Business alignment, security, meeting project deadlines and improving their team’s capabilities are all top of the CIO agenda for the next 12 months, according to one of the most comprehensive surveys of UK CIOs carried out this year. The annual Harvey Nash CIO survey polled 519 UK CIOs from a range of industry sectors about issues like technology, outsourcing, their jobs and their careers. Its results suggest that the UK’s CIOs are in a confident mood but still have some serious concerns. Uppermost of these are continuing to ensure that IT is closely aligned with the business and that their teams are performing as well as possible.
Nearly 60 per cent of CIOs believe that IT is integrated with the business, compared to 43 per cent who thought so last year but that leaves just over 40 per cent who believe there is still work to be done. This suggests that while some CIOs have the full support of their businesses and are included in strategic decision-making, some are having to fight their corner. As if to emphasis this need for IT strategy to closely reflect business strategy, aligning IT with the business will be the top priority for the majority – 62 per cent – of respondents over the next 12 months. Although many feel that business strategy is already an integral part of their role, continuing to place an emphasis on aligning IT and business should ensure that further integration takes place.
“We should focus less on technology and things like network capacity and more on the business effect that technology can have,” he says. “Technology investments help my business to focus on therapy, new medicines and we have the ability to enable it in IT. Help them to understand that.”
Martin Schofield, IT and logistics director, Harvey Nichols, reflecting on the results of the survey thinks that the two are closely linked. “I believe that IT is part of the business – any business. Our IT department has become an internal consultant to the company. We have an end-to-end view of the business and a huge contribution to make,” he says.
CIOs also cited security as a high priority, with 41 per cent saying security was their main priority, compared with 39 per cent last year. The survey also discovered that 47 per cent of organisations now have a specific security post, with a further 7 per cent planning to introduce one.
The priorities clearly correlate with CIO UK’s own research throughout the year, where both aligning business with IT and security consistently come in the top five concerns of IT directors. It is highly unlikely that these two issues will become less of a priority over the next few years. There was also evidence that businesses are increasing their expectations of the IT function, as meeting project deadlines has become a top priority for 39 per cent of CIOs, compared to 28 per cent last year. Perhaps of greater concern to the industry though is that staff turnover, recruitment and development has gained in importance, by 10 per cent to 17 per cent from last year.
This is also in line with CIO UK’s research, which puts staffing issues at the top of the list of concerns.
David Taylor, business author and ex-CIO, believes that the whole idea of IT being a separate function is completely irrelevant to business needs today. “All discussions at board level should encompass all the business,” he says.
CIOs are having some problems in staffing their teams with the right people with the necessary skills, according to the results of the survey. Harvey Nash asked CIOs what capabilities they consider to be very important and then whether they would rate their team excellent at that capability. More than 80 per cent of CIOs believe that building and maintaining relationships with the business is very important but only 18 per cent think their team is any good at it. Similarly 63 per cent of CIOs think managing and delivering IT operations are very important but only 30 per cent believe that their team is excellent at doing it. While 58 per cent think that managing IT developments and programmes are very important but only 23 per cent thought their team was excellent at it.
This seems to illustrate one of the major concerns in the industry at the moment – the lack of good business and communications skills at the project manager, or middle management level of the IT department.
Ian Dobb, head of IS at Channel 4 believes staffing is critical issue. “One of the most important challenges in this more demanding environment is to recruit, develop and keep the right team,” he says. On a positive note, the survey found that IT budgets are likely to rise in line with inflation over the next 12 months, with the mean budget for those questioned at £7 million. Nearly half of the respondents have seen their IT budgets increase in the last year.
But cost reduction is still an important factor for the IT department to handle and some CIOs are turning to outsourcing as a way of ensuring costs are controlled. Less CIOs are doing outsourcing to meet the needs of the business – 36 per cent compared to 44 per cent last year – and those who are doing it to reduce costs rose from 22 per cent last year to 33 per cent this. There is a feeling from the responses received that the technology which adds business value is being kept closer, while more basic operations are likely to be outsourced to reduce the costs and this may well be a sign that the outsourcing industry, and CIOs’ use of it as a resource, is beginning to mature.
"“Technology investments help my business to focus on therapy, new medicines and we have the ability to enable it in IT. Help them to understand that”"
Both suppliers and analysts came in for criticism from the survey respondents. There seems to be a growing frustration that suppliers are not taking the time to understand CIOs’ business needs and who are still not providing adequate service levels. Understanding their customers’ business, level of service, integrity, flexibility and a partnership approach were the top five characteristics that were exhibited by preferred suppliers and comments from the CIOs indicated that they preferred suppliers who offer a human face to help them fulfil their roles. Analysts also warranted a fairly bad response in the survey. Nearly 40 per cent of CIOs did not use analysts and of those who do, 29 per cent said they had only minimal value.
This is also in line with research that CIO carried out last year, which found that heads of IT trust each other for good advice more than highly paid analyst companies. On technology just over half of the CIOs think that converged technologies are now mature enough to invest in, with a resounding 67 per cent investing time in them over the next 12 months.
AstraZeneca’s Williams thinks that outside advisors do have a role to play. “If you have a limited set of skills, analysts can offer help. They can validate decisions and offer help in complex or regulatory changes,” he says. “They can also help if time is short but we pretty much get what we deserve.”
The research also found that most CIOs are aware of corporate social responsibility with, 70 per cent of them believing that an ethical supplier policy is justified and 77 per cent believing that technology can play a significant role in bridging the gap between the developed and developing worlds. This probably reflects the current general socio-economic changes going on in society.
In terms of their own performance, responsibilities and roles over the next year, the hours are still long but most CIOs are feeling in a confident, satisfied mood. They continue to look for new challenges and responsibilities outside of IT, and in a few cases, like that of Betfair COO David Yu, have moved into the top CEO role. More than 80 per cent of CIOs that Harvey Nash questioned said they were happy in their roles but more responsibility and a wider remit would make them think about changing jobs. More than 30 per cent said a fresh challenge would influence their decision to change jobs, while 25 per cent said a greater involvement in business strategy would influence them. Robin Dargue, global CIO at Diageo believes it is right for CIOs to feel confident and positive. “It is a fantastic time to be in IT,” he says. “We have the right access to all of the organisation and can deliver great business benefits.”
Interestingly, life work/balance seems to becoming more of an issue for some CIOs as nearly 70 per cent work more than 50 hours a week, and of those, 23 per cent work more than 60 hours a week. Nearly 10 per cent of them said a better life work/balance would encourage them to change jobs.
On the whole CIOs are prepared to take on those longer hours if it means taking on more strategic responsibility and 76 per cent believed their role has become more strategic, compared to 67 per cent last year.
The majority of CIOs want to have a greater say in their organisations business strategy and this shows how the role of head of IT is evolving in a very positive way. CIOs are continuing to develop their careers by becoming integral to their organisation’s business strategy but there can be downsides. “Sometimes the price of a seat at the top management table is taking on broader responsibilities. However the risk is losing focus on the IT issues – and we all know that IT is of massive strategic importance to most businesses,” says David Burden, CIO, Royal Mail Group.
CIOs are not only already expanding their scope of responsibility – 64 per cent according to the survey – but 34 per cent of those who have not, would like to.
"“It is a fantastic time to be in IT. We have the right access to all of the organisation and can deliver great business benefits”"
Robin Dargue, global CIO, Diageo
The range of additional responsibilities cited by CIOs includes business change, customer service, logistics, purchasing, project management, facilities and information management. Clearly the position of CIO is evolving as technology becomes more of a utility.
There is also some evidence that the head of IT role is splitting into either a strategic CIO job with expanded strategic responsibilities or a more technical CTO one. But CIOs do have to be careful. Nearly 70 per cent of those questioned said they have overall responsibility for business continuity within their organisations and there is some feeling that heads of IT may be getting lumbered with areas that need input from all parts of the business, like business continuity, security and compliance.
Although historically the IT department has been in charge of disaster recovery where the emphasis is on restoring systems and data, today the business world is far more focused on business continuity, which involves departments like HR, FM, operations and logistics just as much. However, CIOs are defining their expanded roles by taking responsibility for some of their strategies as a whole.
The CIO agenda for the year ahead is changing but for once in a positive direction. Most CIOs say they are satisfied with their jobs, even though 60 per cent think they will move to a new job in two years or less. More than half of those polled for the survey had been with their employers between one and six years, while 8 per cent have been with their employer for less than a year. A third of CIOs are currently actively looking for new jobs. This seems to suggest a new confidence in the CIO arena, where heads of IT are determined to make the most of the opportunities presented to them to both expand their roles and to take on new challenges. However, they are still well aware of their day-to-day responsibilities and as well as their strategic challenges to meet the needs of the business, so they are keeping topics like business alignment, security and staff firmly in focus as well as the bigger picture and their own careers. The next 12 months should see the CIO role continuing to evolve to reflect IT’s strategic importance to the business, and heads of IT take on more interesting challenges, whilst still keeping fundamental business operations
A word from the wise
The CIO survey findings were discussed at London event by a panel of CIOs – Robin Dargue, global CIO, Diageo; Richard Williams, group CIO, AstraZeneca; and David Taylor, former CIO and business author.
1) On IT’s heavy use of external advisors.
Robin Dargue: “Do other departments spend as much on external advice as IT? Probably not… we’re fools unto ourselves.”
Richard Williams: “It demonstrate a lack of confidence… as though it validates, adds more meaning and oomph to the CIOs thoughts. But it impacts the rest of the organisation and how we engage with it.
“Use of external consultants is valid but CIOs should do project X to drive real added value but bring in consultants to do Y, to implement regulatory changes, for example or in areas where they have little experience but the thing is a must have.”
2) On managing outsourcing and suppliers
Robin Dargue: “Understand the core value and then the rest is up to you. Big IT deals are not the greatest plan. Retain the core value and key people and don’t take out the crown jewels.
“It’s easy to beat up suppliers but it’s sloppy practise. Braver people look for alignment and work towards achieving a joint set of goals. Don’t forget the vendors also need to make profits. They also have to report to their own boards and shareholders.”
3) On innovation and consumer power to affect change
Robin Dargue made the point that increasingly rigorous regulation of advertising is affecting the traditional means of communication between drinks giant Diageo and its customers: “Most of our markets are going black, with increasingly limited means or no advertising on billboards, paper and television. We have engaged with consumers via YouTube. We are going digital.”
Richard Williams: “The number of iPods sold is huge. From our perspective can we use that technology to disseminate information to people about therapy and treatments or messages from their GPs. For example, we can use consumer devices to communicate to them about cholesterol management therapies and educate them.”
4) How can CIOs best leverage the often thorny CEO-CFO-CIO relationship?
Robin Dargue: “Authenticity. CEOs aren’t stupid people and they can see through smoke and mirrors.
Richard Williams: “Transparency. Credibility is established over time by being transparent about initiatives, risks, successes and failures. The CEO knows which individuals will tell him the truth.”
David Taylor: “Identify the power players, especially the CEOs’ PAs and other PAs throughout the organisation. Learn to be very, very nice.”