Only 16% of IT budgets are allocated to investments in innovation and growth

While 45% of CIOs identify “innovation” and 44% point to “growth” as their organizations’ most important priorities, only 15% are investing in emerging technologies . Only 16% of IT budgets are allocated to investments in innovation and growth, with the balance spent on running day-to-day operations and incremental change.

This gap between aspirations and reality is one of the key findings of the just-published Deloitte 2015 Global CIO Survey. The study is based on interviews with 1,271 CIOs from 43 countries, with the majority of the participants working for organizations with revenues of more than $1 billion.

Figure 7 Deloitte CIO survey

“Every company today is a technology company,” says Khalid Kark, U.S. CIO research director at Deloitte Services, and the business priorities reported by CIOs are the same regardless of industry, geography, and company size.  All companies are embracing digital technologies and see them as critical for their future.

The study uncovered, however, differences in how CIOs see themselves, what is expected of them, and how they would like their career to progress.  In contrast to other surveys that focus on spending priorities, the Deloitte study is mostly about different roles CIOs play today in their organizations and the impact they would like to make in the coming years.

The CIOs were asked detailed questions along the four dimensions that frame the impact of a CIO—the organization’s priorities, competencies and strengths of the CIO, building relationships internally and externally, and technology investments. Here are some of the more interesting results of the survey:

Only 9% of CIOs say they have all the skills they need to succeed

CIOs have to be ambidextrous, mixing business strategy skills with operations management: Out of 12 leadership capabilities, CIOs selected six as the most important for success in their role—influence with internal stakeholders, communication skills, understanding strategic business priorities, talent management, technology vision and leadership, and the ability to lead complex, fast-changing environments.

CIOs think they need especially to improve their leadership skills

The CIOs were asked to select the top five competencies that a successful technology leader need and to identify their own top five strengths. The skills with the largest gaps were the ability to influence internal stakeholders, talent management, and technology vision and leadership. Conversely, CIOs think they are strong in operations and execution, ability to run large-scale projects, and leverage with external partners but do not consider these as differentiating skills for successful technology leaders.

Figure 3 Deloitte CIO survey (1)

Strong relationships with other executives do not necessarily mean strong influence on the business

48% of CIOs report “strong relationships” with their CEO and interaction at least once a week, and an additional 17% report daily interactions.  But only 42% of the CIOs were co-leaders in business strategy decisions and only 19% in M&A activities.

No common definition for “digital”

Digital (71% of respondents), along with analytics and business intelligence (77%) are expected to have the most impact on the business over the next two years. But when asked further to describe their digital initiatives, the answers ranged from analyzing customer data and developing new products and services to improving customer experience and enabling the workforce to better collaborate or be more productive. The lack of common definition, says the study’s report, “is often confusing for business leaders and can lead to misunderstandings and conflicting goals.”

Figure 8 Deloitte CIO survey

Analyzing the answers to the questions about CIO performance and impact, Deloitte uncovered three distinct CIO “archetypes,” describing how CIOs are delivering value today—and how they are preparing for what comes next:

Trusted Operators keep the lights on. They focus on cost, operational efficiency, and performance reliability. They also provide enabling technologies, support business transformation efforts, and align to business strategy. Their core competency is to drive down costs by rationalizing, renewing, and consolidating technology, and they focus on internal customers. 42% of the CIOs surveyed fall into this category.

Change Instigators drive transformation. They take the lead on technology-enabled business transformation and change initiatives. They look outside the organization for partners and are focused on the end-customer of the business.  They are 21% more likely than other CIOs to call technology vision a strength. 22% of the CIOs surveyed fall into this category.

Business Co-Creators perform a balancing act, handling both business strategy and efficient operations. They operate across multiple dimensions of creating and delivering value, and were 24% more likely to cite ability to influence internal stakeholders as a top-five strength. They invest in emerging technologies as a way to drive new sources of revenue or to transform the way they deliver value to customers. 36% of the CIOs surveyed fall into this category.

“Change Instigators try to bring enhancements to existing business models, while Business Co-Creators often have the mandate to find new business opportunities and define new business models,” says Deloitte’s Kark. It’s the Business Co-Creators that tend to invest more in emerging technologies and co-create new business models with internal business partners.

Kark thinks about the three archetypes as a self-diagnostic tool for CIOs to examine where they are and how they fit the needs of their organization. It can also help identify shifting business needs and with them, an emerging shift in how the business defines the CIO role.

Many of the CIOs surveyed indeed see a transformation in their roles in the near future or would like to see such a transformation.  The proportion of Change Instigators is expected to remain the same at 22%. A big shift will occur, however with the other two types of roles:  The proportion of Trusted Operators will go down from 42% to 12% and the proportion of Business Co-Creators will expand from 36% to 66%.

Almost a third of the CIOs surveyed aspire to shift their role into a business leadership position, working with other business executives to define and pursue new business opportunities, while maintaining their reputation as top-notch IT operators.  But, says Kark, “if they don’t build the right skill set, if they don’t build the relationships, it’s going to be hard for them to make that transition. CIOs have to drive technology into the core of the business and if they are not able to do it, someone else will.”

The good news is that for those making the transition, career opportunities abound. “Over the next 3 years, more than half of all businesses will need CIOs of the Business Co-Creators type,” predicts Kark.

Originally published on Forbes.com

 

 

 

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About GilPress

I launched the Big Data conversation; writing, research, marketing services; https://whatsthebigdata.com/ & http://infostory.com/
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