Computer Weekly's CW500 Club kicked off this year's meetings with a look at the challenges CIOs are likely to face in 2014
With speakers from the IT consultancy, IT analyst and recruitment sectors, there was a broad range of predictions for the year ahead.
Lee Ayling, partner and head of the UK technology practice at KPMG, talked about the economic recovery and the return of business confidence; Ovum analyst Adrian Drury talked about the technology trends facing CIOs; and Albert Ellis, CEO at Harvey Nash, shared his insight into the IT skills and recruitment market.
But perhaps more fascinating was the discussion that followed, when the audience and speakers discussed the changing role of the CIO amid trends such as consumerisation and shadow IT.
The answer to the question, Is the CIO still as relevant today as in the past? was a resounding yes, with the caveat that they need to change their ways.
IT supply and demand in growing economy
Ayling began by talking about how the demands on the CIO are changing alongside major changes in how IT is supplied.
He said there is confidence in the market – and about 80% of the audience agreed. “2013 was a difficult year because we were all a bit nervous, but we gradually came out of recession,” said Ayling.
If you continue to deliver IT as you did in the past you will get the same results, whereas businesses want something different
Lee Ayling, KPMG
He said experts are now bullish about the UK economy, and even relayed views from within KPMG that the UK economy could grow by as much as 4%.
“There is lots of demand on IT from the business now,” Ayling added. “But if you continue to deliver IT as you did in the past you will get the same results, whereas businesses want something different.”
He said CIOs must listen to the business more and understand what they need.
Ayling relayed the example of a business head at a large organisation who was planning to bypass the CIO – a trend which is being seen more and more.
“An HR director had been to a conference and seen an HR technology platform that she could procure in the cloud and scale up to the 6,500 employees in the organisation very quickly.
“She told the CIO, ‘I am not going to spend £150m with you on upgrading SAP, I am going to buy £2m worth of Workday licences'.”
Ayling pointed out that the CIO became irrelevant in the HR director’s thought process.
“IT leaders need to upskill and learn to engage with the business, because they are going to engage with you,” he added. “They want you to deliver IT from an app store.”
IT is transforming business operations
Ovum's Adrian Drury went further on the technology changes that are transforming how businesses operate, saying scale and its commoditising power is the most powerful force in the technology market.
“We are seeing scale in the smartphone market that we have never seen before with any device,” he said.
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- CW500 in the city: IT innovation in financial services
Drury said smartphones are presenting the biggest transformational changes to business, with sectors such as banking, retail and transport having to change IT and business processes to meet demand for mobile services.
“The impact of mobility is changing how industries work today,” he said. “As a CIO, if you are not thinking about how you can enable your business to use mobile to change the way it deals with customers, you are missing a trick. And it is not just about customers, but also employees.”
Drury said the increased use of mobile devices by employees is creating the era of multi-screens, where workers want the same experience regardless of the device they are using. This, in turn, is making employees look online for apps that can support their any time, any place, any device working habits.
They don’t want to use SharePoint, they want something like Dropbox. “If you are not providing staff with a cloud collaboration platform, they will do it themselves.”
He said mobility is also affecting infrastructure and cloud strategies. “Employees and business departments want to use apps when and how they want. If you don’t enable this, they will find an alternative way, at an individual or department level.”
Drury also named big data as a space to watch, although he added that it will be restricted to a small group of businesses.
“For very large organisations with the scale and resources, big data will be big this year. You have to be FTSE 100 to take advantage of big data, so the question is how to take it to the mid-market?"
Looking deeper into the crystal ball, he said wearable technology will probably arrive under Christmas trees later this year, and it will create changes in demand from consumers.
This is linked to big data, with wearable technology promising to give sectors such as retail value information about customers.
“Wearable devices are going to provide huge volumes of data. Businesses will be able to get detailed information from consumers,” said Drury. “In 2015 we will start to see scale in some of these devices.”
For very large organisations with the scale and resources, big data will be big this year
Adrian Drury, Ovum
He predicted that video is also going to be big this year. “Video is big and is going to get bigger, particularly on mobile devices.”
Video communication and adverts are examples of how video is being used in business. He said this will put pressure on networks, which means CIOs will have to upgrade networks to support this, as well as things like bring your own device (BYOD).
He concluded with the unsurprising news that security will be a massive challenge for IT leaders this year. This will be a direct result of the trends he mentioned, which mean more customer data collection and staff working on their own devices.
It is the IT department's responsibility to make sure businesses can benefit from these technologies in a secure manner, he said.
The skills challenge
All the trends mentioned by Drury, and many others that have emerged in recent years, mean IT is no longer something that keeps the business running, but an engine that drives business.
As a result, getting the right people and skills in place is vital.
The marketing department will have more say over IT spend than it historically had
Albert Ellis, Harvey Nash
Harvey Nash CEO Albert Ellis gave his thoughts on getting the right people to manage all the change.
“You hear daily about machines taking over the jobs of humans, and the pace of technological change is absolutely astounding. CIOs are responsible for a lot of spend now, and it is only going to get better,” he said.
In the IT sector, Ellis said there is pressure from good staff for more money. “In IT, wage increases are in double-digits.”
He said other pressures on IT leaders include the increasing control of IT budgets from marketing departments. “The marketing department will have more say over IT spend than it historically had.”
Ellis said digital technology budgets are today split into three almost equal amounts, with a third owned by IT, a third by marketing, and another third shared between the two.
“There is no consensus about how this will work. We are in new territory here,” he said.
Like the speakers before, Ellis said shadow IT, where individuals or departments procure their own IT, is a trend affecting all IT departments.
CIOs in 2014 will need business strategy and emotional intelligence to succeed, he said, adding that CIOs increasingly understand that they must influence the business.
CIO more relevant despite consumerisation of IT
When the debate opened to the floor, talk turned to the importance of the CIO in today’s business and technology environment.
More on IT consumerisation
Attendees discussed the dangers of people in the business having a little knowledge of IT. This is a result of the consumerisation of IT, leading to business departments and individuals self-provisioning IT.
But rather than see this as a threat, CIOs should consider it an opportunity to support the business. The CIO and the IT department have the skills to understand the benefits and limitations of certain technologies, as well as possessing the expertise required to implement it in a highly secure way.
One IT head said: “We have to look at the world in a different light. The future roadmap of a CIO is learning corporate de-aggregation. It’s the ability to know how to take it apart, which bits to take apart, and impact that will have.”
He said the CIO must understand the impact of implementing a request from a marketing or financial leader. “That’s what we have to learn – and rapidly.”
One comment from the floor summed up the general feeling in the meeting: “Excluding the CIO is always a bad decision.”