#HNCIOSurvey Webinar: ‘INTO AN AGE OF DISRUPTION’
Highlights of the #HNCIOSurvey webinar by Anna Frazzetto, Managing Director, SVP International Technology Solutions, Harvey Nash.
We’ve just wrapped up the 2015 Harvey Nash CIO Survey webinar where the insights from almost 4,000 CIOs and IT leaders from around the world were shared and debated with a highly engaged audience of more than 400 registered. It’s amazing how much content you can cover in an hour online presentation when you have fantastic contributors like:
-Lisa Heneghan, Global Lead for CIO Advisory KPMG
-Alfonso Perez, Co-Founder & COO, Shopperception
-Jakob From, VP of IT North America, Electrolux
We enjoyed the enthusiastic participation of our audience, which drove a thoughtful Q&A that I share later in this blog. Before we get those revealing insights, here’s an overview of the CIO survey results that began the discussion.
CIO Survey Results: An Overview
Technology budgets have been growing steadily for more CIOs since their low point at the depths of the Great Recession in 2009. Today, 44 percent of CIOs have more IT budget than they did last year. If you are a CIO tasked with driving revenue and profit in your organization, you are more likely to be working with a growing budget compared to your CIO peer who is focused only on internal deliverables.
The skills shortage continues to challenge CIOs and is having a direct impact on the ability of six in 10 organizations to innovate and keep up with the pace of change. By far the most in demand skill this year is data analytics, up almost 12 percent compared to last year and six times more than testing and development skills. Interestingly, the skills that were most in demand only five years ago (Enterprise and Technical Architecture) are today showing falling demand. It’s a reminder of how fast things can change in our industry.
The pace of disruption was another clear trend that CIOs reported this year. KPMG paid particular attention to the impact of disruption with 10 questions dedicated to the topics in the survey. Almost half of CIOs (47 percent) reported already experiencing technology disruption in their industry or expecting it to occur within the next 12 months. With most disruption occurring as a result of digital technologies, it is understandable that more organizations are appointing a Chief Digital Officer (CDO). In fact, 17 percent of CIOs now report working alongside a CDO. The emergence of the CDO role is the fastest Harvey Nash has seen in any role during almost two decades running the survey.
Live Polling Results
The webinar audience participated in live polling during the CIO Survey debate to give their own perspective on the results. Here’s what we discussed.
The webinar audience largely agreed with the CIO Survey respondents that digital disruption is unavoidable. A majority of the webinar audience believe they are well positioned to take advantage of disruption; 23 percent agree, while 58 percent somewhat agree that their organization has a clear understanding and strategy for digital.
1. My organization has a clear understanding of how digital will affect our business and a strategy that incorporates digital.
Lisa Heneghan from KPMG reminded us that, for a typical CIO, there’s a one in three chance that significant disruption will already be occurring. And while most respondents feel they are better positioned than competitors to take advantage of disruption, the reality is often that change occurs at a faster pace than most IT departments can respond.
Jakob From, VP of IT North America for Electrolux, provided an enlightening case study of technology disruption in the manufacturing sector where much of the disruptions are driven by changes in consumer lifestyle. As technology becomes more important to our everyday lives, disruption, such as the Internet of Things, requires manufacturers like Electrolux to respond quicker to changes in demand.
2. Considering the role of technology innovation in your industry, which senior IT hire would have the biggest impact on future organizational strategy?
While the CIO and CTO have an important role to play in promoting innovation, the webinar audience agreed with Alfonso Perez, Co-Founder & COO, Shopperception, that the Chief Digital Officer was the ‘most influential’ when it comes to future organizational digital strategy. However, success in digital is not secured in silos, and it is critical that collaboration occurs between the CDO, CIO, CTO and the Marketing function’s leadership (the end users of digital within the organization).
3. From which area is your IT organization realizing the most improvement in operational efficiency on behalf of the business?
The dominance of business process improvement (47 percent of webinar attendees rated it ‘most improved’) closely mirrors the CIO respondent community. It was encouraging to note that one in five webinar attendees (19 percent) felt digital innovation was helping improve operational efficiency in their organization, reflecting an optimism not always shared by CIOs about digital change.
Question & Answer Session with the Panel
Q. “Are innovation cycles in your industry speeding up?”
A. Jakob said that “innovation cycles are speeding up everywhere, it’s not unique to Electrolux or even the manufacturing industry. We work hard to improve the pace of new product development to market. We crowdsource ideas to generate quicker input from customers and staff to help us understand where future demand will come from.”
Q. “What responsibilities might the CDO typically have in an organization?”
A. Alfonzo said “effective CDO’s recognize that their main clients are the Marketing team so working closely with and advising the CMO is important. Understanding which platforms are best suited to your audience is vital (i.e. Facebook, LinkedIn, etc.). Both Alfonzo and Jakob reminded the audience that the CDO’s role is one of the most collaborative in the C-suite. Partnerships will be needed with the CTO and CIO to ensure digital delivery is on time, but digital tools must be aligned with the needs of Marketing and Sales who are using them to grow the business.
Q. “What impact are business units having on where the IT budget is being spent?”
A. Here I joined in by saying that “business units have a huge influence on where IT budget being spent. In fact, much of the operational IT budget now sits within the business units and the CIO/CTO/CDO act as advisors on how best to achieve results and ROI with the budget.” Lisa added that “effective IT budgeting today is not about control as much as it’s about collaboration. The organizations who see the best value from their IT investment have support from their CEO and Board to innovate and disrupt.”
Q. How would a PMO fit into these rapid changes? It appears that some CIOs see the PMO as a slow moving and not necessary.
A. Jakob said, “if you look at the PMO as the classic waterfall model it will probably be too slow and out of date for the fast pace of change we see today. However, a balance can be achieved with a ‘bi-model’ where responsiveness can be attained when needed, but a robust PMO can still exist.” Lisa agreed: “The critical component involves getting the PMO closer to the business units to speed up decision making. There is always a need for some structure, otherwise there would be chaos, but successful businesses develop a range of paths for faster/slower decision making based on their importance to the wider business strategy. Governance can’t be ignored, no matter how fast you need to move.”
Q. With regard to Board priorities, is there any significant difference based on industry?
A. Lisa said “for the most part there isn’t a massive difference, all CIOs are being told that the IT functions needs to be constantly adapting to change and be more digital. Most CIOs are focused on delivering operational efficiency. It’s at the top of their agenda.” I wholeheartedly agreed with her point and pointed out that there are many similarities in the Media sector and other industries. Operational efficiencies remain a core part of the CIO job, if you overlook them you aren’t delivering on your Board-mandated mission.
Q. I am seeing a trend where CIO and CDO responsibilities are being combined into one role: a CDIO. What impact will this combination have in the drive for innovation and a clear digital strategy?
A. I was reluctant to agree that one person can deliver a combined role and shared that perspective with the audience. Alfonzo agreed: “There is still a clear separation between CIO responsibilities (to deliver efficient operations) and the CDO (digital adoption and innovation).
In the end, we all agreed that “collaboration” is the key to achieving successful digital innovation results and overcoming disruption in today’s fast paced environment. The introduction and emergence of the CDO during the past few years shouldn’t be seen as a challenge to the CIO or the CMO. If these three executives work together, there is far more likelihood that even the largest organization can become more entrepreneurial and use digital disruption to the advantage of their customers.
If you have additional questions that you would like to submit, please send them directly to me at Anna.Frazzetto@nashtechglobal.com. If you would like to download a replay of the webinar, click here and then click “access the recording.”