CIOs are playing the field in outsourcing, shunning the big providers in favour of links with smaller firms title=

CIOs are playing the field in outsourcing, shunning the big providers in favour of links with smaller firmsPhoto: Shutterstock

The recession has left its mark on the IT function – forging a leaner, more strategic and business-focused department that is less monogamous in its dealings with outsourcers, a survey of thousands of global CIOs has found.

“Today the CIO is more strategic, has a more influential voice at the top of their organisation, has a more complex range of priorities and is more global in outlook,” the 2011 Harvey Nash/PA Consulting Group CIO Survey report notes. “The pace of evolution has accelerated during the recent recession with a greater burden of responsibility being placed on CIOs to contribute to major change programmes.”

While CIOs are still required to control costs and maximise efficiencies to ensure their organisation has a stable platform for growth, the survey notes that the strength of focus on these two priorities is dropping. Last year the survey found almost three-quarters, 74 per cent, of polled CIOs listed cost saving as a top priority, but this year the proportion has dropped to two-thirds, 67 per cent.

“CEOs are looking to their CIO and the technology team to deliver both internal and externally focused technology innovation to help their organisation outmanoeuvre the competition and win the future,” the report notes.

Driving revenue growth is now a priority for more than a third, 37 per cent, of the CIOs polled, while enabling business change is a focus for close to half, 44 per cent.

“The CIO is being asked to fulfil a more complex dual role where they have to maintain the tight cost control and departmental fitness achieved during the recession years while also ensuring sufficient technology capacity and flexibility exists to enable the organisation to pursue growth,” the report adds.

When it comes to staffing, the survey found CIOs are increasingly turning to flexible labour, with most of the CIOs polled, 76 per cent, having a flexible labour component of up to a quarter of their workforce – including contract, temporary and offshore IT workers. The vast majority, 84 per cent, said they are looking to increase or maintain this level of flexibility over the next 12 months.

CIOs are also spending a greater proportion of the IT budget on outsourcing than ever before, according to the survey. Almost a third of global CIOs will spend up to a quarter of their entire IT budget on outsourced activity this year, it found, while almost half, 46 per cent, said they expect to increase their outsourcing spend in the next 12 months.

But on the outsourcing front, CIOs are playing the field, shunning some of the big outsourcers in favour of partnering with multiple, smaller, niche suppliers that can provide specialist skills to help drive innovation in areas such as mobile and cloud computing. The survey found more than a third, 39 per cent, of the CIOs expect to increase their dependence on multi-sourcing in the coming year.

On the skills side, IT chiefs are focused on…


Little fish: CIOs turning to multi-sourcing from niche suppliers to provide specialist skills

CIOs are looking to multi-sourcing from niche suppliers to provide specialist skills to boost innovationPhoto: Mattie B

…beefing up business rather than technical skills inhouse – which corresponds with the rise of flexible labour and the growth in multi-sourcing, the report notes.

The survey found there has been a significant drop in the proportion of CIOs feeling their organisation lacks technical skills, with less than half, 42 per cent, of the respondents identifying an inhouse IT skills shortage – a 16 per cent drop on last year’s survey. The most in-demand skills for inhouse IT teams are business analysis and business-facing architecture.

The survey also found cyber security is an area of growing concern for CIOs – especially when it comes to internal risks. The proportion of CIOs feeling exposed in multiple areas from internal threats was almost double the proportion feeling at risk from external threats – 13 per cent compared with seven per cent.

“As companies emerge from recession, CIOs are facing new challenges presented by a world which is increasingly mobile, using social-networking tools to transact and communicate,” said Albert Ellis, CEO of Harvey Nash, in a statement. “Technology leaders have to deal with the two main priorities from the CEO: driving innovation particularly in the mobile applications area, while continuing to manage costs.

“The result is an increased dependence on a flexible, multi-sourced environment which has impacted on the CIOs and the skills they need in their teams. Not only must technology functions be business-facing rather than technical, leadership is required from both the CIO and CEO to meet the challenge of the new mobile and socially networked world.”

“CIOs need to be agile on a utility-innovation spectrum, flexing their approach to respond to the combination of a volatile financial environment, a more open, connected IT model and their organisation’s particular circumstances,” added Tom McEwan, global head of IT consulting at PA Consulting Group, in a statement.

Half of polled CIOs now sit on the operational board or executive management team of their organisation, according to the survey, a rise of eight per cent on last year. Most polled CIOs, 69 per cent, also report having more strategic responsibility – the first time that figure has ever passed two-thirds of respondents.

The 2011 Harvey Nash/PA Consulting Group CIO Survey polled more than 2,500 technology leaders around the world.