CIOs are having to increase innovation, and to do so on decreasing budgets, as a result of the economic impact of Covid-19.
The annual CIO Survey by search firm Harvey Nash and business advisory group KPMG is the first major analysis of the global CIO community since the pandemic led to so much tragedy, and a major slowdown in the world economy. This year's survey reveals that age-old challenges which have dogged technology leadership remain, as well as new obstacles exacerbated by the virus.
Globally CIOs gained a median additional spend of five per cent of their IT budget to deal with Covid-19, a figure never witnessed before. Five per cent represents $15 billion per week for the first three months of the lockdown.
Now though, and to no one's surprise, CIOs face major cuts, driven by organisations expecting a strong return on investment (RoI) from this brief period of profligate spending. There is now a need to make major savings, especially in those economies that mishandled the pandemic and have been hardest hit economically.
Sectors that are almost guaranteed to weather the downturn are of course making the lightest cuts, power generators, utilities, government, healthcare and technology firms will continue with strong IT spending. The drastically hit sectors of the leisure and airlines; charities and manufacturing will make the severest cuts to their technology investments.
At the beginning of 2020 just over half of the global CIO community had received a budget expansion. These increases focused on operational efficiencies, digital customer services as well as new technology products.
Although denied and ignored by a number of leaders in the west, the arrival of Covid-19 across Europe and North America in particular, led to a sudden shift of technology investment to enterprise cloud and software-as-a-service (SaaS).
Despite the ravages of the pandemic, 43 per cent of global CIOs predict a further budget increase, and 45 per cent plan to up the headcount of their teams in the near future. Compare this to the pre-pandemic figures, 51 per cent of CIOs expected more budget, and 55 per cent were preparing to build their staff numbers.
Given the impact on the economy, this drop in budget and headcount is slight, and according to Harvey Nash and KPMG, the budgets and headcount plans are healthier than they were in 2009, following the financial crisis.
Whilst those halcyon plans of the early days of 2020 had an eye on the future, post-pandemic, CIOs cannot see the horizon clearly. Six in ten say they will be unable to forecast long-term decision making for another three months, and one in ten CIOs believe it will take at least a year before any reliable forecasting can be completed.
Long-term technology plans have been replaced by operational improvements, as CIOs are tasked with reducing technology debt, and putting in the building blocks for the future. Across a number of CIO forums, there has been widespread talk of a second-spike of cloud technology investment, as those businesses that were unable to respond effectively to the pandemic had not fully embraced cloud computing.
Harvey Nash and KPMG find operational efficiency and customer engagement remain the top two technology priorities for organisations beyond the pandemic. Coronavirus exposed not only the impact of cuts to healthcare and poor national leadership, the virus also revealed weaknesses in business operations and customer service technologies.
"While for some organisations the crisis will have required a radical change in direction, for most it has served to accelerate what was already in place," the report stated.
As the world economy seeks a route to recovery, CIOs with a strong customer service ethos will thrive, as the report finds new customer channels, increased understanding of consumer behaviour, and digital customer engagement are high business priorities.
Over two-thirds of the organisations surveyed expect a major change to their existing business model as result of recent events; 29 per cent of respondents report a "surge" of interest in new ways of working following gains made during the pandemic.
Close to half of respondents (47 per cent), state that the pandemic has increased the pace of digital transformation. That said, the report highlights a change in what transformation means for many organisations, which Harvey Nash and KPMG believe will be more "conservative".
These conservative transformations are focused on modernising the technology architecture of the organisation, according to the report. Enterprise SaaS adoption of tools for the front, middle and back end of the organisation dominate the transformation plans of the responding CIOs.
In all likelihood this is a response to the pandemic from organisations that had not completed the cloud transformation of their legacy technologies so were on the back foot as the pandemic hit.
Next generation technologies have not fallen off the strategy document completely, many respondents cite artificial intelligence (AI) and machine learning (ML) remain key to improving productivity and quality.
"We are seeing the automation of workers, which will mean more jobs are augmented to make them more effective, and this is creating a new set of roles," said Steve Bates, global leader of CIO Centre of Excellence at KPMG.
"Our research shows that respondents are less confident that new roles will be found to replace lost jobs than they were before the pandemic," the report stated.
In IT, Bates believes there will be a growth in data architecture, integration, cyber security and risk roles. Bev White, CEO of Harvey Nash said a number of roles will morph into super-roles, much as the CIOs has done. The report concludes that tasks will increasingly disappear rather than positions, and it reminds the community: "We are already living in an automated world."
CIOs are feeling the benefit too, six in ten CIOs tell the survey they have more influence in their organisations as a result of the pandemic, but board representation continues to be a struggle, down to 61 per cent. Many CIOs though report that influence does not necessarily require board membership, and in those organisations that technologically responded well to the pandemic, their CIOs are likely to be in that one in ten that feel more influential.
"It is an exciting time to be a CIO, you will get listened to and your ideas are welcome," White said. Interestingly, 57 per cent of respondents state they have "significant influence" on what the report terms business-managed IT spending.
Over a third have influence, but no direct sign-off and six per cent have no influence at all. Last year's report identified the rise of the broker role, as CIOs embrace business-managed IT spending, and the 2020 report indicates the trend continues as greater collaboration improves customer service and business outcomes.
CIOs are in a position to reap the benefits of setting down good foundations for their organisations, as tech teams played a crucial role in the lockdown to ensure remote operations worked. Harvey Nash and KPMG find three in ten respondents had the infrastructure in place to deal with the pandemic.
The rise in remote working has increased the threat landscape that cyber criminals seek to exploit, 41 per cent of CIO respondents report an increase in cyber security incidents, with phishing and malware attacks the most common.
A quarter of global respondents' report that the majority of their workforce will be working remotely post-Covid. As a result, cyber security skills are in high demand from those CIOs with budget to recruit. Demand for technologists remains strong, recruitment firm Harvey Nash claim from the research. The vast majority of respondents are seeking full time employees (FTE), with only 24 per cent expecting to be using flexible staff.
Despite the demand for technologists, diversity remains challenging.
"Participation of women in technology leadership remains stubbornly low, although some headway appears to be happening in Latin America, which is benefiting from specific programmes designed to get women into the world of technology," the report stated.
"The remote working, or work from anywhere, is an opportunity for more women to come into the workplace, and the same for those with care duties. It is the work that is important, so there is an opportunity, and that makes the talent pool bigger," White of Harvey Nash added. The report concurred with White, stating that the term remote is likely to be dropped as workers begin to reflect the technology they use, and location becomes less important.
The CIO role
With budgets decreasing and the spend that is available targeted towards modernisation of infrastructure - into the cloud - and cyber security, the survey indicated a demand for excellence in technology operations. For some CIOs this will herald-in self-reflection, as they decide whether their skill set is delivery and operations, leaving others to be stakeholders and influencers at the board level.
"I have seen a resurgence of CIOs going back to their roots and getting more interested in the underlying platforms," White added. Such a move is not a step backwards, as business and technology becomes more complex in this distributed environment, good CIOs will need an operations leader who they can rely on to have a firm grasp on the service, security and partners, but has all the business acumen that they rely on as a board level CIO.
Having closely followed the Harvey Nash/KPMG CIO Survey since 2008, it is clear that the CIO role continues to be vital to the sustainability of the business. Technology leaders stepped up to challenge in the response to the banking crisis of 2008 and 2009.
In the years since the role progressed and gained recognition. In 2020, once again, CIOs have enabled organisations to find new ways out of the challenges thrown at them by the wider world. It is important for the role to capitalise on this opportunity, but also to tackle the now sadly entrenched problems of diversity and skills shortages.
The Harvey Nash/KPMG 2020 CIO Survey surveyed 4,200 business technology leaders across the world.