State of the CIO is the annual report published by CIO magazine based on the survey of heads of IT. The survey population of about 545 represents a wide spectrum of industries (Manufacturing, Medical/health care, Insurance, Finance, Education, Distribution, Government etc.) and size (Less than $100 Mn, $101 Mn – 999 Mn, $ 1 Bn & more). The survey results can be downloaded from CIO website. Are there any surprises? Indeed, there are surprises as well as contradictions.
As per the report, the top 3 processes being improved by IT are Accounting & Finance (!), Customer Service & Support, and Human Resources. Accounting & Finance taking #1 position is really surprising. But then it could be on account of regulatory requirements such as SOX.
The top 3 contributions of IT towards the organization are Reduction in costs through efficiency & productivity, Business Innovation, & Attainment of competitive advantage. Regulatory compliance ranks 7th this year and it ranked 5th last year. Now this contradicts the finding as well as my assumption stated above. This means organizations are spending money on Accounting & finance processes to improve efficiency & productivity, business innovation and competitive advantage!!!
34% of the respondents (which was the largest block) stated that the goal of their company’s customer efforts is towards attracting new customers to expand revenue sources. If that was indeed the case, one expected companies to spend on IT for improvement in Sales processes (ranked #5) more than Customer Service and Support processes (ranked #2).
73% of the CIOs believe that IT should play a proactive role & lead business. Only 23% believe that that IT should play passive role and simply support business. This is an encouraging trend. In my experience, more and more business leaders now want IT to play more proactive role.
Small companies spend 9.8% of their revenues on IT. This is significantly higher than midsize companies (5.2%) as well as large companies (6.6%).
Supply Chain initiatives were consistently given low priority in response to various questions by CIOs. Supply chain initiatives can contribute significantly in achieving Cost Reduction, Business Innovation, and Competitive Advantage, which were identified as the top 3 impact areas by CIOs. What could then be the possible reasons for their low priority and the resulting contradiction? One possible reason could be that supply chain was irrelevant for more than 50% of the CIOs considering the industries they represented.
The top most barrier to CIO’s job effectiveness is “overwhelming backlog of requests and projects”. Unrealistic expectations from the business; Unknown expectations from business; Lack of business knowledge within IT department are some of the other barriers identified by CIOs. This is an extremely interesting confession by CIOs considering that most of them want to drive business and play a more proactive role. CIOs indeed have a tough job on their hands.
I, at times wonder whether surveys such as the one carried out by CIO magazine are meaningful considering the diversity in industries and size the responding CIO represented. It becomes very difficult for readers to identify & draw universal trends and takeaways.