The CIO conundrum

keyboard question markThe British Computer Society (BCS) recently published a survey that explored what CIOs are being asked to do by their CEOs compared with what CIOs think they should be doing. At the headline level the results are very encouraging with a strong correlation between the responses given by both CEOs and CIOs about the issues on which IT departments should be focusing.

When asked to list all the issues their IT departments should be concentrating on both groups identified the same top 3 issues:

  • Operational efficiencies (67% of CIOs, 72% of CEOs);
  • Business transformation and organisational change (69%, 69%);
  • Strategy and planning (75%, 68%).

And when asked what the top issue for their IT departments should be there was also a good level of agreement between CIOs and CEOs with the same three issues coming out on top although there was clearly a difference of opinion around one area:

  • Operational efficiencies (12% of CIOs, 27% of CEOs);
  • Business transformation and organisational change (36%, 32%);
  • Strategy and planning (19%, 13%).

Not surprisingly perhaps, CEOs and CIOs appear to disagree about the relative importance of Operational Efficiencies, i.e. reducing overall IT expenditure, with over twice as many CEOs saying it should be the top issue for the IT department. Although interestingly a similar number from both groups (67% and 72%) put Operational Efficiencies in the list of all issues. So CIOs and CEOs agree that reducing cost is one of the key issues that their IT departments should be focusing on but just not on whether it’s the number one issue.

Around a third of both groups, however, identified Business Transformation and Organisational Change as the top issue for IT departments, making it the most popular top issue. And when both groups were asked to identify all issues their IT departments should focus on, 69% of both CEOs and CIOs included driving transformation in their lists, placing it second on both groups’ list of all issues.

And therein lies what I believe is one of the biggest challenges facing CIOs today: over 7 in 10 CEOs and just under 7 in 10 CIOs believe their IT departments should be focusing on reducing the overall IT expenditure in their organisations. Yet almost 7 in 10 from both groups believe that IT should be driving business transformation and organisational change. This appears to be a contradiction in the priorities of CIOs; on one hand they need to be driving transformation and change within their organisations whilst on the other they need to be reducing the amount their organisations spend on technology.

This is not necessarily a new challenge for CIOs – there has always been pressure on budgets and doing more with less. In the current economic climate there is perhaps even more pressure on expenditure than there has been previously. But it also seems that CEOs are realising that technology, and the CIO, can also help transform their organisations, which is clearly very encouraging. This places the CIO in a strong position if they can solve the conundrum of reducing cost whilst investing in technology that drives change.

One route round this conundrum is for CIOs is to demonstrate how investing in technology and resources can improve the bottom line of their organisations. Whilst this should not remove the need to demonstrate value for money, efficiency and effectiveness of IT expenditure it may help to secure the additional investment required to drive transformation across the organisation. To do this the CIO needs to become more commercial, more business focused and capable of talking in terms of the bottom line. Showing linkage between IT investments and the bottom line can sometimes be difficult and getting support for increasing expenditure whilst other areas are being asked to cut back is a significant challenge. But CIOs that solve this conundrum will take one more step towards becoming business leaders in their own right.

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