In my previous article, The CIO’s strategic dilemma, I wrote about the long-standing challenge facing CIOs who need to free up the budget, time and resource they spend on maintaining and supporting the organisation’s current systems to focus on the areas where they can add real value to the business. The article was prompted by two recent surveys that both highlighted the issue and underlined how important it was for CIOs in the digital age to find a solution to the problem.
One of the surveys referred to in that article was performed by Logicalis, an IT solutions and managed services provider. The study covered 186 CIOs in 24 countries spanning Europe, North America, Latin America and Asia-Pacific. As well as highlighting that 73% of CIOs wanted to spend at least half of their time on strategic activities, the report also identified the obstacles that were preventing CIOs from achieving this target. Not surprisingly the respondents cited the day-to-day management of technology and other low value, non-strategic activity as being the main reasons why they struggle to get involved in activities that help grow the business. Over 50% respondents said they spend at least 70% of their time on day-to-day management issues while 80% spend at least half of their time on low value, non-strategic activity. This is some way from the CIO’s target of spending at least half of their time on strategy.
The Logicalis survey also asked CIOs about how they planned to free up their time to focus on growth activities. Streamlining and optimising their technology infrastructure (44%) was the most popular option followed by consolidating the use of managed services (22%), transferring day-to-day management of activities to vendors (21%) and use of cloud services (13%). This is perhaps a surprising result in that the most popular answer involves retaining responsibility for the underlying infrastructure and presumably undertaking a range of initiatives to make it more streamlined. Both of which will continue to occupy CIO time and IT resources that could otherwise be spent on more value-adding areas of the business. And arguably more time than would be needed to outsource the infrastructure and to then manage the service provider(s) on an ongoing basis.
This sounds like CIOs are contradicting themselves; they want to spend more time on strategy but their preferred route will continue to demand chunks of their time for operational activities and is likely to require more effort than other options available to them. Is this evidence that CIOs just cannot let go of the underlying technology?
Other sections of the Logicalis report would seem to support this view. In what appears to be a particularly telling set of responses, the study asked CIOs to identify which technologies they thought must be managed and supported in-house and which they would be prepared to outsource to a partner. Globally 54% of CIOs said that they thought network infrastructure should be retained while 41% said that the management and support of servers and storage should be kept in-house and 48% would retain responsibility for the provision of network services.
These percentages all seem very high considering that the management and support of networks, servers and storage can all be provided by service providers at a cost and standard that is at least as good as that which can be delivered by an in-house IT function. And it is unlikely that these areas will be considered as strategic or as a source of competitive advantage in most organisations. So why do so many CIOs plan to retain them?
The responses on whether security should be retained in-house are also worth noting. Globally 56% of CIOs said they would retain responsibility for the management of security. There is, however, an interesting variation on a regional basis with Europe (71%), North America (84%) and Latin America (69%) all expressing a preference to keep security in-house while only 28% of CIOs in Asia-Pacific said they would do the same. Are CIOs in Asia-Pacific naïve about the risks of security or more enlightened when it comes to the use of partners? Certainly based on their responses across the areas covered by the survey they seem more prepared to outsource compared to their counterparts in the other three regions. Without doubt the IT organisation has to retain overall ownership when it comes to security but can most IT departments really implement, support and manage security better than a third party specialist? Would most CIOs therefore be better off engaging a specialist third party to provide and manage security on their behalf as almost three quarters of CIOs in Asia-Pacific are prepared to do?
It is unlikely that CIOs will realise their target of spending at least 50% of their time on strategic activities based on their current plans and attitudes towards outsourcing and using partners to provide and manage services on their behalf. And they will continue to struggle to be seen as business leaders as a result. To be a key figure in the digital age, CIOs need to be spending an increasing amount of their time outside of the IT department, engaging with their stakeholders across the business and with their organisation’s customers, partners and suppliers. They cannot do this if they continue to manage and support large chunks of the organisation’s technology infrastructure; they need to overcome their fear of letting go of the underlying technology so they can focus on the areas that add real value to their organisations.