CIOs are fighting a war for budget, talent and influence

25 Jun 20133 Shares

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Albert Ellis, Harvey Nash chief executive

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It is somewhat ironic that at the time that the technologies have never been better, the budgets have never been smaller for chief information officers (CIOs) of organisations, whose job it is to keep the lights on and data flowing through all the arteries of their businesses.

Yet a study of 2,000 global CIOs with combined budgets of €103bn by IT recruitment firm Harvey Nash showed that finally the IT budgets are beginning to return to pre-recession levels: 43pc of CIOs are operating with bigger budgets in 2013.

No sooner have the CIOs been given a chance to celebrate it turns out that things are very different to when the recession struck and if anything, their budgets are under attack.

The best description of what’s happening can be attributed to Marc Benioff, the CEO of Salesforce.com, upon his recent acquisition of sales and marketing platform ExactTarget in a transaction valued at US$2.5bn.

“The chief marketing officer (CMO) is expected to spend more on technology than the CIO by 2017,” Benioff said.

Benioff is basing this belief on evidence that growth in technology lies in digital, mobile and social; areas that are increasingly falling under the remit of the chief marketing officer of a company and which are alien to the traditionally conservative CIO whose job it was to make sure machines worked and data was kept secure.

The irony of all of this, according to the Harvey Nash survey, is that the relationship between IT and finance/operations is strong, the weakest relationship that IT has in the business is with marketing.

Worse, 57pc of CIOs believe they lack support from the board to achieve IT vision.

The CIO’s journey

“The journey of the CIO in recent years is quite similar to that of the CFO,” said Albert Ellis, Harvey Nash chief executive. “Fifteen years ago, the CIO was the IT manager who had to patch up computers and spent his time in the server room. Back then, the CFO was the company accountant who was the number cruncher and behaved and looked like the average accountant.”

Today, both roles occupy strategic positions, Ellis said. The most popular successor to the CEO is usually the CFO on the Fortune 500 stage.

“CIOs evolved as IT became more central to the running of the business,” said Ellis.

Fifteen years ago, a retail business, for example, would have seen stock-taking as a manual, physical exercise, Ellis said. Thanks to the evolution of technology and the guiding role of CIOs, barcodes were introduced and POS (point of sale) systems replaced old cash registers.

“Today, you walk into an Apple Store and you are confronted by a person holding an iPad who can process your credit card transaction in the spot,” said Ellis.

“Just like with the CFO who has evolved from the number cruncher to the strategic financier supporting the CEO in making investments, the CIO has a critical role to play.”

CIO vs CMO

Yet when CIOs should be rejoicing and getting the support of the board to move to the next big thing, they are now facing a new competitor, the chief marketing officer, who in order to drive sales needs to reach consumers via social networks and on mobile devices.

“We are now entering a scenario where 50pc of the IT budget is controlled by the CIO and 50pc is being controlled by the CMO,” Ellis said.

He said this isn’t being helped by the emergence of “shadow IT systems”, where workers and line managers are bringing their own tablets and smartphones to work and are subscribing to cloud platforms, such as Dropbox or Evernote, to do the job the best way they see fit.

In essence, as technology is the beating heart of the business the CIO who brought it all to this point is now in a battle for control.

This means the CIO has to become more of an influencer and has to realise he or she can’t control everything, said Ellis.

“They should be positioning themselves as visionaries who are helping workers and people like CMOs to make choices and integrate with the secure systems they have put in place. So the stark choice is to be an influencer or a controller. Choose the latter and you face a losing battle,” Ellis said.

“If you think about the growth sectors in technology today, they are not in PCs, servers or ERP systems; growth is coming from digital and marketing technologies.”

The reality that 50pc of technology budgets could land in the hands of marketers rather than technologists means CIOs need to take on the mantle of influencer in a very serious way.

Fostering talent

Another role CIOs need to embrace, particularly at a time when there is an IT skills shortage, is fostering talent in areas that seem alien to them: mobile and social media.

CIOs reporting skills shortages in mobile have grown by 11pc this year, with 25pc of all CIOs struggling to find the right mobile talent.

In addition, 25pc of CIOs cite skills shortages in big data and 19pc for social media technology skills, up 8pc on last year.

There has also been less progress with workforce diversity programmes and 14pc of organisations said there are no women in the IT department. For almost a third of organisations, women make up less than one in 10 IT employees.

One way of quickly getting to the role of influencer and to foster talent is to move quickly on the emerging field of big data, said Ellis.

“I think a lot of people are very cynical about big data,” Ellis said, referring to a new field of technology that can scour through different types of data to give instant insight on a situation.

“Most CIOs would tell you they are more worried about small data and preventing data loss or falling prey to hackers and that’s fair enough.

“But if you look at the revelations of Edward Snowden and the entire PRISM story concerning US intelligence, then that is a big data story,” Ellis said.

“If you were a big data cynic two weeks ago, you better wake up and smell the coffee.”

A version of this article appeared in the Sunday Times on 23 June

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Editor John Kennedy is an award-winning technology journalist.

editorial@siliconrepublic.com