Kathy Gibson is at IDC CIO Summit in Chartwell – CIOs have the unenviable task of managing corporate expectations in a world where instant results are taken for granted.
Much of the time, IT doesn’t get enough time or attention at the board level, as budgets come under pressure in a world where more services than ever are required, according to Mark Walker, associate vice-president: sub-Saharan Africa at IDC.
Part of the problem is that IT doesn’t get a big share of the technology spend, but is expected to take care of it all.
Making sense of it all is the next big challenge, Walker says. “We have to prioritise when it comes to technology.”
There has to be a balance between transformational systems that will change industries; incremental systems that will eventually lead to transformation and opportunistic systems that will grow based on specific use cases.
“You have to find ways to prioritise and speak to people in the organisation; but you have to make sense of it all. All the CEO cares about is driving growth; if you are not contributing to a measureable growth you are in trouble.”
Research shows that just half of technology spend is now by IT, while lines of business spend as much on technology as IT does. Meanwhile, IT budgets are expected to grow at 3,5% a year until 2021, while line of business budget will grow 6,9%.
“So our influence is waning,” Walker says. “We have to find a sensible meaning to feed up into the business.”
In 2018, IT is at the intersection point, Walker says. By 2021, the only industries where technology spend will be completely IT-led will be construction and telecommunications.
“This begs the question what relationship do you have with the line of business leads?”
Driving these changes is the difference between knowledge workers and digital workers.
“We are moving from a physical to a virtual environment,” Walker says. “The approach of these two types of workers is very different. We need to understand what is likely to come down the road and anticipate it.”
Disruptive technologies could put companies out of business if organisations don’t adequately prepare for the future, Walker says.
The IDC CIO survey indicates that IoT increases business productivity and will enable faster and better decision-making. Meanwhile, big data investments are expected to grow 60%.
These insights are from CIOs, but they need to feed them back into the business, Walker says.
Organisations still expect CIOs to be the technology experts, but there are indications that CIOs should employ a good dashboard with high-level metrics.
“So we looked at where the CIO is positioned,” Walker says. “Deloitte says the CIO has to communicate and collaborate, look after technology as well as regulation and governance. They also have to understand the business requirements.
“And they have to understand all this stuff all the time.”
The relevant CIO has to understand the macro-economy – investment scenarios, business confidence, the exchange rate and political sentiment – along with financial metrics like regulation compliance, operation performance, process efficiency and customer experience. At the same time, they need to know about the new technologies coming down the line.
Significantly, the importance of KPIs keeps coming up in any discussion about CIO relevance. “What you can’t measure you can’t manage,” Walker points out.
CIO KPIs come down to understanding business and IT strategy, being able to do business management and looking after operations.
In South Africa, CIOs still spend most of their time on operations, with about 25% of their time on business management and just 15% on strategy. “We are still focused on keeping the lights on,” Walker points out.
“Is this good enough? No. We should spend a lot more time in the business management space, interacting with lines of business and understanding how we can work with them to promote growth in the organisation.”
CIOs need to think carefully about their KPIs and whether they are relevant and should spend time understanding the business.
“Line of business needs you more than you need them,” Walker concludes. “They should be consulting with you on technology decisions – and you have to go them with ideas and solutions.”
He stresses that CIOs need to align with both short- and long-term organisational goals. “Wars are won through many small battles.”
There are high business expectations around Internet of Things (IoT), artificial intelligence (AI) and analytics. But CIOs need to manage these expectations carefully. “Be realistic and select solutions judiciously,” Walker says.
“We should also be more forward-thinking, anticipating the impact of new technology, and translating that into business outcomes quickly.”