NEW YORK and LONDON, June 15, 2011 (GLOBE NEWSWIRE) -- CIOs must get the balance right between utility and innovation in order to secure influence in the future, according to new research from PA Consulting Group and Harvey Nash. The 2011 survey of over 2,500 CIOs and IT leaders reveals that CIOs are playing an increasingly influential role within their organizations – 50% now sit on the operational board or management team. However, the main demands on them remain cost saving, increasing operational efficiencies and delivering consistent and stable IT performance to the business. CIOs need to consider the right balance between the utility and innovation components of IT.
Balancing risk and opportunity
Striking the right balance is a challenge. The top three issues that management boards are asking CIOs to address are: saving costs (67%), increasing operational efficiencies (65%) and delivering consistent and stable IT performance to the business (64%). An excessive focus on utility activities can undermine the pursuit of technology innovation.
Focusing on either extreme of the utility-to-innovation continuum is not an option for ambitious CIOs. Those that simply focus on utility will run the risk of becoming the equivalent of facilities managers as work is increasingly outsourced. Meanwhile, those pursuing a strategy of innovation must remember the importance of keeping the lights on – it's all very well to offer the business the latest social networking app, but if core business operations are hampered by IT failure, the CIO's career may be over.
How the balance changes from industry to industry
The balance between utility and innovation is different in every industry. CIOs in city markets lead on innovation with 77% focused on innovation, with retail (75%) and financial services (71%) close behind. At the other end of the spectrum, less than half of CIOs in pharmaceuticals are focused on innovation, and less than quarter in both construction and engineering are innovation focused.
Cloud remains contentious
In 2010, 51% of CIOs were considering using cloud computing. In 2011, there is still a mixed picture of use. Despite the much cited benefits, 8% of organizations that have considered cloud have discounted it for their organization and only 22% of CIOs are exploiting cloud for core business processes. CIOs are still resolving where cloud can and cannot add value as part of their business model.
"The challenge for CIOs is to not only find the right balance between utility and innovation for their organization, but to also recognize that achieving equilibrium is a moving target," said PA Consulting Group's David Elton, IT and change management specialist.
"There is constant change in the business environment and in business appetite for risk. Outsourcing is increasing, cyber security is a growing concern and cloud is a potential game changer, albeit with a lot of firms in wait and see mode. All of these trends are creating an opportunity for CIOs to innovate and collaborate, but it also means CIOs constantly have to adjust the utility and innovation balance in their organizations. But for those that get this balance right, the prize is real influence in the business, rather than simply being seen as facilities managers," said Elton.
"Driving innovation whilst continuing to provide core technology utility services to the business will be increasingly demanded from CIOs as we move out of recession," said Albert Ellis, Harvey Nash Chief Executive Officer. "Securing the company's data and technology from cyber attacks, while at the same time exploiting the growth of social media for business use will be the key challenge facing CIOs in the coming decade. And yet we are increasingly seeing these hybrid CIOs on our shortlists, many of whom see the CIO role as a stepping stone to something much bigger," he said.
Securing influence
An organization's position on the continuum is not fixed. In order to get the balance right, CIOs need to:
- Foster a shared understanding between IT and the business of the issues the CIO should be prioritizing. CIOs need to look ahead at the internal and external factors that will determine these issues and create a shared vision and understanding
- Consider the current and ideal position of their organization on the utility-to-innovation continuum – CIOs should recognize that, before they can innovate successfully, they need to earn trust by getting the utility component of their activities right
- Ensure their team can accomplish both utility and innovation activities concurrently and flexibly. These different types of activity require different approaches, skills and attitudes. For example, any kind of innovation requires an open culture of collaboration where the business is willing not only to take a risk but also to accept the possibility of failure.
Ultimately, an organization's position on the continuum will reflect a series of movements as CIOs react and adapt to the forces shaping their environment. Those that get the balance right will ensure they - and their function - are on the path to increasing influence in the business, rather than being simply facilities managers.
The decision is theirs as to which route they take.
About the survey
The survey was conducted online by PA Consulting Group and Harvey Nash between November 18, 2010 and April 4, 2011 among 2,575 senior level IT professionals from businesses across the world. This is the 13th in a series of annual CIO surveys conducted to identify emerging trends and issues in IT leadership that has firmly established itself as the industry benchmark over the years. To request a copy of the PA Consulting Group and Harvey Nash survey, visit www.paconsulting.com/ciosurvey2011
About PA Consulting Group
PA Consulting Group is a leading management and IT consulting and technology firm. Independent and employee-owned, PA Consulting operates globally in more than 30 countries and transforms the performance of major organizations in both private and public sectors.
From initial idea generation and strategy development through to detailed implementation, PA Consulting delivers significant and tangible results. PA Consulting has outstanding technology development capability; a unique breadth of skills from strategy to performance improvement, HR to IT; and strong expertise in communications, defense, energy, financial services, government and public services, healthcare, international development, manufacturing and water. For more information about PA Consulting Group, please visit www.paconsulting.com.
About Harvey Nash
Harvey Nash, a global professional recruitment consultancy and IT outsourcing service provider, is committed to delivering the very best talent and IT solutions to a broad base of international clients. The Group is a trusted advisor to some of the world's leading business, governments and institutions. Operating from 39 offices covering the USA, Europe and Asia, its talented professionals pursue the highest levels of integrity and quality in providing a unique portfolio of services: executive search, interim management, IT and finance recruitment and IT outsourcing.
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