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CIO Budgets Up As CEO Focus Shifts From Cost Saving

CIO Budgets Up As CEO Focus Shifts From Cost Saving

CIO Budgets Up As CEO Focus Shifts From Cost Saving
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CIO Budgets Up As CEO Focus Shifts From Cost Saving

CIOs have reported the highest level of budget growth since 2006 as CEOs have shifted their focus away from cost saving to using technology to improve the effectiveness of operations, according to the 2014 Harvey Nash CIO Survey.

Following the credit crunch, cost saving had been overwhelmingly the leading CEO priority between 2009 and 2013, but this has now turned to operational efficiencies with 63% of CEOs now preferring projects that make money, such as digital marketing, customer-oriented systems and innovation projects, to ones that save money.

Now in its sixteenth year and representing the views of more than 3,200 CIOs across more than 30 countries, some 46% experienced increases in their budgets, up from 42% last year and at its highest level since 2006 when 47% saw budget growth.

Harvey Nash chief executive Albert Ellis said: “We are seeing a new spirit of optimism among CIOs. Growing budgets, a shift from cost saving to investment, innovation a key objective, digital transformation and an increasingly strategic role for many CIOs all point to a positive sense of expectation about new opportunities that lie ahead.”

Getting on board

The study also revealed an unchanged figure of CIOs reporting directly to the CEO — 32%, although exactly half of CIOs said they sat on their organisation’s executive committee, down from 54% last year.

In the recent CIO 100, 48% of CIOs reported to their chief executive, and similarly 50% responded they had a seat on the board.

Dr Jonathan Mitchell, the former Rolls-Royce Global CIO now the non-executive chairman of the Harvey Nash CIO Practice, said: “Things are certainly looking up for CIOs and other IT leaders today. More than half of those holding CIO posts have a seat at the top table as genuine members of the executive team.

“While there was a slight fall in CIO representation at the top table from last year, the general trend is more than 20% higher than in the years before the financial crisis.”

Chief digital officers

The emergence of the chief digital officer also came through the survey, particularly at large organisations.

With 7% of respondents now employing a CDO, this figure rises to 16% at companies with technology budgets of more than $100 million.

These figures are also not too dissimilar to the CIO, where 12% of organisations reported having a CDO, and another 12% a separate digital leader reporting to the CIO. And while the CDO was more likely to report to the CIO (22%) than the chief marketing officer (16%), four in 10 report to the CEO.

While the CDO role has often been presented as a threat to CIOs, Durham University CIO Carolyn Brown saw it as a positive sign about the perception of technology.

“I’d like to think the increasing number of CIOs who are on the board and the rise of the CDO reflect an acceptance that the CIO is competent to add value — not just run a peripheral service,” she said.

“The up-to-date CIO who grasps what collaboration means is in a unique position to understand how behavioural shifts drive new services, new markets and a new agility in exploiting them.”

Diversity and the CIO career

When it came to diversity, Harvey Nash reported a decrease in the number of CIOs that are women from already low figures. The figure this year of 7% – the same as the CIO 100 – was down from a global figure of 8% last year. In their 2013 edition of the survey they reported the UK figure as 9%.

Furthermore, some 71% felt that women were under-represented in IT.

While much has been made about CIO career progression, the survey revealed that getting a CEO job was not an aspiration for more than two-thirds of those in a CIO role.

While 32% wanted a post in senior management as the top dog, 45% would prefer another IT role and 6% were looking at becoming an entrepreneur or setting up their own business.

 

Edward Qualtrough, CIO UK

 

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