By Jack Rosenberger
IT is experiencing a historic period of “profound change,” according to the preliminary results of “35th Annual SIM IT Trends Study,” which were announced by The Society for Information Management during a media roundtable earlier this week. The report’s high-level results include how the role of CIOs and IT is evolving, IT budgets and leading investments, how CIOs spend their time, and the priorities of organizations and IT leaders.
“Business is changing, IT is changing and technology is changing,” said Leon Kappelman, the study’s lead researcher, who also emphasized the unprecedented speed at which these changes are occurring for IT, business and society.
The SIM IT trends survey is based on the responses of 1,002 IT managers and leaders at 717 organizations. Of the respondents, 451 are CIOs. The organizations’ average annual revenue is $5.6 billion, with an average IT budget of $288 million.
Another key trend highlighted by the survey is “enterprise optimization,” says Kappelman, a professor of information systems at the University of North Texas. “IT organizations are not focusing on cost cutting like they used to be,” but instead their focus today is on how to create value for the business.
The full report will be released prior to SIM’s national convention in Denver, Col., in early November. The chief preliminary results include:
IT Focuses More on the Business, Less on Internal Services
The concept of IT in the enterprise is in a period of transition, as IT for many organizations today is less about directly providing internal services and more about driving the business and contributing to business strategy, noted Kappelman, citing the survey results.
Of the top 10 performance measures for CIOs, the top four (value of IT to the business, IT’s contribution to strategy, customer satisfaction, and innovative new ideas) are business oriented, not IT oriented, according to Kappelman. Performance measures five through seven are IT oriented (availability, projects delivered on time, and IT cost controls), but the rest of the top 10 fall in the business category (productivity improvement, business cost reduction controls and revenue growth). In summary, seven of the top 10 performance measures for CIOs relate to business, not IT.
IT Spending Increases—And the Cloud Benefits
IT budgets have increased among the respondents for the fourth consecutive year, with the percent of revenue allocated to IT reaching 5.14 percent in 2014, a slight uptick from last year’s 4.95 percent.
The top five IT investments are analytics and business intelligence, data center infrastructure, enterprise resource planning, application software development, and cloud computing.
The amount of money being invested in cloud computing and data centers is “huge,” Kappelman said. “Today, 10 percent of IT spending among the respondents is cloud—and it’s a growing amount.”
Top Leadership Skills Are People Skills
When asked to name the top 10 skills for CIO success, the respondents overwhelmingly named people skills, not technical know-how, as being most vital. Note that “emotional intelligence,” for example, grabs the number seven spot in the below list.
The leading 10 skills for CIO success are:
- Provide leadership (35%)
- People management (30%)
- Strategic planning (24%)
- Decision making (24%)
- Verbal communication (21%)
- Collaboration (21%)
- Emotional Intelligence (16%)
- Honesty (16%)
- Business analysis (12%)
- Change management (12%)
These skills are “all about leadership and management,” Kappelman said. “None of them are technical.”
IT Talent Comes, IT Talent Goes
In an effort to retain their IT talent, CIOs have increased their spending on employee training and education for the second consecutive year, with a slight bump to 4.99 percent in 2014 from 4.68 percent in 2013. This spending is justified in view of the “very high turnover in IT,” said Kappelman, who pointed out the employee turnover rate among the respondents was 8.97 percent in 2014, which is significantly higher than the 10-year average employee turnover rate of 6.26 percent. Overall, CIOs themselves enjoyed a slight increase in job tenure, from an average of 5.20 years in 2013 to 5.41 years in 2014.
Get Ready for a Busy Tomorrow
Looking ahead, both moderator Brian P. Watson, co-author of Confessions of a Successful CIO: How the Best IT Leaders Tackle Their Toughest Business Challenges, and Kappelman agreed that the one constant for CIOs and IT departments in the near future will be a faster pace of, well, almost everything.
“We’re seeing much more velocity with change in IT not only in terms of the types of technology being introduced, but also in turnaround times and how quick something can be done,” Watson said. “Today, IT projects are expected to be completed in three months, not three years.”
The advent of the always-on pace and often hurried of IT is due to a multitude of factors, including widespread connectivity and the Internet’s role in business and society, the widespread usage of smartphones and other mobile devices, and the emergence of cloud computing as an increasingly reliable utility service.
“The pace will continue to increase in every field,” said Kappelman. “Look at how the media and education have changed. They used to say, ‘Speed kills.’ We can’t say that anymore.”
About the Author
Jack Rosenberger is the managing editor of CIO Insight. You can follow him on Twitter via @CIOInsight. To read his previous CIO Insight article, “The Problem With Online Financial Fraud Prevention,” click here.