14 Jun 2016

IT budgeting: cost centre or revenue generator?

We’ve all heard the spiel: CIOs must become business partners. IT departments must become value-adding innovation centres. Technology doesn’t matter, only customer satisfaction.


But how true is this really? Does it reflect the reality of what’s happening on the ground inside modern businesses?


Answers are at hand and it looks like the spiel is right: CIOs are actively transforming the IT function into one that focuses on value and innovation, even as they leave the old ‘utilities’ model of IT behind. The Harvey Nash/KPMG 2016 CIO Survey checked in with more than 3300 IT leaders in 82 countries across four continents and its findings are largely good news for CIOs and their colleagues.


The new roles for IT

So what are CIOs doing? Among those surveyed, nearly two-thirds (63 per cent) said they were focused on IT projects intended to earn, not save money. Meanwhile, their priorities have also shifted, with ‘increasing operational efficiencies’ dropping 16 per cent, and ‘delivering a stable IT performance’ dropping 27 per cent.


Taken together, these findings paint a picture of a rapidly evolving IT function. The growth and adoption of cloud technologies, outsourced and managed IT services, and a willingness to change the nature of their roles, shows that CIOs are thinking differently about their roles. Simply providing email and serving files is no longer their job, nor is it IT’s function.


By aligning more closely to business goals and end-user results, IT leaders are being subject to new demands, both organizationally and personally. Reporting to the CEO, not the COO or CFO has its benefits (87 percent of IT leaders reporting to the CEO said they found their jobs fulfilling) but it also reflects IT’s emergence as a business partner rather than as a service provider.


“From grappling with an increasing cyber security threat, to working with the board on innovation and digital transformation, CIOs in 2016 are dealing with a more varied range of challenges than ever before, many of which are far, far away from traditional IT,” said Harvey Nash Group CEO Albert Ellis.


Skills shortage: a looming problem

No growth is without its pains, and as IT shifts its focus away from implementing technology solutions and more towards solving human problems, it has a very human problem of its own: finding the right people.


The report says that the difficulty of finding skilled workers who combine technological expertise with business vision “the greatest technology skills shortage since the Great Recession almost a decade ago”. That means that CIOs must also play a role in recruiting, to make sure that their team can attract the best and brightest workers, to ensure they can continue delivering strong results for their organization.


It’s clearly a challenge that many CIOs are relishing: helping shape their organisations and finally being recognized for their ability to innovate and create new solutions to emerging problems. As businesses transform, so too must their leaders – perhaps their technical leaders more than any others, as most of these transformations are technology-driven.


As the report notes, “Adaptability, influencing skills and an ability to keep a clear head in uncertain times are becoming increasingly important business skills for today’s CIO.” Clearly, while technology skills will always be important, they’re no longer the only ones that CIOs should master.