CIO Survey 2015

CIO Survey shows dramatic growth in strategic focus

Jon Tullet
CIOs are in no doubt about the scale of the challenges they face, says Jon Tullett, ITWeb’s analysis and author of the CIO Survey report.
Last year, the inaugural ITWeb Brainstorm CIO Survey gave us unprecedented insight into the priorities and concerns of top IT executives within South African companies. This year, the second CIO Survey goes even deeper, with greater focus on key areas, exposure to more CIOs than before, and the comparative data from 2014 to show highlight emerging trends.

A great deal has been said of the CIOs struggle to transform into a strategic business leader, with resources aligned to the greater strategy of the company. That, combined with the growing need to deliver solutions quickly and flexibly, within tight budget constraints and a shortage of skills, is the perception of the average CIO’s workplace. Would the CIO Survey back that up with real data?

Very much so. Throughout the Survey, the responses in topic after topic emphasised the growing focus on business strategy and agility. Frustrations with suppliers unable to keep pace with those new demands were also voiced. And while budgets appear under less pressure than last year, they are still heavily constrained. Skills remain a key issue, but a positive note emerged: many more organisations are offering learnership and internship programmes than before.


2015 demographics

Size of Organisation Industry sector - Grouped

In 2014, we received entries from 158 CIOs and senior IT executives. In 2015, that grew nearly 20%, to 188 accepted entries. The breakdown of company size and demographics remained very similar: strongly skewed towards medium and large organisations, spread out across all industry sectors. In total 29% comprise large organisations (500 or more employees), 41% from medium-size firms, and 31% from smaller companies.

This year had a slight increase in commercial organisations (a catch-all grouping for professional services, retail, and others), and a comparable reduction in industrials. Financial services remains the largest single contributor, with 22% of respondents.

The changing CIO role

How is Your role changing
We asked CIOs how quickly their role is changing, and which factors are driving that change. Only 6% said their role is not changing at all - nearly a quarter (23%) said their position is changing drastically, in role, responsibility and expectation. With more than half feeling their job is changing faster than the industry norm, the perception must be misaligned, but that in itself is telling: whether it's grounded in reality or not, the sense of being under more pressure than the rest of the community is bound to take its toll. This is a stressful place to be right now.

We don't have concrete data to back it up, but the change in respondent data suggests a very high churn rate within the industry, with many respondents taking part last year, but with a different employer. This will bear greater scrutiny in the future: long term strategy should be in the hands of long term executives.

By far the greater factors in forcing the role change were digital migration (52%) and competitive and disruptive forces in the industry (51%). BYOD and shadow IT was also highlighted as a factor by 30% of CIOs. Relatively few pointed to the emergence of new executives, like CDOs, and the growing influence of CMOs and CFOs, which is positive.

Along with the shift in strategic focus comes a major improvement in the number of CIOs who feel they have credibility as a business partner. 39% strongly agreed, compared with 25% last year, and overall 87% agreed, compared with 79%.

On the CIO's mind

How is Your role changing
Asked to identify their top concerns, 2015 saw a reversal in priorities from 2014, with the same top four, but in different order. Last year, the top four concerns were regulation/compliance, lack of skills, budget, and the inability to deliver fast enough. This year, concerns over speed jumped from 61% to 77%, a stunning leap into first place reflecting the tremendous pressure CIOs are under to deliver solutions quickly. Skills remains second at 70%, budget in third, and compliance drops down to fourth.

Compliance concerns tends to be driven by large firms, and particular financial services, but there was no drop in the demographics of those groups - look for the full sector analyses in the Survey report for the inside story.

We also asked what areas take up the majority of the CIO's time, and the results were equally interesting. There is a tremendous jump in CIOs noting "aligning IT with the business" as their top use of time, up to 56% from 44%. Driving business innovation also rose by over 10%, up to 35% from 24%. There were notable drops in the time spent on monitoring systems performance and governance - less time keeping the lights on, more time saving energy.

Although lack of skills remains a top concern, recruiting stands out at the bottom of the chart - just 11% of CIOs saying this is a major use of the time.

Focus areas

Focus areas Focus areas

Last year we asked CIOs what their focus areas were, across the board. This year we split the question into three parts to get greater detail. As a result, the numbers from 2014 can't be directly compared, though the rankings can

We asked about focus areas in IT operations, and business continuity and security stood out as the top two (56% and 55% respectively). Last year, security scored lower than other operational areas lie infrastructure modernisation - this year it's right up there as a key focus.

In growth and optimisation, like last year, the top choice was supporting new business needs - developing solutions are the request of the business, rather than innovating directly. However, improving productivity also saw a big jump up in terms of priorities, and as you'll see, innovation is not being left behind.

We asked separately about focus within innovation, and the results show a clear uptick in process innovation, and healthy interest in developing the groundwork for innovation to take root. The IT department may still be primarily a supporter of innovation, there is a clear sense that it is positioning as the enabler, fostering and nurturing innovation across the organisation - what Gartner calls the internal VC approach.

Asked how that innovation takes shape, there was a definite shift away from just supporting innovation towards formal R&D, with more CIOs indicating they have specific processes, teams and budgets to drive innovation.

Barriers and hurdles

Barriers and hurdles
With that growing strategic focus, it is unsurprising to see a matching concern emerging. Asked to identify the top barriers to working effectively with business, there was a strong uptick in a concern with the lack of business discipline in using IT, well ahead of last year's top contended: the IT dept being seen as a cost centre.

Budgets look healthy

Budgets look healthy
We ask respondents how their budget for the current year is growing, and the forecast for next year. We combine the two to get a two-year forecast, and overall, the results are more positive than 2014 - 27% indicated they are beating inflation for the period, compared to 20% last year. And 29% are matching inflation, compared to 19% last year. So budgets are growing, though they have been under such pressure in the past that we still have a way to go before we'd describe them as healthy. In 2015 for the first time we asked respondents to estimate a percentage of the shift up or down - you'll see the full details of that and the 2014/2015 breakdown in the full survey report.

SA economy takes its toll

SA economy takes its toll
The downturn in the South African economy continues to cut into budgets - 56% of CIOs said they are tasked with finding cost savings across their organisations. Fewer (19% compared to 26%) said they are accelerating new lines of business to increase revenue. Although it's a small shift, it's nice to see a few less noting their budget is being slashed because of the weak economy.

Spending patterns

There were few changes in CIO's budget allocations this year. Infrastructure still takes up the bulk of spend, followed by software and IT services.

BI and analytics topped the chart of technologies being deployed inhouse, with security also climbing - infrastructure spend has been pushed down into fourth place. Unified communications, CRM, and astonishing growth in social media for business emerge as big winners in outsourced spending.

Spending patterns Spending patterns

Look to the full report for indepth breakdowns of spend within the different technology areas, both in-house and outsourced.

Supplier (dis)satisfaction

Supplier
With the shift in strategic priorities, one factor which emerges is that suppliers may be struggling to keep up. We asked for the most important factors in choosing a supplier, and then asked how satisfied the CIO was with existing suppliers. In many cases, the top selection criteria also reflect as the lowest areas of satisfaction.

Alignment with business strategy, long-term alignment, cost, and time to deploy come out as the top criteria, matching what we saw as CIO's strategic concerns. But longevity of solutions, ROI, and ability to adapt to new strategies are amongst in the top complaints.

Skills in short supply

Skills in short supply Skills in short supply

The lack of skills was a top concern, but recruiting was low on the use of time. Here we see why - budgets are under less pressure but 17% of respondents said hiring is frozen at their organisations. There's also an uptick in those seeking general-purpose practitioners, and a drop in those hiring specialists.

One major positive in this year's survey was a swing in the numbers of organisations offering internships. Last year only 31% said their companies ran internship programmes, this year it has increased to 57%, nearly double. There have been a number of industry initiatives to drive this number, including Brainstorm's own Isibani programme, and they appear to be making excellent headway.

About the survey

Brainstorm CIO Survey 2015, run in association with Telkom Business, was conducted online during August and September. It was by invitation only, targeting CIOs from SA's top 1 000 corporates, as well as public sector organisations.

More to come

This is the executive summary of the ITWeb Brainstorm CIO Survey, 2015. It reveals the key trends and overall data of the survey, while the full report explores the results in toto, including analysis of correlated trends and deep dives into each industry segment to identify their key differences and drivers.

To register your interest in the full 2015 CIO Survey report, click here
Or contact:
Carrie Waldeck
carrie@itweb.co.za
Tel: 0118073294

The 2014 results report can be viewed here.





VIDEO COVERAGE:
CIO Banquet 2015 ITWeb Brainstorm, in association with Telkom Business, launched the results of the second annual CIO Survey at a glittering banquet on 1 October 2015 at The Summer Place in Hyde Park.
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Telkom Business is proud to be associated with South Africa’s first, widely circulated and publicised Brainstorm CIO Survey. Telkom Business is part of Telkom SA SOC Limited, one of Africa’s largest telecommunications companies, providing integrated communication solutions to business customers across various sectors. With its combined offering of fixed voice, data, cloud and mobile capabilities, it is well positioned to be the converged ICT market leader. For more information, please visit www.telkom.co.za
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