GartnerGroup's annual review of its Executive Programs (EXP) membership clearly shows the business environment is getting tougher across all fronts. Drawing on input from 1500 members in North America, Latin America, EMEA (Europe, the Middle East and Africa) and Asia/Pacific, The CIO Survey identifies business trends, IT priorities and concerns. The survey was conducted between October and December 2000, with many members and associates reviewing the results and interpreting the outcomes and their implications.
Results from the survey indicate today's major focus is on business performance. The survey's top 10 business drivers, in the area of economic, operating and market trends, show more challenging conditions are on the way for CIOs.
Top 10 Business Drivers by Impact
1. Cost pressures
2. Shortage of skilled people/resources
3. Single view of customer and customer relationship4. Growing security and privacy concerns5. Market/industry changes caused by e-business6. Sustained innovation7. Reduced product development cycles8. Demands for increased shareholder returns9. Rise of consumerism10. Active management of knowledge capitalThe key findings are: the environment is getting tougher, costs pressures top the business agenda and the skills shortage continues - yet there's also demand for higher performance. This year will be harder.
There are some surprises - globalisation isn't in the top 10. But this is high on the agenda with a group of our members managing in multiple countries with diverse cultures and markets - not to mention IT infrastructures. Similarly the impact of mergers and acquisitions is more keenly felt in Europe and North America than in Asia/Pacific.
In the context of the toughening business environment, the survey revealed the changing nature of IS management priorities.
Top 10 IS Management Priorities
1. Strategising for IS/business linkage
2. Attracting and retaining quality people3. Leadership and guidance for board/executive4. Nurturing and sustaining IS competencies/people5. Demonstrating business value of IS6. Developing e-enabling IT architectures7. Program/project management8. Prioritising projects9. Developing the IS organisation as a professional services business10. E-business process management capabilitiesNear the top of the list is providing leadership - the principal role for the CIO. Board level participation and real executive visibility for CIOs is a recent phenomenon for most enterprises.
In response to the business and IS skills shortage, two priorities rated highly: attracting and retaining quality people and nurturing and sustaining IS competencies.
Retention is as challenging as attracting staff in the first place. One counter-intuitive finding is that the more an individual's market value is increased through training and exposure to hot technologies, the easier it becomes to retain them.
Retaining IS competencies within an organisation is no longer the simple corporate "golden rule" - those with the gold make the rules. Most of the valuable IS people today are already high achievers and well up the scale on Maslow's need hierarchy chart. These people are looking for the components that allow them to achieve "self actualisation" - the project, the knowledge, and the self-commitment that makes them who they are.
Steps to achieve success here could include identifying your key competencies, conducting an audit of existing abilities to determine gaps, and then focusing on recruitment, partnership deals, vendor choice and training to fill these gaps.
The need to develop IS professionalism is another IS management priority. This requires being able to demonstrate the business value of IS, ensure competent program and project management, create an informed project prioritisation process and develop the IS organisation to the point where it thinks and acts like a professional services business.
Finally, CIOs are giving high priority to e-enabling IT architectures and e-business process management capabilities.
Among the top 10 IS management priorities, three were notably absent: IT cost reduction, IT integration following mergers and acquisitions, and dealing with legacy systems and attitudes. I think that the most significant of these is IT cost reduction; remember, cost reduction was ranked the top business driver. This is good news as it implies that investing in IT is seen as a way to reduce business costs overall, as well as critical to growing business.
A word of caution though. We are seeing some shifts now in this area due to the economic downturn, especially in the US. But its absence from the top 10 IS management priorities is certainly significant.
The IT priorities were clustered into three areas: e-business technologies, market-capture technologies and cost-control technologies.
Top 10 Information Technology Priorities1. Internal e-business infrastructure2. Enhancing security3. Network management/infrastructure4. Building inter-enterprise e-business processes5. Applications integration/middleware/messaging6. Implement customer relationship management7. Applications scalability8. Deploying enterprise portals9. Desktop management10. Windows 2000 deployment/integrationSince one of the tenets of e-business is using technology to change the way business is transacted, it is not surprising that market capture technologies dominate 2001's IT priorities. The market-capture IT priorities for 2001 are CRM and applications scaling.
The survey identified three cost-control technologies as high priorities: network management, desktop management and Windows 2000. Interestingly, these cost control areas are often the first ones to be outsourced.
Significantly, XML did not make it into the 2001 top 10 list of priorities. Integration of e-mail into the call centre and integrating ASPs into the enterprise was also a surprisingly long way down the ranking for 2001 and didn't do much better over a three-year time scale.
Cost pressures and the shortage of skilled people are two of the top three trends in every region. These are clearly universal trends.
In North America, the growing security and privacy concerns are the top trend, though this comes third for the Asia/Pacific region and tenth in Europe. This could be because these issues have already been on the agenda in Europe for some time.
In Europe, globalisation is fourth, but this did not rate a mention in the top 12 for either North America or Asia/Pacific. Clearly the real challenges here are most acute for European-headquartered organisations that operate across multiple jurisdictions.
The top three IS management priorities ranked in the top five across all regions. Strategising for IS/business linkages, attracting and retaining quality people, and leadership and guidance for the board and executive are shared priorities.
The penetration of IT into every business area brings with it new unequivocal expectations for CIO performance. We see seven clear medium-longer term implications:l Manage for a less-stable, less-predictable business environment l Disaggregate investment into two buckets: those aimed at cutting business and IT costs and those to fuel growth l Understand the new transparency of the CIO and IS organisation - with greater visibility comes greater vulnerabilityl Integrate IS and business performance measures - your performance measures should be as close as possible to other executivesl Carefully configure executive responsibilities for e-enabling the business - make sure everyone is clear on who is responsible for whatl Up skill in supply-side management - managing external service providers needs very different competenciesl Take on the role of executive coach - don't be afraid to mentor your colleagues in the areas you know bestThere are some clear actions that need to be taken now. Spend the IS budget wisely - and be seen to do so. Proactively respond to the economic cycle: look for ways to cut your costs. Set out an integrated program of actions that anticipate the drivers of a down cycle on IS.
Anticipate changes - don't wait to be told.
Dr Marianne Broadbent is group vice president and global head of research for GartnerGroup's Executive Programs
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