CIOs playing greater role in business life

12 May 2006

The role of the chief information officer (CIO) worldwide has shifted from the sidelines as that of merely an enabler of the business to a serious contributor to the bottom line, new research from Gartner suggests. However, according to Microsoft’s Paul Mason (pictured) Irish businesses may yet be behind this curve.

Addressing Irish-based CIOs yesterday, Gartner regional vice-president Toon Geensen referred to a recent global survey of CIOs consisting 45pc North American CIOs, 30pc EMEA CIOs and CIOs based elsewhere in the world.

Assessing the role and priorities of CIOs today Geensen said: “If you look at where we are now compared to between 2001 and 2003 — where CIOs were focused purely on cost cutting and driving efficiency in terms of looking at outsourcing and data centre consolidation — we have seen a total swing to a situation where the CIO role has moved from an enabling role to a contributing role.

“Today the CIO is being seen as a business partner involved in the strategy and translating that into tactics and operations. The CIO today is part and parcel of the business success story,” Geensen said.

According to the Gartner survey, the top three expectations that businesses place on CIOs today are: firstly improving business processes on an ongoing basis, secondly managing enterprise-wide operating costs — “not just reducing costs,” said Geensen, “but using IT to have better cost efficiency across the enterprise — and thirdly attracting and retaining customer relationships.

Geensen added: “IT is now seen as an instrument to drive efficiency across the enterprise. As a result, we are beginning to see IT budgets increase. Some 47pc of worldwide CIOs say they will have on average a 3pc increase in IT budgets this year.”

In terms of technologies CIOs are investing in this year, Geensen said that number one is business intelligence (BI) set to increase 4.8pc this year, second would be security enhancement tools set to go up 4.5pc this year and thirdly mobile workforce applications, which will see an increase of 3.9pc in spending this year.

The top strategic priority of CIOs in 2006, Geensen said, is delivery of projects that deliver business growth. “70pc of CIOs agree with this and believe that there needs to be better buy-in from other parts of the business in order for projects to succeed. Otherwise the risks would be too big and they would be unwilling to embark on a project that is solely championed by the IT department.”

The second strategic priority, which ties in with Geensen’s last point would be linking in business and IT strategies in advance of a project commencing in order to meet business expectations.

The third-highest strategic priority would be building in business skills into the CIOs office, “making it more a business department than an IT shop”.

In terms of the fears CIOs face today, Geensen said: “The biggest scare would still be having the business appearing on the front page of a newspaper as part and parcel of a big security fraud. There have been a few examples of this in the States in terms of credit card fraud made possible by a security backdoor left open.

“Other things that would scare a CIO today would still be aggressiveness on the part of business managers if systems fail. CIOs would dread that call in the middle of the night if a system goes down,” said Geensen.

The growing importance of IT security has enhanced the CIOs standing in big business, he added. “Security hasn’t disappeared off the radar but CIOs are being seen as the natural protector of the company. Security is now becoming a standard operating procedure of any company.

“Instead of being treated incredulously by executives, security is now fully ingrained in the minds of everybody involved, part of the businesses fabric. The CIO is being seen as a business partner who protects the company but also makes new business opportunities possible.”

Paul Mason, enterprise and partner group director at Microsoft Ireland, agreed that the role of a CIO is more critical to business strategy. “The role of CIO has moved from just working in a business maintaining the systems and spending budgets in order to keep things going to one where the CIO adds value and IT people play a key role in driving new products and services.”

However, in Ireland, Mason said, this mind shift is more likely to take place in multinationals rather than indigenous companies. “We’ve looked at the adoption of our latest technologies across the world and how quickly people are deploying current technologies and indigenous Irish companies are behind that curve.”

Mason pointed to research from the World Economic Forum’s Global Competitiveness Report on 160 countries worldwide, which placed Ireland in seventh place worldwide in terms of macro economic policies, 13th in the world in terms of public institutions but 31st in the world in terms of technological readiness.

Mason continued: “There are some good examples in Ireland where the CIO is on the board and seen as driving the business forward. However, the proportion of Irish companies versus US companies putting CIOs on the board is lower.

“There is no doubt greater demand on the office of the CIO to add value. Gartner are right in saying that before it was all about cutting cost and consolidating IT. CIOs have done that and moved on. They are contributing to new business growth. However, in Ireland our feeling is that there is still a big agenda of doing more with less,” Mason concluded

By John Kennedy