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Strengthen the core

by Bill Briggs, Anjali Shaikh, Kristi Lamar
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08 August 2018

Strengthen the core 2018 global CIO survey, chapter 5

08 August 2018
  • Bill Briggs United States
  • Anjali Shaikh United States
  • Kristi Lamar United States
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  • Safety first
  • Upgrade to a high-performance infrastructure
  • Embrace cloud
  • Balancing act

Before CIOs look to take advantage of shiny new technologies and introduce disruption into business strategy, they should ensure that the core—cybersecurity, infrastructure, cloud, and more—is stable and robust.

If you exercise using weights, you’ve no doubt heard a trainer’s advice to strengthen your core: Without a stable core, you can have trouble completing even one deadlift regardless of

Learn more

View the 2018 CIO Survey collection

Explore the infographic

Read the next chapter: "Industrializing innovation"

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Read The new core: Unleashing the digital potential in “heart of the business” operations

Read Reengineering technology: Building new IT delivery models from the top down and bottom up

your leg and arm strength. The same can be said of digital and emerging capabilities—without a strong technology stack, they may struggle to reach their potential.

 

When we asked CIOs which technology areas will have the most impact on their businesses in the next three years, most selected front-end technologies: digital, data and analytics, and emerging technologies (see figure 19). But many also recognized that these initiatives should be built on a strong technology foundation that incorporates cyber, modernized legacy systems, and cloud computing.

CIOs recognize the need to balance investments across front-end technologies and a core technology foundation to deliver impact

Safety first

Cyber has generally become shorthand for security and privacy, topics that can discomfit even the most seasoned executives. Many organizations maintain a reactive stance to cyber; resources are focused on protection and prevention, realized through enforcement of compliance to standards, policies, and implementation patterns.

Section 3: Look beyond

C-suite executives often focus on the shiny side of digital: new technologies that can transform customer experiences, drive product innovation, and boost business performance. But these likely represent only the tip of the digital iceberg.

CIOs need to consider identifying and understanding what is below the surface. Core technologies serve as a foundation for a business’s digital strategy. And a deliberate, systematic approach to innovation can enable the business to proactively harness disruptive capabilities.

Yet many organizations still view security and data privacy as an operational expense (see figure 20). Only about half of those surveyed say their organizations treat security as a strategic investment that is needed to protect business-critical operations or personal information. Digital vanguards—perhaps because they are further along in their digital journey—are more likely than baseline organizations to view cyber as a strategic asset (57 percent versus 49 percent).

Baseline organizations continue to view cyber as a business cost, compared to digital vanguards, which view cyber as a strategic asset

However, this doesn’t mean that organizations are turning a blind eye to security and the broader topic of risk; most CIOs (53 percent) report that cyber topics were discussed at their most recent meetings with the board. And 69 percent of respondents report having a very good or complete understanding of cyber-related changes and investments needed for digital initiatives. “It’s hard to measure the value of cyber prevention,” says Dave Naisby, CIO of the Commonwealth of Pennsylvania’s Employment, Banking, and Revenue Delivery Center. “However, once you get people to recognize the potential consequences, they understand the need to invest in it.”

A more strategic view is likely needed, evolving beyond cyber to involve other dimensions of “risk”—including regulatory and compliance, operational risk, financial risk, and even reputational risk. This last piece hints at an emerging topic of tech ethics as well as the ongoing debate on the social impact, ethics, and morality of technology adoption.

Containing risk is no longer just an operational concern—it’s a board-level business issue and strategic imperative for many organizations. Stakeholders at all levels should understand the opportunities and risks associated with digital initiatives. Leaders should proactively balance protecting the organization with adopting new business models and strategies.

Upgrade to a high-performance infrastructure

CIOs should consider moving beyond ERP implementations when looking at core modernization efforts

Many CIOs recognize that their legacy systems lack the agility needed to innovate and scale. Most (64 percent) are rolling out next-generation ERP or modernizing legacy platforms to address the limitations of existing systems. “If you don’t have high-performing infrastructure, then forget about projects and initiatives,” says Mike Tartakovsky, CIO of the US National Institute of Allergy and Infectious Diseases. “No one will trust you without solid infrastructure—that’s the core.”

Compared to baseline organizations, fewer digital vanguards (47 percent) are focused on ERP, perhaps because they have completed foundational investments. Digital vanguards are also less likely than baseline organizations to be involved with supply chain and finance transformation (see figure 21).

Many CIOs are confident in their ability to drive legacy modernization efforts; 65 percent report a good or complete understanding of the changes and/or investments required. However, as enterprise leaders, CIOs should consider extending their understanding beyond implementation to applying the modernized infrastructure to support enterprise growth and business transformation.

 

 

To create a competitive edge, we’re looking beyond our own four walls and working with our product teams to determine how analytics and other emerging technologies can be applied to new products and services for our end customers. — Johnson Lai, CIO, NuVasive

Embrace cloud

Business acceptance of all things cloud is likely a significant driver of digital transformation, and it’s growing. Ninety percent of CIOs report that their organizations use cloud computing. This is just the beginning: They expect cloud investments will double as a percentage of IT spend over the next three years, leaping from 22 percent to 44 percent. Nearly one-third of CIOs (32 percent) report using cloud infrastructures for critical business applications.

Scalability (75 percent) and business agility (72 percent) remain the primary drivers for cloud adoption (see figure 22). While CIOs in past surveys expressed concern about protecting business data and operations in the cloud, their worries appear to be dissipating. Thirty-four percent of those surveyed now see cloud as a way to enhance security.

Cloud offers scalability and agility—but can lead to cloud sprawl

For many CIOs (44 percent), cost reduction is a primary motivation for cloud adoption. In one-on-one interviews, though, many CIOs cautioned that without appropriate governance processes to oversee enterprisewide cloud spending, total cost could actually increase. This is a real concern; according to our survey, only about one-fifth of CIOs say their organizations have structured processes for measuring the impact of technology investments.

Balancing act

To support digital, CIOs should consider balancing investments in both front-end and back-end systems. The business case for standalone back-end investments can be a hard sell, but increasingly, there is a common understanding that companies must invest in core technologies such as cyber, modernized core systems, and cloud to support their digital ambitions. As such, investments in these core technologies should not be viewed as standalone expenses but, rather, should be tightly and strategically integrated with investments in customer-facing digital technologies.

Authors

Bill Briggs is chief technology officer of Deloitte Consulting LLP. He is based in Kansas City, MO.

Khalid Kark is a director with Deloitte LLP, where he leads the development of research and insights for the CIO Program. He is based in Dallas, TX.

Anjali Shaikh, senior manager, leads the research and insights team for Deloitte Consulting LLP’s CIO Program and leads publication for the Global CIO Survey and Deloitte’s CIO Insider series. She is based in Costa Mesa, CA.

Kristi Lamar is a managing director and the experience leader for the Deloitte US CIO program at Deloitte Consulting LLP. She is based in Denver, CO.

Acknowledgments

Special thanks to:

  • Anjali Shaikh for spearheading this year’s efforts with unparalleled drive, passion, and perseverance. You were instrumental in planning, strategizing, and executing this research and served as the focal point for all our activities. Thank you for being an excellent role model and pushing the team to new heights, being relentless in your pursuit of excellence, and manifesting a report that simply would not have happened without your commitment or leadership.
  • Caroline Brown for articulating interviews and research with eloquence and clarity. Thank you for providing your editorial eye to survey questions, quotes, and report content, making them succinct and punchy. Your contributions are truly appreciated and evident throughout the final report—down to the last word.
  • Dana Kublin for dedicating your unbounded creative capital and exceptional design skills to all aspects of the report. Thank you for your patience through our many iterations and for bringing a distinct visual identity and flair to the graphics and charts. You translated the practical into the unimaginable and elevated the story in a way only you can.
  • Elizabeth Moore for hitting the ground running from day one. You were truly the steady hand behind much of the report development, and you continue to guide outstanding insights from this research. Your ability to manage the team and inner workings of all of the moving parts during all phases is unparalleled and invaluable to this year’s report.
  • Allen Qiu for sharing with us your statistical expertise, data mastery, and contagious passion for analysis. You never wavered in your pursuit of insights and took the reins without hesitation to manage even greater responsibilities as opportunities arose. Thank you for applying your clear thinking and succinct analysis at every turn.
  • Keara O’Brien for harnessing your technical chops and determination in launching this year’s survey. Best of luck in the next stage of your own legacy journey; your void on our team is definitely felt as we launch this report.
  • Liz Sarno for jumping into the fray and leaning in with your fresh perspective when it was needed most.
  • Kristi Lamar for your unwavering guidance, encouragement, and confidence in the team’s ability to execute. We are incredibly grateful for your mentorship and sponsorship; thank you for being there for our team every step of the way.
  • Tiffany Stronsky for being the force behind our marketing activities. Thank you for tackling all things marketing, social media, and public relations, connecting the dots across many fronts to generate engagement.
  • Chuck Dean, Andrew Derr, Jim Eckenrode, Tonie Leatherberry, Peter Vanderslice, and Mark White for leading US interviews, as well as Thomas Alex, Natalie Andrus, Abdoulaye Beavogui Koma, Enoch Chang, Kelly Gaertner, Katherine Noyes, Charlie Rota, Jessica Sierra, Ulyana Stoyan, Divya Subramaniam, and the diligent global note-takers and staff who together conducted interviews with more than 100 CIOs and CXOs worldwide and provided insights to build the foundation of the report.
  • Mark Lillie, William Beech, Anna Filatova, Naaman Curtis, Max Cantellow, and the leads from Deloitte member firms around the globe who facilitated the surveys and interviews across 71 countries to help us deliver the 2018 global survey and report.
  • Junko Kaji, Matthew Budman, Mike Boone, Rithu Thomas, Emily Moreano, Kevin Weier, and Molly Woodworth from the tremendous Deloitte Insights team for your enduring expertise and partnership. Your advice, feedback, and flexibility have allowed us to consistently create an outstanding final product. A big thank you for all that you do for our team and so many others.

Although this is the third and final report in Deloitte’s CIO legacy project, we recognize that creating a lasting personal and professional legacy is a lifelong endeavor. To all the executives who participated in this project: Thank you for your individual and collective willingness to explore, develop, and transform your own legacies. You will continue to be an inspiration to future technology leaders throughout the digital era and beyond.

 

Through our conversations with technology and business executives alike, we were reminded that behind every leader—and every vanguard—is a village of individuals who steadfastly support, mentor, and inspire. Thank you for your many contributions and, more importantly, your perspectives; they are the foundation of how your organizations’ successes are manifested beyond the digital era.

 

Cover image by: Maria Corte

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Bill Briggs

Bill Briggs

Chief Technology Officer | Principal

As chief technology officer, Bill Briggs helps clients anticipate the impact that emerging technologies may have on their business in the future and how to get there from the realities of today. He is responsible for research, eminence, and incubation of emerging technologies affecting clients’ businesses and shaping the future of Deloitte Consulting LLP’s technology-related services and offerings. Briggs also serves as executive sponsor of Deloitte’s CIO Program, offering CIOs and other technology executives insights and experiences to navigate the complex challenges they face in business and technology.

  • wbriggs@deloitte.com
  • +1 816 802 7350
Anjali Shaikh

Anjali Shaikh

Managing director | US CIO Program experience director

Anjali Shaikh is the managing director and the experience director for the CIO Program, part of Deloitte’s Executive Accelerators. In this role, Shaikh shapes customized experiences that enable technology executives to solve complex business challenges, shape the tech agenda, build and lead effective teams, and excel in their careers. She is responsible for leading teams and developing programs focused on strategically advising CIOs and technology leaders on managing rapid IT changes within organizations, connecting CIOs with their C-suite peers and boards, and providing insights and guidance throughout their career life cycle.

  • anjalishaikh@deloitte.com
  • +1 714 436 7237
Kristi Lamar

Kristi Lamar

Managing Director - US Women in Technology Leader | Deloitte Consulting LLP

Kristi Lamar is a managing director with Deloitte Consulting LLP focusing on technology and data strategy for the Monitor Deloitte practice. Kristi also leads the Executive Accelerators (XA) Executive Sensing and Insight capability, dedicated to helping empower executives with data-driven insights and tools necessary to excel in their roles. She has more than twenty years of experience in advising the c-suite and technology-focused executives to create lasting enterprise value and manage the challenges and changes in business, technology, and their executive roles. Kristi is also the US leader for Women in Technology and passionately committed to helping to advance fairness for all and is a respected thought leader and vocal advocate on the topic. Kristi has a track record of developing and delivering successful and sustaining outcomes for the leaders of global enterprises and is a sought-after advisor to help executives solve complex business challenges. She serves cross-industry commercial clients with a specialized focus on those in Metals, Mining and Chemicals. She has deep experience designing and delivering business-led, technology-enabled transformation programs fueled by Business and Technology Operating Models, Enterprise Technology & Digital Strategies and Roadmaps, Customer & Channels Strategy, and Technology Optimization.

  • klamar@deloitte.com
  • +1 303 305 3026

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