British Business Failing to Reap the Rewards of IT Innovation
British business is failing to reap the rewards of IT innovation, research amongst top Chief Information Officers has reported. Too many boardrooms are still in the dark over IT's role in business transformation and managers are failing to turn IT advantage into measurable benefits. These warnings are revealed in the CIO Connect Census 2007, which undertakes the most comprehensive research of CIO opinion in the UK. The findings have led to calls from the research authors for closer co-operation between the boardroom and IT leaders to unlock the potential of British business.
More than 80% of CIOs surveyed said that IT projects were under increasing financial scrutiny, yet a third maintained that business benefits were not being monitored by management once projects had gone live. Business managers are failing in their responsibilities to record and report IT project returns back to the boardroom, say 76% of the UK's top CIOs. Compounding the problem, failing projects are left to run on far too long with 91% of CIOs suggesting corrective management action is not taken quickly enough – wasting valuable time and money.
And with the majority of CIOs (66%) believing their Board is predominantly tactical in its attitude to IS, rather than strategic, these business failures are leading to continuing Boardroom communication challenges.
"These findings suggest that a gulf still exists between expressed and real commitment from the Board and senior business managers when it comes to promoting and pushing through important IT changes", said Nick Kirkland, Managing Director of CIO Connect. "There is a requirement from business leaders to innovate for commercial success and there is a real desire from CIOs to use IT to help make this transformation. The challenge is getting CEOs and CIOs talking the same language, about the same business challenges, earlier enough in the process to allow IT to make a difference. Addressing this challenge is at the heart of CIO Connect's agenda for 2007."
However, the research shows CIOs are not pointing the finger exclusively at their colleagues. As a result, "ensuring senior management understanding and buy-in" remains high on the priority list for the majority of CIOs (92%). They also recognise the continuing need for self-development and that of their senior team. 83% say developing their senior IT management is a top or high priority in 2007. Although skill shortages look set to continue to hamper the development of IT teams with over a third (35%) agreeing they will be short of specific management skills over the coming year, particularly in the programme, project management and business analyst areas.
But despite the skills and communication issues, CIOs are optimistic about the prospects of their business. Two-thirds of CIOs felt quite or very optimistic about the prospects for their market sector, and even more for their own organisation (73%).
The outlook for IT spending varies but there was a major trend towards tighter supplier management in 2007. The objective of negotiating tougher terms with suppliers of commodity systems and services to enable more spending on strategic application development and other business change investment programmes was a top priority for 83% of respondents.
The critical success factors for CIOs in the current climate fell into three key areas:
• Delivering improved service at a reduced cost;
• Aligning IT services with business strategy;
• Facilitating business change and new ways of transacting business.
But many had even higher goals with more than a third (35%) of CIOs harbouring a strong interest in the CEO position.
"I see this as a sign of growing confidence and maturity", commented Nick Kirkland. "Today's CIO requires a wide range of experience and depth of business understanding, it is only natural that CIOs want to use this experience to take the next step."
Another significant development from the CIO Connect Census 2007 was the categorisation of CIO profiles, with their own priorities and characteristics. Building on research by Brinley Platts, the Census outlined Paratrooper, Consultant, Professional and Executive type CIOs:
- Paratrooper CIOs tend to come with their sleeves rolled up and are primarily concerned with updating the organisation's IT infrastructure: 72% say refreshing the current infrastructure is a major or significant challenge.
- Consultant CIOs tend to focus on redesigning business processes rather than concerning themselves directly with the underpinning technology and are putting more effort into business benefits measurements, to ensure that tangible results are delivered: 66% believe that IS's most critical value lies in improving business processes.
- For Professional CIOs delivering key business information is also high up the list. Of all of the CIOs, this group sees the pursuit of new business opportunities as a current driver for IS investment, and they are prepared to spend proportionately more on application development this year to support that drive.
Customer loyalty and confidence is high on the Executive CIO's agenda with as many as 60% seeing customer service as a "significant" issue and so most likely to be looking for new multi-channel customer channels through new IS developments.
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