It took them long enough. The latest global CIO survey from executive recruiter Harvey Nash reveals that ownership of digital is shifting away from IT and/or marketing and into the hands of senior executives.
Globally, 37 per cent of the companies surveyed indicated C-suite executives and board of directors are responsible for the digital strategy. 11 per cent of respondents said no one formally owns the digital strategy.
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Who owns digital?
“As more organisations gain experience with digital and understand its strategic impact, ownership is migrating from a functional domain and tactical perspective to the executive level and a strategic perspective,” the report says.
“In Australia, you will certainly see this as a c-suite/executive level priority and responsibility. The great thing about Australia is that in most instances, we tend to have healthy collaborative relationships between business units at c-level,” says Bridget Gray, managing director Harvey Nash Asia Pacific.
According to the survey, 35 per cent have developed an enterprise-wide digital strategy, up from 27 per cent last year.
Growth in Chief Digital Officer numbers slow
20 per cent of Australian businesses have a Chief Digital Officer role, which is on par with the global figure, 19 per cent of organisations globally now employ a CDO.
This figure is up from 17 per cent in 2015, but is growing more slowly than in previous years, where it jumped from from 7 per cent in 2014 to 17 per cent last year.
Gray says Harvey Nash is seeing a demand for CDO candidates, “however, we are witnessing higher volumes of digitally competent and product-oriented CIO mandates, sometimes this is to avoid creating another function, that could potentially create silos and slow business decisions and progress down.”
According to the report the existence of the CDO role is closely linked to IT budget size. Companies with IT budgets above $100 million are twice as likely to have a CDO as those with IT budgets below $100 million.
“In highest spending organisations CDOs are slightly more likely to report to the CIO (32 per cent) than they are to the CEO (29 per cent). For the other firms the picture is quite different with almost half (49 per cent) of CDOs reporting directly to the CEO,” the report said.
Barriers to innovation
Globally, 59 per cent of IT leaders cite a lack of resources or funding as a roadblock to innovation.
“Speaking with CIOs, it is often high profile cyber attacks that tend to create some apprehension around innovation within executive levels and management,” Gray said. “Boards and stakeholders need to know that whilst the business is innovating to remain competitive and relevant, they are not exposing themselves to too much security or reputational risk, this is certainly a difficult balancing act.”
Globally, 65 per cent report a skilled shortage holding them back, up from 59 per cent last year and 89 per cent are concerned about retaining talent.
Compared to previous years, project success rates are declining. Infrastructure projects and external and customer-facing projects such as website and mobile app design enjoyed strong success rates. However, offshoring remains challenging, with only 42 per cent of respondents reporting success outsourcing functions overseas.
Growing cyber security concerns
Fast-changing security threats have left CIOs feeling less prepared.
“The proportion of IT leaders who believe their organisation is very well prepared to identify and respond to cyber attacks and IT security threats continues to fall. Only one in five (22 per cent) are now confident that all reasonable risks are covered, compared with 29 per cent in 2014. More than one in ten IT leaders (12 per cent) now believe their organisation is exposed in multiple areas, the same proportion as last year,” the report said.
The risk of cyber attack by organised criminals is the biggest concern (69 per cent) and 8 per cent) believe amateur cyber criminals pose a great risk. Only four in ten (40 per cent) think insiders – current or former employees – present a comparable cyber risk.
This week The Boston Consulting Group argued the time has come to put the notion of two-speed IT to bed and instead shift to an all agile approach to technology.
“I think we still see a majority of businesses follow the notion of two-speed IT, but there is also an appreciation that innovation needs to be given creativity and space; and that space needs to be deliberate and consistently offered,” Gray said.
“Equally people realise that the best innovations are not often ground breaking, but simply improve the way we do business. This means in a business context for sustainability and meaningfulness, innovation must be pervasive and highly valued throughout the business, and certainly not something that a few ‘digital natives’ do within a secret department do.”
CIOs feeling the love
On the back of a wave of digital disruption, the role of CIO is now broader and more influential according to the study’s authors.
For instance, CIOs are now more likely to play a role in security and strategy
Now in its 18th year the report measures CIO sentiment and trends in IT leadership based on responses from 3,352 technology leaders.
Gray says she has witnessed a dramatic change in skills requests from boards and CEOs looking for a CIO.
“The skills and behavioural requirements prioritise customer centricity, humility and adaptability, whereas if you think back only a few years ago, we were hearing more about successful project delivery, presence and operational experience,” Gray explains.
Australian CIOs are more likely to be focused on generating revenue than their global counterparts. According to the study, 70 per cent of Australian CEOs want IT to make money rather than save money, compared to 63 per cent globally.
“This will of course demand a more commercial and strategic mindset from the CIO and force a reshuffling of priorities. This also is reflected in the stat that Australian CIO’s think their role is growing in influence — 69 per cent as opposed to 67 per cent globally,” Gray said.
Globally 34 per cent of CIOs now report to the CEO, up from 31 per cent last year and 57 per cent sit on executive board or senior leadership committees.
There is a also a link between job satisfaction and to whom a CIO reports. “Respondents who report to the CEO are more fulfilled than peers who report to the CFO, and respondents who sit on the executive management board are the most fulfilled,” the report says.
“CIO job fulfilment is up for all categories in 2016. However, IT leaders at smaller organisations are more fulfilled than peers at mid-sized and large organisations.”