Navigating legacy: charting the course to business value

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Navigating legacy: charting the CIOs course to business value

Deloitte’s Global CIO Survey uncovers shift in priorities

As a CIO you add value in three distinct ways based on the needs of the business: as trusted operators, change instigators, or business co-creators. The Deloitte Global CIO Survey 2016 helps you identify which pattern they should move toward to better meet the needs of their businesses – and how to do this.

Hans van Grieken - 15 November 2016

Three CIO legacy pattern types

Based on the research, Deloitte discerns three CIO legacy pattern types: trusted operators (ensuring operational excellence), change instigators (enabling large business transformations), and business co-creators (focusing on revenue and growth). According to the survey, 55% of CIOs consider themselves to be trusted operators, 34% consider themselves business co-creators, and 11% change instigators. No pattern is better than any other but, successful CIOs should be able to navigate from one pattern to another based on shifting business needs in order to meet future business expectations. This year’s survey focuses on how to do so.

The Global CIO Survey

Focus on the costumer

Do successful CIOs share any particular personal traits and characteristics? The answer is no. Personality, or “nature”, is less important than “nurture” – IT capabilities and teams that CIOs have built throughout their career to respond to changing business needs. These needs have dramatically changed since last year, from business performance to customers, with 57% of CIOs choosing customers as their top priority, compared to only 45% last year. However, only 45% claims their IT organization is involved in delivering customer experience through IT capabilities.

The Global CIO Survey

Changing business needs

While 78% of CIOs say aligning to business strategy is essential to their success, they also report significant gaps between IT capabilities and business expectations. For instance, 52% say IT capabilities around disruption and innovation do not exist or are currently being built. Also, 28% feel their IT organizations are below average in their digital skill sets. Only 21% show understanding of markets and disruptive business forces as a current strength.

Challenges

And there are more challenges. In many cases there is room for improvement in the field of talent and culture. Cost expectations are maybe even more challenging. Of all surveyed CIOs, 70% are expected to lower the cost of operations while improving service levels, and 67% are expected to reduce IT costs and drive efficiency, while 66% are also expected to maintain the same or better availability and performance of IT systems. Not surprisingly, only 10% are able to meet these needs.

The iceberg model

This is partly due to the fact that many CIOs struggle with influencing their internal stakeholders. Business leaders often only pay attention to the “tip of the iceberg”: exciting new apps. What lies below are often antiquated legacy systems, organizational structures and processes. These were developed 20 years ago, when cybersecurity was not an issue yet and many technologies were not yet discovered or adapted. With the growing front-end customer demands, huge back-end transformations are becoming inevitable.

Keys to success

So what can CIOs do to overcome this challenge? First of all, they should convince the board that if the business wants to put the customer first, improve cybersecurity and innovation, and reduce costs in the long run, core modernization is inevitable. In order to be more influential and convincing, they need a vision of what technology means for the organization in the near future. Also, they should discuss the board’s expectations of IT capabilities, the role of IT and the CIO in the organization, and an assessment of current IT capabilities. If the CIO’s role is not appropriate for business needs, they should move to another role. The survey includes roadmaps for these “journeys”.

New developments

Finally, what will the (near) future bring? Data science and virtual reality will certainly gain territory. But combining technologies will be crucial. Industry 4.0, or the fourth industrial revolution, is the current trend of automation and data exchange in manufacturing technologies. It includes technologies such as cyber-physical systems, the Internet of Things, cloud computing, and data analytics. All these technologies in themselves are already reshaping existing business models and creating new business opportunities and markets. CIOs need to develop the business acumen to anticipate and pre-empt future business needs. Again, this survey can help.

About the Global CIO Survey

Deloitte’s Global CIO Survey is conducted every year to better understand the impact and the legacy of the role of the CIO. This year’s research took place across 48 countries. On a global scale, we surveyed 1,217 technology leaders participated across 23 industry segments to explore how CIOs can deliver value to the business – and in doing so, create a successful legacy.

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