“One in Six CIOs Don’t Know Where Disruption Will Come From”

CIOs pulled between opposing imperatives of maintaining legacy IT and building new money-making systems need the judgment of the fabled King Solomon if they are to make the right calls. A minority – perhaps because of this dilemma – do not know where the next disruption will come from. More positively, one third are now charged by their CEO to generate income through transformation.

A trio of top line figures from this year’s KPMG/Harvey Nash survey, which polls 3,352 worldwide IT chiefs worldwide, underlines the CIO’s journey from operator to creator:

  • 34% of CIOs now report to the CEO, the largest proportion in the survey’s 18-year history
  • 57% of CIOs now sit on the executive board, or senior leadership committee
  • 67% of CIOs interviewed expect their influencer role to increase during 2016

For Adam Woodhouse, director of CIO Advisory at KPMG, a highlight was the emergence of cloud as the vehicle of organisational transformation and the main driver of IT. Optimisation of pay-as-you-go infrastructures releases cash to be further invested in innovation, and he reported that a majority of companies were looking to make those investments over the next three years.

Most significantly for the new, creative CIO, reporting to the CEO enhances their ability to develop ‘very strong’ relationships with other business functions. The relationship that benefits most from the IT leader reporting to the CEO is with marketing, 25 per cent better. Sales rapport also improves by 19 per cent with the CEO reporting line. The relationships that don’t improve with the CEO direct report are with finance, legal and compliance, according to the survey.

However, added Woodhouse, the upbeat finding has a sting in the tail once other conclusions of the survey are considered: cross reference the predicted 31% increase in Software-as-a-Service with the 65% of CIOs who report they lack the in-house skills for transformation and “that rings alarm bells,” he said.

Related Article: Collaborative Approach Creates Winning Strategy in Digital Disruption

The main impediment to the CIO of large enterprises are their necessary involvement in the legacy back-end systems. Plus, the age and size of a company has a bearing on digital nimbleness. Companies under 10 years adapt more quickly to business challenges and opportunities by buying services in from the cloud. “They can act without the drag of legacy,” explained Woodhouse.

However, for the enterprise CIO, these problems are surmountable if he or she can forge strong relationships across the board, said Woodhouse. “Successful digital transformation is not only about the CIO being the conduit for transformation, but enabling CxO peers to focus on CX and customer engagement.”

Companies’ digital capabilities are maturing and 35% have developed a digital strategy. On the pressing question of where digital disruption comes from, 27% reported from the creation of new digital services and a further 23% from new types of customer engagement. Alarmingly, 17% didn’t know where disruption comes from.

Ironically, this lack of anticipation by one in six CIOs could signal that they are spending too much time on board-related matters and internal business to the detriment of spending time with customers. On the plus side for CIOs, however, more are being asked to take care of the digital agenda by their CEOs.

A related trend that impacts the CIO’s fortunes is the rate of CDO appointments and this appears to be slowing. With 19% of CDO appointments reported this year compared to last years’ 17%,  one interpretation is for the continued growth of the Digital chief’s role but at a slower pace: last year CDO appointments grew by almost 150 per cent from 2014.

To end this summary on a happy note, a whopping 84% of CIOs reported that they are fulfilled in their role, proving that the intellectual stimulus and pressures of fast pace digital is a recipe for happiness. And the happiest CIO’s of all?  They’re in the charity and non-government sector.

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Also by Helen Beckett.

welcome-feature-imageHelen Beckett is the Community Manager of the Business Value Exchange. She has been a writer and editor for over 20 years and takes a particular interest in the challenges facing the CIO in today’s business climate.