CSC Smart Business UK Edition August - Outlook for the CIO
Outlook for the CIO
CSC’s 2011 CIO barometer polled CIOs from all industry sectors on a range of topics to reveal the trends and outlook for their role.
A recent CSC survey into the trends and outlook for the CIO function has revealed that for 72% of those polled, the main evolution in their role is their involvement in the broader business strategy. According to 88% the alignment of IT with corporate strategy is a top priority. There is also evidence of fewer worries about reductions in budgets and staffing levels.
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 its governance.
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, and thus value creation. CSC’s 2011 CIO barometer polled 160 CIOs from all industry sectors to shed light on recent trends and the outlook. Here we explore some of the findings.
Highlights
- 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%).
- 72% of CIOs consider identifying and developing key competencies to be a major challenge. The increase in competencies in terms of new technologies is one of the main aspects of this challenge (65%). More generally, competency and career management is one of the main concerns of 60% of CIOs polled.
- 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 competency 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 global energy company, AREVA.
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”.
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.”
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.
Evolution 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 of their businesses is even slightly on the rise (67% in 2011 compared to 64% in 2010).
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 insurance company, 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 of the 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 according to 9 out of 10 CIOs. This ranked just above quality of service provided at a reasonable cost.
- 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.
- 40% - Compared to the year before, fewer CIOs are preoccupied by the reduction in budgets and staff levels in their department (47% 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.
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