For some time, the industry has talked about the CIO evolving from being a techie in the back room to a business visionary, adding a sprinkling of magic technology dust to the corporate strategy. And it seems this is finally coming true.
So said Adrian Hinchcliffe, editor-in-chief of Brainstorm, while unpacking the preliminary, top-level highlights from the 2020 CIO Survey at the ITWeb Brainstorm CIO Banquet held as a virtual event last night.
Now in its 7 year, the survey of South Africa’s top technology strategists and decision-makers is run in association with MTN Business. It captured input from 130 private- and public-sector CIOs, between September and November 2020.
Keys to success
“We started the research by looking at the CIO’s role, and the attributes that are key to success,” said Hinchcliffe.
The top three listed attributes are being a business influencer or strategist (74%), a leader, people manager or high-performance team-builder (64%), and being a visionary or innovator at 52%. The importance of tech knowledge ranked fourth (36%). Being cost- or budget-conscious was only cited by 11%, although this is likely to become more important in the months ahead, added Hinchcliffe.
The survey examined how the CIO role fits in the exco, and it’s clear that as technology has infused into the business, so too, over the years, has the role’s importance grown to the organisation, he said.
However, while some 39% this year said they have a seat on the exco, this is down from last year’s results of 45%. The remainder of respondents have indirect access or can request access when needed, which means that there is no consistent tech voice in the top decision-making group, noted Hinchcliffe.
Other data revealed that almost half of CIOs report directly to the CEO, which is positive news, rather than reporting in via a C-level colleague.
When asked what word best describes their IT operation’s relationship with the business or business leaders, encouragingly, 44% said ‘excellent’, another 35% said ‘satisfactory’, only 16% cited ‘a work in progress’, and 5% said ‘challenging’.
Skills, diversity
Once in the job, CIOs tend to stick around for quite a while – 64% have been in the role (across different organisations) for more than 5 years, and almost 40% for more than a decade.
“From one perspective, this shows a degree of stability and experience at the highest level,” said Hinchcliffe. “However, given that so many have been in their positions for so long, and so few for so little, it does raise questions about the opportunities for upcoming talent and skills of the next generation of CIOs. Is there a glass ceiling in place for younger wannabe CIOs?”
Tiyani Nghonyama, COO, Geekulcha, who joined the panel discussing the results, said he has been wondering what the future of the CIO looks like. “The lockdown imposed by the pandemic showed us there is a need to be a driver of change, and nurture upcoming tech talent, who are the next captains of industry. There is a lot of young tech talent and we need to ensure a proactive strategy. Upcoming CIOs need to learn from experience, and there’s room for that.”
He added that we should be putting pressure on businesses to do more to nurture future CIOs.
A first in the survey’s 7th year, respondents were asked to describe the state of gender and racial diversity within their IT organisation – ‘generally good’, said 46%; ‘getting there’, said 33%, 16% said ‘excellent’ and 5% said ‘poor’. While these results are generally positive, Hinchcliffe said, there’s still work to be done.
“We have a lot of work to do in this space,” added Thato Sopeng, head: Branch Network & Partnership Technology, African Bank. “A lot of the initiatives we're running now try to incubate female youngsters into STEM-type programmes, where we make sure that girls are getting exposure to science, maths and technology from a very young age, and encouraging them to start becoming coders. The opportunities are definitely there; we just need to have the political will to bring them on board and start incubating this young talent.”
On the subject of talent management, the survey asked CIOs about their current approach to hiring permanent IT staff. Upskilling, which was added this year, came in at over a third with 34%, while having an active internship or apprenticeship, on the other hand, was relatively low, with only 15% of respondents saying they had one.
The big discrepancy between the 2019 and 2020 findings is that a freeze in hiring increased from 13% last year to 33% this year - undoubtedly a sign of the times of Covid, commented Hinchcliffe.
The elephant in the room
It was inevitable that the survey examined the ‘elephant in the room’, as Hinchcliffe put it, i.e. the effect of the Covid-19 pandemic on CIOs and their organisations.
On the plus side, a whopping 67% said the pandemic accelerated digital transformation. On the downside, 11% of organisations admitted to consolidating business units, and 6% said they had to close a substantial part of their operations. Only 17% reported no significant change.
Unsurprisingly, when it came to the tech investments that they had to implement during the pandemic, nearly three-quarters (74%) said remote work solutions, followed by 65% with conferencing or meeting apps, 56% with Internet connectivity or data. Surprisingly, given the widened attack surface, only 52% cited cybersecurity.
When it came to how IT budgets have been affected during the pandemic, more than a quarter (26%) said budgets remained the same, but had to be re-prioritised. Another 24% said there was no impact, 21% said spending decreased, 21% said it increased marginally, and 7% said it increased significantly. Combining both sets of responses that indicated increases - an overall 28% - it goes to show that the focus on IT as an enabler has received greater recognition during the pandemic, said Hinchcliffe.
Speaking about the usual areas of focus that have been covered in the CIO Survey for some time, enabling digital workplace has grown in importance from last year (37% vs 28%), while enabling digital business remained a top priority at 59% for both years.
Wilhelm Krige, Group CIO, ABSA, commenting on the move to digital, said: “Simply staying alive is not an option. The companies that are going to win are the ones that come out swinging. After this pandemic, when it comes to starting to shift investment into digital transformation, there is no better time than the present. The pandemic caused some levellers in terms of competitive forces and really gave some of the laggards the opportunity to accelerate, catch up quickly and turn into leaders. So for me, the companies of the future are going to be those that are brave enough to shift money from other areas into digital transformation.”
Focusing ahead
Looking forwards, at the most important focus areas over the next two years, Hinchcliffe said there seems to be a more specific focus on survival.
Cost- optimisation has risen from 21% to 30%, cloud strategy and infrastructure consolidation has increased slightly from 22% to 26%, as has focus on PoPI and GDPR compliance, from 15% to 22%.
“Supporting new business and products has decreased, there’s less focus on AI and ML, more focus on maintaining IT operations. There is likely a sharpened focus for many organisations on strategic strengths and less so on the big bets.”
In Hinchcliffe’s view, the period of economic hardship ahead is probably going to push some organisations to move their CIOs and IT priorities back a step or two, falling back to the old way of operating, of keeping the lights on, and will be less about innovation and more about cost-efficiencies and enablement.
An economy in trouble
Looking to the future, how do the CIOs see their budgets changing in the year ahead? Some 34% said it will remain flat, 32% cited growth above inflation, and 16% are bracing for having less money to spend than this year.
“Compare that to 2019. There was, perhaps unsurprisingly, more positivity around outlooks last year,” said Hinchcliffe.
Looking at which major technology investments are driving the budget increase, if we add in 2019, he said, generally, across the board, there seem to be a lot fewer tech investment areas.
Pretty much everything is down, apart from the ERP and core business applications. It was interesting to see security investments fall from 63% last year to only 50% this year, Hinchcliffe said. Data analytics dropped to 32% from 46% last year, and automation from 40% in 2019 to only 30% this year.
In conclusion, Hinchcliffe noted that the SA economy had been in deep trouble before COVID-19. “We were in recession and had been pushed into ‘junk status’. Now, of course, we’ve been pushed even further into that pit. COVID undoubtedly gave organisations a platform to realise the benefits of work-from-home, and a greater reliance on technology.”
Hinchcliffe believes there will be some organisations that embrace the digital transformation and push on further down that path. “The CIOs there will be challenged by greater budgets and responsibilities, while others will refocus their priorities, avoiding gambling on risky bleeding-edge technologies, and consolidating their plans.”
At the other end of the scale, there will also be those organisations that have to cut the workforces, really take a scalpel to everything; the CIOs there will have to look at cost-optimisation and keeping the lights on and those are the organisations that are likely to push the CIO further away from the strategic conversations and back into the dark server rooms, he said.
You can view the executive summary of the results here: 2020 CIO Survey key findings
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