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CIO survey finds that IT budgets are either growing or stable

CIO survey finds that IT budgets are either growing or stable

Driving digital strategy through new technologies and trends such as mobile, Cloud, social media and analytics a high priority

Business investment in IT is on the rise as nearly 80 per cent of IT budgets have increased or stayed the same this year, according to the 2013 Deloitte CIO Survey.

And driving digital strategy through new technologies and trends such as mobile, Cloud, social media and analytics, is seen as the next highest priority by over 50 per cent of respondents.

Deloitte’s global survey, which gathered responses from more than 700 CIOs and senior IT leaders across 36 countries, showed a remarkable uniformity in responses from participants.

In Australia almost 30 CIOs participated in the survey.

Deloitte pointed out that a time when business transformation is a top priority for organisations, it was a positive that the majority (75 per cent) of CIOs understand how IT functions could support their organisation’s innovation strategies. This increased focus on digital and new business requirements placed a greater demand on the IT department to be a centre of innovation. However, challenges remained as only 35 per cent of respondents believe their IT function is considered a credible hub of innovation by the business.

Deloitte Consulting Technology partner and leader of the CIO program, Kurt Proctor-Parker, said: “It seems as if IT budget cuts are largely behind us, with companies investing more in IT, innovation and key areas such as digital. Forty per cent of the Australian CIOs reported that they had not experienced any movement in their budgets over the past year and their current IT priorities are around strengthening risk and security and developing IT staff and skills.

“Business transformation today is both fundamentally driven by and reliant upon the fast changing world of technology. It is therefore no surprise that the CIO’s role will be transformed over the next few years into a more strategic advisory role, especially in terms of developing and delivering business strategy. Some IT leaders are already playing a far stronger role at executive level; this is underpinned by the finding that over a third of CIOs consider their next role to be that of COO or CEO.”

The survey details how it is up to the Information, Communications and Technology (ICT) industries to weigh up the unique strengths and capabilities of each business, and consider where the opportunities lie so they can refocus their investment dollars on the global growth sectors.

“The low risk way to do this is to reallocate resources and people. The ICT industry is in fact best placed of all industries to embrace the flexibility of digital, to undertake the transformation programs around areas of innovation, to move the best performers to the newer parts of the business that promise growth. Flexibility, transformation and digital is the coding of the ICT sector,” Proctor-Parker said.

The survey highlighted a disconnect between what technology leaders believe they can achieve through IT and innovation – and how they think the business views their capability to do this. As a result, many IT functions are still struggling to partner with the business, with more than 60 per cent of global respondents rating their business partnering capabilities as either “fair” or “poor”. For this reason, developing and implementing a dedicated business partnering function should be a top priority.

In Australia it appears CIOs require help with business partnerships, either because the business does not understand what they do or because they do not understand what the business wants from them.

This related to the next big challenge identified in the survey; a shortage of good talent, as CIOs struggle to find the right blend of technology expertise and business skills to support business demands. This is directly linked to IT business partnering barriers, as this process requires people who not only have the technological skills, but can also think strategically and communicate effectively.

Proctor-Parker saids: “We are confident there are many untapped opportunities lying ahead for the CIO. They have never played a more prominent role in the boardroom, nor have they had more opportunities to get closer to the business strategy than they have now.

"While we still have some way to go, especially in terms of improving the IT business relationship, the perception of IT is changing as more organisations realise the strategic importance of this function. This is a positive move in the right direction.”

Other key findings included:

  • IT and budget priorities: IT budget cuts largely seem to be behind us, as the majority (78 per cent) of budgets have increased or stayed the same since last year. Almost half (42 per cent) of budgets are being put towards change or growth activities. Business as usual activities still receive the majority (58 per cent) of IT budgets.

  • Business partnering: Over half of all respondents acknowledge there is still more to be done to improve the IT function’s effectiveness in facilitating business change and growth. More than 60% rate their business partnering effectiveness as merely “fair” or “poor” and business partnering now sits at the top of the priority list. Furthermore, almost half (45 per cent) believe their data and insight capabilities within the IT function need improving. In Australia 32 per cent rate their business partnering effectiveness as poor.

  • Innovation: Many respondents struggle to change business perceptions of IT as a mere provider of routine IT services and educate business leaders on where it can add real value. For example, 75 per cent of the IT leaders in our survey feel there are significant opportunities for IT to support business innovation, yet only a third (35 per cent) believe their IT function is considered a plausible centre for innovative development within their organisation. Australian results showed that 32 per cent believe their innovative technologies add business value through brand reputation and customer experience.

  • Talent: The above disconnect between the business and IT is due in part to a shortage of the right skills within the IT function. Almost 60 per cent of CIOs indicated that they are experiencing problems recruiting staff – in particular those that can think like the business, think strategically and communicate effectively. Promoting work/life balance to attract and retain talent was a focus for 58% of Australian participants.

  • CIO careers: Almost 40 per cent of IT leaders are considering a CEO or COO role as their next career move, with a third (33 per cent) not believing their current role provides them with development and job opportunities for a fulfilling career in IT. These leaders are eager to make a more strategic impact on their organisations and will look externally for roles that offer this opportunity. The main reasons for moving roles are a greater contribution to the business (27 per cent) or a new challenge (26 per cent).

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