Many CIOs are encountering significant obstacles with turning their strategic and innovative plans into new business practices and operations.
By Michael Vizard
The vast majority of CIOs want to be viewed as being strategic to the business. Two new CIO surveys, however, suggest that many CIOs are encountering significant challenges when it comes to turning strategic plans into innovative business reality.
A new survey of 560 senior IT leaders working at organizations with 500 or more employees, which was conducted by Emerson Network Power, finds that nearly half of CIOs consider themselves IT service providers or cost centers, rather than business game changers or strategic innovators.
At the same time, a new survey of 2,000 senior IT leaders conducted by the recruitment firm Harvey Nash USA found that 71 percent of CIOs believe the role of the CIO is becoming more strategic. Yet, only three percent of CIOs believe their organization’s innovation potential has been fully realized, down from five percent last year. Also, 69 percent of CIOs say they are spending too little time and too few resources on innovative projects.
“There tends to be a lot of frustration with what CIOs can do with the technology, versus what the organization will allow them to do,” says Harvey Nash USA president and CEO Bob Miano. “Of course, that will vary from industry to industry.”
Miano says the CIO of a media organization, for example, is clearly embedded in the business process while there tends to be a lot more distance between the CIO and the rest of business in a manufacturing organization.
But according to additional recent research from The Society of Information Management (SIM), the distance between CIOs and the rest of the business appears to be narrowing in the wake of the economic downturn and the continuing challenges many businesses still face.
“We’re seeing some monumental shifts in the IT-business relationship,” says Jerry Luftman, executive director for The Global Institute for IT Management, who also serves as the senior vice president of chapter relations and academic affairs for SIM. “It used to be the first place to slice the budget was IT, but this economic downturn has been significantly different.”
The SIM research shows that businesses are relying more on IT to reduce costs by making business processes more efficient, rather than simply cutting IT spending, says Luftman. “If anything good comes out of this economic downturn, it will be this profound shift.”
But making that change stick in any organization requires a business-savvy IT leader with excellent communications skills. “To be a valued member of the team, IT leaders need to be able to help build new products, open new markets and help change the direction of the business,” says Pat O’Connell, principal of the The Connall Group and a former CIO who now teaches an IT management class at Columbia University. “They really need to lift their heads up.”
In addition, CIOs need to be able to work collaboratively with other business leaders that are starting to exercise more control over IT spending. For example, the Harvey Nash survey found that 43 percent of CIOs say there is a degree of shared ownership of digital technology between IT and marketing teams. A growing number of CIOs also say that more than 10 percent of their budgets are controlled by groups outside of the IT department; 38 percent say that is true today, compared to 34 percent in 2012 and 26 percent in 2011.
“CIOs can either fight it or embrace it,” notes Miano of Harvey Nash. “But it looks like fighting it isn’t going to be a winning scenario.”
The biggest challenge, says Miano, often comes down to whether a CIO can communicate using terms that business leaders understand. “We see more CIOs getting MBAs because they really need to have better business acumen,” says Miano. “They’re also now a lot more polished, well rounded and personable.”