Strategic CIOs defy stereotypes, but must overcome digital skills shortfalls
- Summary:
- New data contradicts the assumption that CIOs are losing organizational stature and control of tech budgets. But becoming a strategic CIO won't be a cakewalk either
However, a recent survey on The State of the CIO by CIO.com punctured these narratives with data supporting the emergence of a strategic CIO. As it turns out, the threats to the strategic CIO don't come from Colonel Mustard (A.K.A. the "CMO"), but from the problems of cybersecurity on the one hand, and digital skills shortages on the other.
But first, the basics: The 2015 State of the CIO survey is comprised of 558 respondents from the CIO.com audience and LinkedIn group. Though only 37 percent of them are formally titled CIO, 100 percent of them self-identified as "heads of IT." The survey has a large enterprise bent: the average respondent is from companies with 9,749 employees.
Respondents hailed from a range of industries, with the most common being public sector, manufacturing, financial services, high tech, retail, wholesale distribution, services and health care. One advantage of the CIO.com survey, now in its fourteenth year: the historical data from past surveys shows how CIO priorities have changed, or not.
One example, notable for its lack of change since 2007:
Reprinted with express permission of CIO.com, from the State of the CIO 2015 report
Contrarian CIO stats, but the business partnership has pitfalls
As we can see, there have been only modest changes in who the CIO reports to over time. A slight bump in the positive direction goes to the 44 percent of CIOs who now report directly to the CEO - up four percent since 2007. In addition, 64 percent of survey respondents said that they hold a seat on the business executive management committee.
The CIO's typical job tenure is higher than expected also, holding steady with past years' surveys at the five year mark. Another contrarian stat: as per the respondents, only 34 percent of the budgets for information technology is NOT directly controlled by IT (no historical comparisons were noted by CIO.com on how this has changed over time).
But it's not a blissful path to business relevance. While many CIOs are attempting to pursue a bona fide business partnership, they remain burdened with "functional" (day-to-day) operational tasks, with security becoming a bigger chore with a thankless downside (few CIOs will get promoted for having no cybersecurity attacks, but if a successful attack happens on your watch, CIOs must walk that particular plank).
Security management is up to 31 percent on the functional task lists for CIOs in 2015, the biggest functional task increase since last year's survey at 24 percent. Aligning business with IT remains a key "transformational" chore, checking in a 54 percent (55 percent last year).
For the purposes of this survey, CIO.com classified the CIO's main roles into "functional," "transformational," and "business strategist". The biggest changes are the reduction in functional time (22 percent now, versus 30 percent in 2009). Transformational work remains a constant (for now), with the business strategist role taking hold, up as high as 34 percent of time spent wearing the "business strategist" hat (in large enterprise).
Moving from the "Functional CIO" to the "Business Strategist"
Looking ahead five years, some striking changes are anticipated, with CIOs predicting they will spend only five percent of their time on functional duties like improving system performance, controlling IT costs, negotiating with vendors and resolving IT crises. By contrast, they expect to spend a whopping 72 percent of time as business strategists in five years, with the transformational projects that support business enablement largely complete, down to 23 percent.
Another interesting three to five year window question: which line of business IT budgets will go up or down. The respondents divided the pie chart between other groups that have IT budgets. Yes, the CMO is on the rise with a projected budget share of 38 percent in three to five years (up from 34). But most of the rest remain content, with HR staying at 23 percent and the project share of IT budget for finance and accounting actually going down (from 34 to 31 percent).
Not so fast: digital skills shortfalls and turf wars loom
But if these survey results seem to put the CIO in a position of digital strength, the data also had an undercurrent:
- 49 percent of CIOs said that they get scapegoated by other departments when they fail to meet their own goals
- 36 percent of CiOs feel they are fighting a "turf battle" with at least one of their executive peers
- 56 percent of CIOs are experiencing a skills shortage (only 23 percent said they did not have a skills shortage issue).
When asked to break down the skill shortages by area, the priorities were:
1. Big data/BIO and analytics
2. Security/risk management
3. Application development/programming
4. Mobile technologies
5. Enterprise architecture
6.Business/IT liason/business-IT relationship management
7. Project management
8. Cloud services
9. Database administration
10. Smart initiatives/Internet of things
My take
The "State of the CIO" 2015 survey paints a picture of a confident CIO in the midst of digital change. Despite tensions with scapegoating, collaboration with lines of business is increasing, along with the CIO's boardroom relevance. CIO.com also compared their CIO data with the tech priorities cited by IDC in their Line of Business Leader survey. Some of the differences were notable, indicating there is still a gap in how tech dollars should be used between CIOs and LOB leaders.
Industry variations cited by the CIO.com survey were also interesting, but here I would view the data as more conversational than definitive. The overall size of the survey is decent, but the industry breakdowns would constitute a pretty small amount of respondents per industry - enough for insights but not for strong conclusions. Industry variations in CIO trends would make a terrific follow-on study.
With 64 percent of CIOs saying that the CEO regularly consults with them about organizational strategy, the CIO is hardly in the marginalized position that some "digital change" pundits would have us believe.
Nevertheless, the so-called strategic CIO is not without his or her discontents. Those CIOs who cited their organizational perception as "functional" were still contending with a focus on cost center control. As much as CIOs might think they will move beyond their functional duties, cybersecurity looms as a central chore that will continue to limit transformational activities. As data sources and consumption expands, data compliance is certain to detract from strategic time also.
If CIOs are to become the full-fledged business partners they intend to be, then digital skills development needs to be a major focus. It won't be enough to source contractors in areas of shortfall. Internal centers of excellence will be needed to extend digital and analytics competencies. The skills tactics of the "cost control" CIO simply won't work for the strategic CIO. That's a story to track; we'll see what forthcoming data tells us.
Image credit: junger erfolgreicher Geschäftsmann © fotogestoeber - Fotolia.com, CIO.com report slide used with express permission of CIO.com.
Disclosure: diginomica has no financial ties to CIO.com - the report was provided to us for the purposes of editorial review.