Recruiting, managing and training staff and managing budgets loom large on the CIO’s priority list

Management gurus often say that people are an organisation’s most valuable asset.
For IT directors they are not only the most valuable but they also cause the most headaches. Recruiting, managing and training staff is the most pressing concern for UK CIOs, moving up from third last year, leapfrogging aligning business and IT and managing budgets.

“People are right back on the agenda and are likely to be a major concern for at least the next 12 months,” says Darin Brumby, group IT director of bus and train transport giant FirstGroup. “Talent is very hard to find at the moment.”

Brumby thinks there are a couple of reasons for this change: offshoring and the changing nature of roles in the IT organisation. “The difficulty in finding good people could be one of the real impacts of offshoring. Where is the next generation of IT managers going to come from if coding work is done offshore? Also jobs are more complex and demanding, they need people whose key skills are broader.” The IT job market is quite lively at the moment, according to Simon Le Fosse, director at IT recruitment specialist Harvey Nash.

He also believes that IT jobs are becoming more demanding, with both technology requirements and the need for staff to be business facing. “Much of the IT management role is now about managing suppliers, compliance, contract laws – the business side of IT,” he says. “I think IT will start taking middle managers from the business as they have the right skills and don’t need to be able to program at that level.”

Making IT a more attractive career option could be an effective way of meeting the staffing challenge,
according to Le Fosse.

“Organisations should forget linear career progression and concentrate on competent, intelligent managers. If there is no coding funnel now because of offshoring, I think staff will be pulled from the business. The only bit they won’t have experience of is the technical background, which seems to be becoming less important," he says.

"Much of the IT management role is now about managing suppliers, compliance, contract laws – the business side of IT"

Simon Le Fosse, director, Harvey Nash

Strong leadership

Brumby believes that staff are motivated by their recognition, value and skills and in order to meet the objectives in managing their staff, CIOs need to create working models that reflect this.

“Strong leadership is essential,” he says. “So many people seem to be trying to get out of the IT department, which tells us about the perceptions other parts of the business have about the IT environment. It is part of our role to encourage good people in.”
Training and retraining have a large part to play in this, especially as organisations are changing so fast.

“Support has changed,” says Brumby. “People used to have three projects they were working on, now 12 is more likely.” But more organisations are using technological
and business process innovations to move ahead, which works well for recruitment as ultimately, IT staff are motivated by their value and skills. The best managers need to create role models and expose good staff to them, which will give them the different skills they need.

The onus is definitely on the IT director to be a great leader, so no wonder people have become the biggest concern among heads of IT.

“Motivation and training are important in this increasingly competitive market, because the traditional staff funnel driving it has changed,” says Le Fosse. “Universities and colleges could help by concentrating more on the analysis and project management skills from day one. Staff don’t have to do five years of programming to become a project manager.”

IT will have to be made more attractive and could even use more of an incentives sales approach, according to Le Fosse. “It is the old principal. Catch them doing something right, and offer incentives and recognition. Most companies consider IT departments are a bit beleaguered, so IT directors have to change that perception.”

"Motivation and training are important in this increasingly competitive market, because the traditional staff funnel driving it has changed"

Simon Le Fosse, director, Harvey Nash

Of course, the shortage of skilled staff and the competitive nature of the market is having an impact on salaries, and this sits next to the continuing worry of managing budgets.

Budgets are as tight as ever. In last year’s MIS UK research they were IT directors’ biggest concern, this year they are still up there as the second biggest issue. Since the last recession when IT budgets were pared to the bone, organisations have worked hard to keep a really tight control over them, even though they still need innovative IT to keep ahead of the competition.

At HSBC cost efficiency is still a big driver. IT operations expect a reduction in the unit rate of 10 per cent annually, apart from development costs. The IT operation is now in the top quarter of HSBC benchmarks for costs in the organisation in Europe, and the top half in HSBC Group metrics on service.

This is a common theme among CIOs. Their businesses want to see savings through standardisation of IT infrastructure, so that moving new systems ahead can be paid for without increasing budgets.

Productivity improvement

BA concentrates on improving productivity and its IT organisation has increased its productivity again this year, slicing £10 million off its operating costs, reducing its headcount by 50 and is still increasing the amount of work it is doing. “We are able to do it by delivering simpler technology and standard ways of building,” says CIO Paul Coby.

Getting rid of high maintenance costs is one way of achieving this. FirstGroup has reduced overall IT maintenance costs from 60 per cent of budget, down to 40 per cent over the last year, and BAE Systems has upgraded nearly 40,000 PCs to XP, which means big savings. “This full scale housekeeping has meant we have been able to address issues like applications – rationalising them from 17,000 to less than 1,300 – and storage,” says Chris Coupland, director of IT and e-business at the aerospace and defence giant. “The legacy will be robust, standard systems, which are easier to support, cost less to maintain and give us far more flexibility.”

Managing budgets is never going to be something that IT directors can take for granted, but there does seem to be a feeling that IT is becoming more expensive, so in order to move forward, efficiencies have to be made.

This, together with the standardisation and streamlining that it entails has to be a good thing for the industry, even if it does mean that budgets will be one of the things that keeps IT directors awake at night for the next few years.