CXO investigate

Stop doing what the vendors tell you, CIOs told

Corporate IT strategies are too often bland rehashes of what's come before, says Gartner after surveying more than 2,000 CIOs on their plans for the coming year.

In business, setting priorities is essential: whether you're a retailer focused on selling at the lowest possible price or a boutique that prizes customer service above all else.

The problem with CIOs is they don't appear to share the singular focus of their organisation. In general corporate IT strategies are largely interchangeable and loaded with generic statements about cost and service levels.

So says Gartner, which each year polls more than 2,000 CIOs to ask them their priorities for the coming year.

"I review about 100 companies' IT strategies a year and the vast majority of them are quite vanilla: 'We're going to have every piece of information available on every device', 'We're going to be lowest cost', 'We're going to be the highest service level'," said Dave Aron, Gartner VP and fellow in the CIO Research Group.

"There's not enough volatility in priorities. Every year we see companies in different countries, different industries and hugely different economic and regulatory contexts but when we ask CIOs what their priorities are they are worryingly similar.

"It suggests that CIOs are there tending their IT gardens, saying 'Yeah, yeah growth, cost', but very few have got a clear, strategic approach based on their posture as a company."

Aron suggests that CIOs need to start looking at what work they can afford to shelve, in order to free up time to focus on projects that will drive the biggest business value.

"Say your business has decided it's going to win through deeper customer intimacy and having more targeted, richer interactions with customers," he said.

"Rather than aggressively replacing a supply chain management system to drive down inventory and supply chain costs...use that budget to do aggressive big data projects and deeply understand customers using social media buzz.

"The age of vanilla IT is dead, don't just do what your vendors tell you and don't try and do everything."

Aron cited the German start-up Friendsurance as an example of a company tailoring its IT strategy to driving business value. The company allows people to take out group insurance policies with people they are linked to on Facebook. The fewer people in that group who have made a claim by the end of the year, the more money each member of the group gets back on their premium.

"It massively increases the quality of risk because you won't insure with your crazy friend who drives a Ferrari," said Aron.

"It unlocks a lot of business value and it's a much more compelling social strategy than a company letting people 'Like' them on Facebook."

Jos Creese is head of information at Hampshire County Council and has more than two decades of IT management experience. He said that just because an IT strategy appears generic on a superficial level, it doesn't mean the CIO is failing to serve specific business needs.

"There are justifiably many commonalities between IT strategies in any business or service organisation -public or private sector," he said, adding these ranged from greater flexibility in IT delivery models to smaller scale projects and more agile delivery to BYOD.

"'The best' distinguish themselves from 'the rest' in how they use common tools innovatively and effectively and how they apply and align common strategic themes more tightly to the business needs and priorities of the organisations they serve."

Gartner's perception of CIO disengagement could be explained by disempowerment. The most commonly given reasons by CIOs for their organisation not getting business value from IT were factors outside their control - such as the organisation not being prepared to run business change projects or being unwilling to embrace enabling technologies like public cloud services or BYOD, Aron said.

On average organisations realise only 43 per cent of IT potential business value, according to CIOs questioned for the survey.

Lack of IT budget was another common reason that CIOs said organisations are failing to get business value from IT. The survey showed CIO IT budgets have been flat to negative ever since the dotcom bust of 2002. For 2013, IT budgets are projected to be slightly down, with a weighted global average decline of 0.5 per cent.

The survey found the top business priorities for CIOs in 2013 were increasing enterprise growth, delivering operational results and reducing enterprise cost, while their technology priorities were analytics and business intelligence, mobile technologies and cloud computing.

About

Nick Heath is chief reporter for TechRepublic UK. He writes about the technology that IT-decision makers need to know about, and the latest happenings in the European tech scene.

5 comments
Tony Hopkinson
Tony Hopkinson

instructions ended up in a position where they could...

Pete6677
Pete6677

Just remember that the vendor's mission is to sell you as much stuff as possible. Don't believe what they say without independently verifying if their solution is in fact the right one. And don't adapt the latest technology or IT trend just because other companies are doing it. Make sure its what makes sense for your unique situation.

info
info

Take their example of ignoring a project that improves efficiencies and cuts costs in favour of increasing their presence/capabilities in social media, because they've decided that they can improve business by being more 'warm and cuddly' with the customer. Poppycock! While this might be reasonable in a 'think-tank' scenario, quite a few of us have learned this lesson the hard way. 'Customer Relationships' come secondary to financial concerns. Sales tried this tack years ago, and I could see it's failure right away. "Sure our prices are higher than our competitor, but look at how friendly we are!" Sorry. Perform for me, and you'll get my business. Just because you add a coating of icing doesn't necessarily make it better.

CACASEY
CACASEY

I am getting tired of hearing reports of Gartner admonishing CIOs for similar behavior and then turning around and giving legitimate reasons why the behavior they are reporting is justifiable. This piece from Mr. Heath is a classic example. The dynamics here are clear: unless and until "the business" embraces the added value IT can bring to their enterprises and that realizing that value requires money, time and risk (just like any other investment) the same pattern will repeat. Chances are better than even that business with "vanilla" IT initiatives who complain they aren't seeing innovation are cutting IT budgets and keeping IT under the thumb of the CFO. Innovation is not likely to emanate from this traditionally risk-averse arrangement.

Michael Kassner
Michael Kassner

I find it troubling that an entity can come in for a short period of time and think they know what is better for a company than those that are there day to day.