'Pace of digital innovation quickens; large companies struggle to keep up'

Digital innovation is dominating the agenda of technology leaders, but many companies are struggling to manage it, according to the Harvey Nash 2015 CIO Survey in association with KPMG. The pace of digital and the race to innovate has left many organisations lacking an enterprise-wide digital strategy and desperately seeking to acquire the right skills. Despite efforts to close the skills gap, this year skills concerns are running one third higher than in 2013. The demand for big data analytic skills has leapt to the number one most-needed skill, skyrocketing to almost six times higher than the next-most-scarce skill, change management.

Two thirds (66 percent) of CIOs report digital disruption [change resulting from digital technologies that disrupt established business models] as a very significant change to their business, drivingthem to create new business models and bring new products and services to market faster than before.

Globally, large companies report being at a disadvantage when it comes to digital, with only 17 percent of them saying they believe they’ll do ‘much better’ than competitors in managing digital disruption, compared to 35 percent of small organisations. Only one in ten CIOs believe their organisation will be unaffected by digital disruption in the coming years.
After receiving a record number of responses from nearly 4,000 IT leaders from more than 50 countries and capturing more than a quarter million data points, it is believed this is now the largest survey of IT leadership in the world.

Albert Ellis, CEO of Harvey Nash Group, commented:
“What’s most striking about the results is the speed of change. In the seventeen years we have conducted the survey we have never seen a new role grow so quickly as we have the Chief Digital Officer. We have never seen demand for a skill expand so quickly as we have for big data analytics. As technology increasingly becomes focused on the customer, the IT, marketing and operations teams are working together in new ways. Sometimes it creates friction, uncertainty and skills challenges, but for a CIO with the influence, connections and technical ability to bring it all together, it’s an exciting place to be.”

Lisa Heneghan, Head of EMA CIO Advisory, KPMG in the UK commented:
“CIOs are concerned that they could lose significant market share to competitors more adept at using technology, yet despite this threat, three in four still don’t have a company-wide approach to digital. Unless CIOs cement this vision, the chance of being overtaken appears a foregone conclusion.

“To get ahead CIOs need to focus on defining their operating model to support a digital business now, and driving through the cultural shift which is fundamental to success.”

Additional key findings from the Harvey Nash 2015 CIO Survey in association with KPMG include:

The Chief Digital Officer growing in prominence, but the role is still evolving

The role of the Chief Digital Officer (CDO) is growing in importance. Seventeen percent of CIOs now work with a CDO, up from only 7 percent last year. An additional 5 percent of respondents said they will hire a CDO in the next several months.
The CDO role varies significantly withorganisations. Where organisations have CDOs in place, only just under half (47 percent) have that person taking full leadership of the digital strategy, with the remaining organisations preferring the CIO, CMO or CEO to take the lead.

CIOs becoming more confident in the role they play in digital

Reversing a trend we charted in 2012-14, marketing departments that exclusively own digital is down to 24 percent, from 40 percent last year. Conversely, the number of IT departments that own digital is on the rise, up to 18 percent, almost doubling its influence from last year. There has also been a 7 percent jump in joint ownership between both marketing and IT.
CIOs are enjoying a stronger relationship with marketing this year, with 33 percent rating it ‘very strong’, up from 30 percent last year. Where the digital strategy is jointly owned by IT and marketing the relationship is strongest, with 41 percent of CIOs rating it ‘very strong’.

Accessing skills from outside the organization

Half (50 percent) of CIOs report they are increasingly using outsourcers to supplement skills they can’t find in-house; this compares to just 25 percent of CIOs who are looking to their outsourcers to save them money, suggesting an evolving role for outsourcers.
In 2015, six out of seven CIOs will increase their outsourcing spend.
Four in ten (41 percent) of CIOs plan to increase their investment in offshoring this year.

Top CIO operational priorities

Business intelligence and analytics made the biggest jump up the priority list compared to last year, with almost half (47 percent) setting it as a top priority.
Increasing efficiencies topped the list of CIOs’ operational priorities this year, at 61 percent.
Cost-cutting dropped in importance by 16 percent, compared to 2013.

Women in IT stalemate

The lack of women in IT has received significant media and political attention for several years, yet the proportion of women in IT leadership roles remains stagnant year after year.
Globally, the number of women in IT leadership positions – CIO, CTO or SVP title – is down 2 percent from 2013, reporting in at a mere 6 percent this year.

CIOs are satisfied

Despite the constant challenges, complexities and changes IT leaders face, job satisfaction is climbing towards historic highs – 80 percent at either ‘very’ or ‘quite’ fulfilled. The proportion of CIOs who plan to move jobs in the next 12 months is 12 percent, down from 17 percent in 2014.

Cyber security represents a very real threat

Globally, one in four CIOs (25 percent) reported their companies had to deal with major IT security incidents in the past 12 months.
Only 23 percent of respondents are “very well” prepared, down 6 percent from last year (29 percent).

About the Survey
The Harvey Nash CIO Survey 2015, in association with KPMG, collected data between 6th January and 19th April 2015 and represents the views of 3,691 technology leaders from more than 30 countries, with a combined IT spend of over $200bn. Of the respondents, 33 percent identified themselves as CIOs, 9 percent as CTOs, 32 percent as director / VP in technology and the remaining 26 percent were spread between a broad range of roles including CEO, COO, CDO and senior executives.

For more information about the survey and to request a full copy of the results, please visit www.harveynash.com/ciosurvey or email michelle.smith@harveynash.com.

Antonis Bargilly, Principal at KPMG in Cyprus stated that more and more companies in Cyprus are shifting their technology resources from the typical role of the IT Manager to that of the CIO or similar in an attempt to embrace the 'digital era'. In nowadays it is of paramount importance that a company's business model and strategy is fully aligned with the operating model and strategy for IT. With the emergence of so many technologies, the Internet of Things, etc., more and more companies in Cyprus are starting to do so, however more efforts are needed to this direction and towards really utilizing technology as a very significant driver for growth, decision making and efficiency.