CIOs say the future looks bright but Cloud Computing and Governance remain issues on the horizon

19th January 2010: More than 70% of CIOs are positive about the business outlook according to the latest major piece of research undertaken by networking organisation CIO Connect. However, issues such as Governance and Cloud Computing remain troubling issues on the horizon, the report which surveyed 120 CIOs from some of the largest companies in the UK, North America and Asia, revealed today.

Despite all the talk of recession, survival and cost control, 71% of CIOs claimed to be either fairly or very optimistic about the broader business outlook, contrasting with 19% who remained neutral and 10% who were fairly pessimistic.

However, it was not all optimism, as CIOs were clear that there were many challenges ahead. Two-thirds of respondents said that business transformation had moved up their agenda (33% strongly). And as many as 65% of CIOs believed that business requirements in the future will change at a pace faster than the ability of the IT team to implement them. As a result of this fast changing pace, 53% also saw a growing role for “intuition” decision-making over detailed analysis in future IT planning and warned that this could only be achieved with an ever-deepening understanding of the business.

Governance and Cloud Computing Issues

On business technology issues, Governance appears to be a massive burden on CIOs. As many as 84% of respondents believed that Governance would have to become more agile, as too often today Governance is rolled into audit and compliance, taking up enormous amounts of time from the CIO, their team and business colleagues.

On Cloud Computing there was a clear split in opinion on whether the technology was having a major impact on the way IT was delivered; while 40% agreed (12% strongly), a fifth disagreed.

CIOs in favour felt Cloud Computing provided a radical proposition, offering huge potential for change because of the arrival of mainstream broadband, virtualisation and remote management techniques. Other crucial factors to the success of the Cloud included the globalisation of the supply chain, a maturing offshore model and a difficult economic climate. Interestingly, comments from respondents in smaller companies made it clear that Cloud Computing was something they were very ready to embrace, in the expectation of making IT a variable cost proportionate to business levels.

Finally, 78% of respondents believed that the consumerisation of IT was having a major influence on new ways of working, bringing with it opportunities but also security threats.

CIOs as business leaders

In terms of their own role, CIOs appear to be moving away from a direct reporting line into the CEO with 32% reporting to their CEO, 26% to the CFO and 24% to the COO; last year it was 45%, 24% and 16% respectively.

Alongside this change, also appear some changing priorities for the CIO. 61% of respondents strongly agreed that in the future they would need to do something more than structure and systems to lead IT effectively. As many as 54% of CIOs also appreciated that they would have to reduce their day-to-day control over the functioning of their departments to enable them to become more active in the business.

Commenting on the report, CIO Connect’s CEO Nick Kirkland said: “The demand for flexibility and responsiveness is such that many of the old ways of IT management are no longer adequate. Looking forward our CIO’s are very aware of the challenges they face and in the main are addressing those challenges with optimism.”

And as a result of the research, CIO Connect has called for all CIOs to take five steps today to prepare for the new world:

1. Working closely with business colleagues look at how the organisation might change during the next five years given the macro-economic realities
2. Assess their relationships with their peers – are CIOs considered a business leader? What could they do better? Are they seen as one of the team?
3. Review outputs with their leadership team to ensure that they are preparing for the changed world. Make appropriate changes, and communicate throughout the organisation why such alteration is necessary
4. Determine if their company’s governance is both strong enough to meet regulatory needs and flexible enough to deliver business benefit. Propose changes, and follow through the difficult challenge of getting agreement from business colleagues on how decisions are to be taken, separate from taking the decisions
5. Define how they will actively support business innovation