The last few months has put CIOs and their teams under huge strain, as they made great efforts to keep businesses connected as staff shifted to home working. But tech chiefs will face a new series of demands on them in the next few months as they are asked to push forward with their digital transformation plans and introduce new technologies – even as they struggle with shrinking budgets and the constant battle to find the best qualified staff.
According to research by recruiter Harvey Nash and KPMG six out of ten (61%) CIOs report that IT leaders are more influential as a result of the crisis. The question now is whether CIOs will retain that new influence.
"CIOs have pulled off what most of their executive peers would have considered impossible just a few months ago. I think they've gained a lot of credibility. They proved that accelerating the digital transformation at scale wasn't just possible but an imperative," says Steve Bates, principal at KPMG.
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The survey polled more than 4,200 digital leaders globally and found that companies spent the equivalent of around $15 billion extra per week on technology during the first three months of the crisis. CIOs spent the money on cloud computing and security to enable secure home working.
And that remote working is here to stay – 86% of IT leaders moved a significant part of their workforce to remote working during lockdown, and 43% expect more than half of their employees to work from home after the pandemic.
Culture represents another area of significant change. As a result of remote working, 70% of IT leaders report increased collaboration between the business and technology teams. IT has in the past been seen as business backwater. In the past six months, the tech team has been the business enabler.
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Where do we go from here?
But next comes a new set of projects for the CIO and the IT team. For almost half (47%) of IT leaders, COVID-19 has permanently accelerated digital transformation and the adoption of emerging technology, such as artificial intelligence (AI), machine learning (ML), blockchain and automation. To be really influential in the longer term, CIOs will have to do far more and give the business the emerging tech it wants.
"The CIOs that hold on to their influence are going to recognise that they've got to continue to accelerate this adoption of differentiated technologies and capabilities and they're going to move the needle on investments of cognitive, on zero-trust security, on hyper automation, on blockchain and advanced analytics," says Bates.
He says influential CIOs will take these emerging technologies and insert them into "the main line of the business". They will deliver to the business' increased expectations and help the organisation exploit these technologies for competitive advantage.
But if they're going to do that, it's going to have to happen on a much tighter budget.
Although technology spend has risen dramatically during the pandemic, budgets will be under more strain over the year ahead. Prior to COVID-19, over half (51%) of IT leaders expected a budget rise in the next 12 months, but during the pandemic this number declined to 43%.
And despite the huge amount of work to be done, skilled tech specialists will remain tough to find. IT leaders cite cybersecurity as the key skill shortage (35%), followed by organizational change management (27%), enterprise architecture (23%), and technical architecture and advanced analytics (both 22%).
Lily Haake, head of the CIO Practice at recruiter Harvey Nash, says this combination of financial and human-resourcing pressures creates a big challenge for CIOs. She says one of the key insights that comes through the survey is that strong digital leadership will be crucial during the next 12 months.
"The pandemic has opened everyone's eyes to the fundamental importance of technology," she says. "Irrespective of what sector you're in, every business is relying on technology to survive at the moment – and that's going to remain a key factor going forward."
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How do we get there?
KPMG's Bates says the ability of CIOs to carry on exerting their influence in the longer term will depend on the pace of the economic recovery. Even in the case of IT departments that have coped effectively thus far, there is no room for complacency. Economic circumstances will mean business requirements are likely to continue changing rapidly.
"CIOs have to be able to keep pace with the business, and then provide the ability for the business to quickly throttle up or throttle back – because it's going to be a very volatile market. And to do that, I think that they have got to have a shortlist of strategic priorities," he said.
- First, CIOs should make a permanent change by creating a cloud computing backbone for their operations. They should back this transition up by looking to adopt dynamic investment processes. Long-term budget forecasting and investments are too monolithic and static; CIOs will need to be able to move quickly.
- CIOs must also ensure their organisations continue to adopt modern delivery practices. Bates refers to the introduction of DevOps, agile at scale, and intelligent automation. "Once again, those practices will help the business to keep pace and to be able to deliver continuously," he says.
- In terms of underlying technology, CIOs must ensure data really is the firm's most crucial asset – they must provide the tools to help the business understand customers and employees, and try to keep pace with their changing needs. "They actually have to stop talking about big data and they must re-architect their data supply chain to get that insight," he says.
- CIOs must prioritise investment in cybersecurity above all other areas. Bates says the move towards cloud and the increased importance of data will feed this trend, as will continuous regulatory changes to help govern the new normal: "You're going to have to think about how you embed technical trust in everything you do."
The next year is likely to be as unpredictable as the past six months. For Bates, the mantra is simple – there's no going back to how things were. Managing rapid digital transformation has afforded CIOs a new position of influence. Now they must help their organisation to thrive and survive in the post-COVID age.
"The organisations that emerge from COVID stronger, leaner and more competitive and going to find themselves living in a much more digitally connected world," he says. "And the CIOs that help their business to do that are going to maintain their influence because there's no other function inside the organisation that's as well placed to lead that change."