2018 Global CIO Survey
Manifesting legacy: Looking beyond the digital era
Deloitte’s 2018 global CIO survey ‘Manifesting Legacy: Looking beyond the digital era’ takes us further into understanding the increasing pace of change to the role of the Chief Information Officer (CIO) as they, and their organisations, evolve the role of their lead Technology Executive to respond to the challenges and opportunities of todays ‘digital’ era. Through in-depth interviews and online surveys, we collated the opinions and insights of over 1,400 technology leaders across more than 70 countries.
- Manifesting legacy infographic
- The CIO role in a digital era
- Emerging technologies
- Changing skills
- Our conclusions
Manifesting Legacy focuses on assessing the role of the CIO as organisations become further immersed in the digital era, to fully explore not only how prepared they are for supporting the business in achieving their strategy, but also to lead it. We have gathered the opinion of CIOs and business CxOs to provide a multi-faceted view on the role the CIO has to play in achieving business strategy. We also explore the approach to organisations investing in emerging technologies to streamline business processes, engage employees and customers and drive new value-generating business models. Whilst investment in technology has increased there is still a limited fund, and therefore we explore how well structured organisations are in determining the optimum technology for their business needs. In a business-led, technology-enabled mind-set, we need to ensure business needs are at the forefront of technology investment and that CIOs have representation in the right forums to support this decision making process. Finally, we analyse the changing skills needed and the challenges CIOs face in not only recruiting talented resources, but also retaining them in a competitive market where all forms of talent competitors are offering differentiating propositions.
The CIO role in a digital era
In previous surveys, we explored the three distinct pattern types (trusted operator, change instigator and business co-creator) that represent how CIOs deliver value to their organisations. This year’s survey continues to reflect on these roles and assess how, during the immense change brought on by the digital era, they have positioned themselves against these roles. Surprisingly, for many CIOs, their roles have not evolved in line with the expectations of their business. Despite the perception that digital has been impacting businesses for some years, fewer than 10% of respondents identified themselves and their companies as being advanced in the journey to incorporate technology into their digital business strategies and more than half having not started at all. The report explores how this is a critical moment for the 55% of CIOs that are still acting as trusted operators, a role that will likely, in time become obsolete. It identifies the traits needed to shift to leading business growth and digital transformation and identifies the top areas for focus over the next 3 years as delivering major organisational change and transformation (66%), building high-performing teams (63%) and being results oriented (50%). In order to do this, CIOs may need to challenge their current talent model, rebalancing their organisation’s technology expertise to support collaboration with the business; respondents saw a 50% increase in the demand for skills like Cognitive Flexibility, Emotional Intelligence and Creativity.
The positioning of the CIO in an organisation is increasingly critical to meeting the challenge presented by the digital era. The CIO is expected to have foresight on the next disruption or opportunity, continuously innovate and work effectively with ecosystems of partners and vendors - all often in the context of an organisation that increasingly needs to be fluent in technology. CIO’s are in the perfect position to place themselves at the forefront of a company's development, inspire change and support the executive in becoming smarter about the technology choices they take advantage of to transform their business. The key to doing this successfully will be to look across the whole organisation in order to transform it and ensure that funding priorities and budget allocation recognise the changing scale of technology’s role in an organisation. Helping the organisation embrace a culture that embraces technology and is increasingly “tech fluent” to keep pace with the evolving technology opportunities, also requires the CIO to put culture change at the heart of their agenda.
The Digital era has provided the CIO the opportunity to step up to become a business leader that drives top line growth with many now realising this agenda for their enterprise. 40% of CIOs expect emerging technologies to have a major impact on their business in the next 3 years including significant investment in artificial intelligence (AI), machine learning, Internet of Things and robotic process automation. CIOs in digital vanguard organisations expect to invest more heavily in AI and machine learning than those in other sectors, perhaps reflecting that they are working from an already transformed, solid foundation. Adoption and embedding of emerging technologies has become a positive differentiator for organisations, but this situation will shift to one where a lack of engagement and adoption will become a negative differentiator.
Many organisations are dabbling in emerging technologies, making initial progress in a number of edge-plays, resulting in pockets of innovation springing up around the enterprise like digital popcorn. Without considering a broad strategy for scalability and adoption however, CIOs are seeing these initiatives stall as organisational antibodies from the traditional eco-system start to bite. The resulting lack of return on investment, damage to credibility and frustrated relationships can even prevent the organisation from continuing to pursue these technologies, preventing the drive to digital transformation.
Emerging technologies demand new skills sets, but the picture is increasingly more complicated than this. Technologies themselves are applied in different ways, with analytics and customer experience to the fore. The market for new talent consists of millennials and Generation Z who are looking to companies that are inclusive, have a positive culture that supports change and does not fear failure and contributes to society. CIOs need to have a plan to evolve the culture of their organisation whilst maintaining traditional IT, which continues to rely on the deep knowledge of specialists. Existing IT staff will need time and training to develop digital skills and may need to focus on interpersonal actions as they move from diligent order takers to effective collaborators and business problem solvers. Externally, a plan to recruit in the middle of a market salary range will not get the job done and digital vanguards increasingly see their reputation as a differentiator when seeking out new talent. CIOs need to be able to combine all of these elements into a coherent plan to recruit and retain the future leaders that stand to inherit their digital legacy.
- The CIO in the Digital era. As we have discussed, the challenges the CIO’s face are increasingly broad, harnessing innovation, transforming the workforce, protecting the organisation and delivering against the business strategy. CIO’s must be able to clearly articulate the value the corresponding investments bring to their organisation, however only 20% of CIOs have a structured process for measuring the value of their technology investments, with 14% not measuring business impact at all. This lack of transparency will lead to stalled investments and an inability to deliver against this broad transformation agenda before it has even begun.
- Emerging technologies. 40% of CIOs selected emerging technologies as the most impactful technology area for their business in the next three years – a 135% increase over the 2016 survey. As CIOs embark on building innovation capabilities, a structured process will encourage experimentation while ensuring alignment with business strategy. This innovation strategy will ensure a focused view of the developing marketplace and help organisations to avoid being constantly distracted by the next shiny thing.
- Changing skills. As the mission of IT has expanded, the need for specialist expertise has waned, and 60% of respondents report difficulty in finding the right balance between technical and soft skills. CIOs must have a talent strategy that reflects the needs of the future state organisation with less administration, greater automation and putting analytics and customer experience at the centre of service design.
- Cloud Adoption. CIOs expect that cloud investments will double as a percentage of IT spend over the next three years from 22% to 44% with a similar increase in the level of mission critical infrastructure in the cloud, from 28% to 54%, and nearly a third of CIOs (32%) report the use of cloud infrastructure for critical business applications. This has significant implications for the organisation’s risk profile and ways of working. Without a clear road map covering the Operating Model and scaling adoption and consumption, CIOs will struggle to achieve the intended value of cloud adoption and support the delivery of the overall business strategy.
- Cyber challenge. CIO’s are under increasing pressure to maintain and secure the integrity of business-critical assets, however only 49% of CIOs identified security and privacy as a strategic investment. For a CIO, the ability to respond to a cyber-attack and have clear recovery plans in place is no longer a discretionary activity and the lack of a plan now represents a real risk to the business.