Global chief information officers cite innovation and growth as top business priorities, yet 84% of IT budgets are spent on running day-to-day operations and incremental change, according to a recent survey from Deloitte.
At a time when new business ecosystems are emerging and the C-suite is becoming more interconnected, CIOs are striving to strike a balance between innovation and operational effectiveness while improving their C-suite relationships and leadership skills.
“As global business ecosystems evolve, CIOs are expected to embrace and anticipate the pace of change and its impact on enterprise-wide technology needs,” says Kevin Walsh, partner and global technology consulting leader, Deloitte Consulting LLP. “The C-suite is now, more than ever, looking at the CIO as a leader who is prepared to drive global business priorities through both scalable technology solutions and smart investments.”
While assisting in business innovation is a top technology priority for CIOs across industries, according to the survey, only 16% of IT budgets focus investment on innovation and growth. In addition, only 15% of global tech leaders are investing in emerging technologies that would contribute to innovation and growth.
Place in the C-suite
“CIOs have a huge opportunity to drive innovation and growth in today’s increasingly global and connected business environment,” says Karen Mazer, U.S. CIO Program Executive Sponsor, Deloitte Consulting LLP. “The challenge lies in the CIO becoming a respected business leader, with a role in advancing both the growth and innovation agenda as well as supporting operational excellence.”
Prioritization and access to proper funding typically depend upon the relationship with the rest of the C-suite and poses a significant challenge for allocating investments. Nearly 70% of CIOs surveyed claimed excellent or very good relationships with the CFO and 51% said the same for the CEO.
However, only 42% of the sample identified themselves as being co-leaders or initiators of business strategy.
To that end, three in four CIOs said that analytics and digital technologies will have a significant impact on their business. At the same time, many CIOs mentioned the struggle to get ongoing funding for legacy and core investments which will serve as the foundation for growth and innovation.
The survey shows that across organizations large and small, CIOs share five business priorities which are directly linked to the heart of their businesses: performance (48%), innovation (45%), customers (45%), cost (45%), and growth (44%).
CIOs in technology, telecom, and financial services identified innovation as the top business mandate. By contrast, performance is top of mind for consumer business, manufacturing, and health care CIOs, with more than half of CIOs picking these as their business priorities.
Cost dominates the government and energy sector CIO agendas, with a majority of respondents in government (65%) and energy and resources (59%) picking “cost” as a top business priority.
Looking beyond their specific industries, CIOs are becoming more focused on the broader ecosystems in which businesses operate. To that end, the survey found that more than half of CIOs chose one priority different from the top three for their industry.
Can they hack it?
As CIOs seek to execute against these varied priorities, they leverage a diverse set of skills and leadership approaches— despite the survey finding that 91% of CIOs do not believe they have all of the requisite skills to be a successful tech leader. In fact, the survey found that CIOs surveyed vary significantly in how they deliver value to their organizations and are naturally clustered across three patterns:
• Trusted operators: Deliver operational discipline within their organizations by focusing on cost, operational efficiency, and performance reliability. They also provide enabling technologies that support business transformation efforts and business strategy.
• Change instigators: Lead technology-enabled business transformation and other change initiatives.
• Business Co-Creators: Spend most of their time on business strategy and driving change within their organizations to ensure effective execution of the strategy.