The Harvey Nash/KPMG CIO Survey is the largest IT leadership survey in the world. Now in its 18th year, this year’s survey includes the perspectives of 3,352 CIOs and technology leaders across 82 countries.
The 2016 survey results have a lot to say on the evolving role of today’s CIO. Most importantly, we see a number of statistics supporting a trend many have identified in tech for the past several years: CIO’s are increasingly expected to play a bigger role in the overall digital strategy and profitability of the company, not just in “keeping the lights on.”
As CIO’s are becoming more strategically, rather than operationally minded, how they work, who they collaborate with, and what skills are most important to the role also begin to change. Here are some of the key findings from the report.
CIO’s priorities are shifting from saving money to making money.
Survey results found that the CEO is now the most likely role within a company to “own” digital, at 21 percent. With the majority of CEO’s (63 percent) also now believe that IT projects should focus on making money, rather than the traditional role of saving money (37 percent), it makes sense that more CIO’s (34 percent, a 10 percent increase over last year) are now reporting directly into the CEO. Rather than having IT function within its own bubble, prioritizing operational efficiency over anything else, the CEO and CIO are increasingly expected to work side by side in making core business decisions about the digital landscape of the company.
According to those surveyed, the importance of increasing operational efficiencies has dropped noticeably over the last four years (by 16 percent) including an astounding 27 percent drop in the importance of delivering stable IT performance (once the foundation of a CIO’s role.)
Moreover, CIO’s are actually pretty happy with this shift, with 87 percent of CIOs working under a CEO (rather than COO or CTO) reporting job fulfillment (the highest of any group.)
CIO’s are working more cross-functionally.
The time a CIO is spending internally focused on managing IT specific goals is reducing while the time they spend working with colleagues from different departments and even customers are increasing. 40 percent of CIOs surveyed said they spend at least one day a week working outside IT.
This trend is even more apparent in smaller businesses, where CIO’s are more than five times as likely to spend the majority of their time working on external-facing projects such as developing stakeholder relationships and growth strategies, instead of traditional IT functions like systems and infrastructure.
As KPMG International global CIO Advisory Service Network Lead Lisa Heneghan explains, this data “supports the view that the role of the CIO is becoming more strategic – there is a need for CIOs to talk business strategy and provide a platform to enable this.”
Adam Woodhouse, Director of CIO Advisory at KPMG, argues that the rise of specialized digital roles such as the CDO (chief digital officer) and the CTO has given CIOs “a jolt to recognize that to be relevant and support growth they cannot focus on their own world in isolation.”
CIO’s must become agile.
Even though a CIO’s emphasis is shifting away from straightforward operational efficiency, this doesn’t mean CIO’s can skimp on their technical expertise. In fact, 39 percent of respondents believe there’s a huge skills shortage in big data and analytics functions, up from 36 percent the year before. And almost two-thirds (65 percent) of CIOs say they believe a lack of talent in these areas will prevent their organization from keeping up with the pace of change, a 10 percent increase in just 12 months.
“It is a given that the lights must be kept on, but we have seen from the survey an increasing emphasis on supporting business growth, and agility is fundamental to this,” Woodhouse explain.
The cloud is a ‘core element’ of driving an agile methodology (a principle based on failing fast and learning from every error.) 69 percent of large organizations surveyed reported expecting to make a ‘significant’ investment across infrastructure, platform, and software as a service in the next three years to increase agility.
“When we asked what steps CIOs are taking to make their business more agile, there was the obvious top answer of implementing agile methodologies, but a clear second place was given to implementing SaaS solutions.”
“The role of the CIO is becoming less defensive and more proactive in stimulating debate on what technology can bring to the organization and benefit its customers,” Heneghan claims. “Therefore I see the relationship becoming more balanced and the dialogue two way, rather than the CIO always responding to requests or issues.”
Albert Ellis, CEO, Harvey Nash Group says, “Whilst the Harvey Nash / KPMG CIO Survey reveals the CIO is enjoying unprecedented influence, it also shows the role is being stretched in many directions. From grappling with an increasing cyber security threat, to working with the board on innovation and digital transformation, CIOs in 2016 are dealing with a more varied range of challenges than ever before, many of which are far, far away from traditional IT. Adaptability, influencing skills and an ability to keep a clear head in uncertain times are becoming increasingly important business skills for today’s CIO.”
CIO’s are outsourcing more, and it’s not just to save money.
Typically, companies outsource to save a few bucks. This year’s survey supports a fundamental change in the reason companies, and especially IT, outsource: respondents claim their primary motivation is a demand for certain skills and flexibility.
Not only are their motivations changing, but so are their budgets. In fact, half of CIOs (50 percent) say they will increase their investment in outsourcing this year, up by four percent from 2015. And 10 percent of CIO’s at small organizations will rely on contingent staff for more than three quarters of their team (five times higher than the rate CIOs at large organizations.)
The influence of the CIO will continue to grow.
Some reading this report may initially wonder if the job role of the CIO is becoming redundant as more digital focused, C-suite executive roles (i.e. CDO) are created, but the report squashes this worry. The proportion of CIOs sitting on the executive board or senior leadership committee is actually at its highest level in 11 years, with more than two thirds (67 percent) of respondents expecting the strategic influence of the CIO to go up in 2016.
As for what 2017 will bring, Woodhouse sees no reason this trend should slow down. “I expect the strategic importance of the role to continue to increase, and as such we will see CIOs spending even greater amounts of their time outside of the traditional fortress [of] IT,” he claims.
“We know that cloud adoption will continue to develop and this needs to be integrated with business strategy to truly drive differentiation – I will be interested if skill shortages in this area hamper CIOs delivering,” he adds. “We also absolutely expect to see an increase in the adoption of digital labour strategies which may displace the broader ‘digital’ strategy question.”
In summary, Heneghan adds, “We are on the cusp of a significant development in the 4th Industrial Revolution. This is driving new demands on the CIO and we are seeing the evolution of a ‘Creative CIO’ who is both a technology and business strategist, and a business model innovator. This Creative CIO is moving away from ‘keeping the lights on’, to enabling the business to create value.”