Functioning of the Business

Increased speed and agility is a must for all projects, and thus concerns all departments. According to the Barometer, the level of involvement of CIOs in change and evolution in the line of business is even slightly on the rise (67% in 2011 compared to 64% in 2010).

Focus on business priorities

In line with customer expectations in terms of responsiveness, companies are implementing new ways of working to improve collaboration and performance, and to boost the creativity of employees, regardless of where they work in the organisation. The focus here is on social media, Web 2.0 tools, smartphones, mobile internet connections and also new cloud computing applications. Tools whose implementation depends on the choices made by CIOs responsible for adapting the organisation and technology infrastructures while focusing on business priorities. “We need to work hand in hand with the line of business, speaking the same language, and getting involved with them in genuine reengineering projects,” asserts Richard Valenti, Deputy CEO and CIO of Generali France.

IT Department Trends

The CSC barometer figures that need to be kept to better understand current changes in IT departments.

72%

For CIOs, the main evolution in their role concerns their involvement in the strategy of the organisation; it is considered more important than changes or developments in the line of business (67%) and the acceleration of innovation (62%).

28%

The IT department is considered as a cost centre in less than one third of the companies polled.

88%

The alignment of IT with the corporate strategy is the organisation’s top priority in terms of governance, according to 9 out of 10 CIOs, ranked just in front of quality of service provided at a reasonable cost.

40%

Compared to the year before, fewer CIOs are preoccupied by the reduction in budgets and staff levels in their department (47% in 2010).

78%

Almost 8 out of 10 CIOs assert that they are making an increasingly large contribution to leadership in innovation and value creation thanks to using new technologies. The figure was only 59% in 2010.

62%

Network and telecom expenditures surpass all other items in terms of the budget allocated to them (62% compared to 49% in 2010). This may be attributable to companies moving to put in place new collaborative work tools based on social media and Web 2.0.