Research 2010 Global Cio Report 2412787

8/3/2019 Research 2010 Global Cio Report 2412787

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R et ur n t o G ro wt h:2010 Global C IO Report

Theres an increased focus today on growth-oriented IT

projects compared with a year ago, our exclusive survey

of top-level IT leaders finds. CIOs are worried about

having the agility and budget to meet rising demands.

CIOs showed they could cut in the downturn, and now

they need to be ready to grow.

By Chris Murphy

A n a l y t i c s R e p o r t

A n a l y t i c s . I n f o r m a t i o n W e e k . c o m

J u n e 2 0$ 4

Report ID:1290610


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R e t u r n t o G r o w t h

CONT

EN

TS

3 Authors Bio

4 Executive Summary

5 Research Synopsis

6 Return To Growth

8 IT Budgets: Still Tight

12 Whats On The Agenda

17 Better Use Of Data

19 Are We Finally Aligned?

21 Appendix

7 Figure 1: Innovation Plans for 2010

8 Figure 2: IT Organization Concerns

9 Figure 3: IT Spending: 2010 vs. 2009

10 Figure 4: Revenue: 2010 vs. 2009

11 Figure 5: Staying Busy

12 Figure 6: Hiring Practices for Permanent IT Staff

13 Figure 7: Current vs. Past IT Strategy for Growth

14 Figure 8: Implementation Plans

15 Figure 9: IT vs. Corporate Culture

16 Figure 10: IT Investment Plans for 2010

18 Figure 11: Primary Opportunity for CIOs

19 Figure 12: Plans for Growth-Oriented IT Projects

21 Figure 13: Impact of the Economy on IT Spending

22 Figure 14: Global IT Worker Presence

23 Figure 15: Job Title

24 Figure 16: Company Revenue

25 Figure 17: Industry

26 Figure 18: Company Size

2 June 2010 2010 InformationWeek, Reproduction Prohibited

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Chris Murphy is editor ofInformationWeek, where he has

worked as an editor and writer since 1999. Before joining

InformationWeek, he was editor of the Budapest Business Journal, a

business weekly in Hungary, and a daily newspaper reporter in

Grand Rapids, Mich. Chris holds a BA in economics and

journalism from Michigan State University and an MBA from the University

of Virginia.


Chris Murphy

InformationWeek

Analytics




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Growth is back on the agenda of IT leaders. Theres still a great deal ofcaution, but thats the conclusion we see in our 2010 Global CIO Surveyof 333 U.S. IT leaders, either C-level or VP.

Last year, just 18% of the senior IT execs we surveyed thought introduc-ing an IT-led product or service would be a main area of IT innovation.

This year, twice as many respondents, 36%, see things that waythe sec-ond most-cited area of innovation, after making business processes moreefficient. (Last year, introducing an IT-led product or service was the No. 8CIO priority.) Cost cutting, meanwhile, has fallen32% now considerthat a top innovation priority, down from 40% last year.

Budgets reflect the trepidation most business leaders feel about this eco-nomic recovery. Half of the business technology leaders we surveyed seetheir budgets rising this year, with more than a third of them seeingincreases of 5% or more. Just under one-fourth see IT budgets decreasing.Furthermore, about two-thirds of the leaders we surveyed think their com-panies revenue will increase this year (17% say significantly), and only11% predict revenue will fall.

Asked what theyre most worried about, CIOs cite the ability to implementfast enough to meet business needs and having sufficient budget to do so.CIOs are worried about having the horses to get growth-oriented projectsdone, yet confidence in growth isnt strong enough to fuel a lot of ITorganization hiring. CIOs need to assess whether their IT teams are readyto meet a rising demand for growth-oriented IT.




E

xecutiveSumm

ary


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Survey Name: InformationWeek Analytics 2010 Global CIO SurveySurvey Date: May 2010Region: United StatesNumber of Respondents: 333

Purpose:To gain insight into the global IT strategies in use by CIOs and other

upper-level IT executives.

Methodology:InformationWeek Analytics surveyed 333 U.S.-based senior IT executives.The study was conducted online; respondents were recruited via e-mailinvitation with an embedded link to the survey. All survey respondentswork at organizations with customers, suppliers, and/or business opera-tions in multiple countries. Job titles of survey respondents include CIOs,CTOs, executive VPs, and senior VPs of IT. Respondents hail from bothSMBs and large enterprises, and work in a variety of industries.




Rese

archSyn

opsis

ABOUT US | InformationWeek Analyticsexperienced analysts arm business technology

decision-makers with real-world perspective based on a combination of qualitative and quantitative

research, business and technology assessment and planning tools, and technology adoption best

practices gleaned from experience.If youd like to contact us, write to managing director Art Wittmann at [email protected],

executive editor Lorna Garey at [email protected] and research managing editor Heather Vallis

at [email protected]. Find all of our reports at www.analytics.informationweek.com.


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RETURN TO GROWTHImagine you have just seven days to get to know your customers better. Seven days to under-

stand their needs and wants and fine-tune your product for them. After those seven days,

youve lost the chance to sell them more of what they would have loved to buy.

Thats the challenge and opportunity Royal Caribbean International CIO Bill Martin has on sev-

eral of the companys newest, tech-rich cruise ships.

Once guests are aboard certain ships, a small team on shore has begun running analytics on

passenger demographics, combining those results with real-time sales activity on the ship. For

instance, does a spa have open slots? Royal Caribbean can promote those on in-room interac-

tive TVs to only those guests most likely to take up the offer.

Martin is sending a clear message from the high seas: Opportunity for higher revenue is out

there, and IT is going to help drive it. We see growth coming back, he says, and from around

the world, not just North America.

No ones calling a blockbuster economic recovery. But we surveyed 333 top IT leaders, either

C-level or VP, and theres a marked increase in optimism compared with a year ago.

Last year, just 18% of the senior IT execs we surveyed thought introducing an IT-led productor service would be a main area of IT innovation. This year, twice as many respondents, 36%,

see things that waythe second most-cited area of innovation, after making business processes

more efficient. (Last year, introducing an IT-led product or service was the No. 8 CIO priority.)

Cost cutting, meanwhile, has fallen32% now consider that a top innovation priority, down

from 40% last year.

Are CIOs in a position to deliver growth initiatives? Thats the biggest concern CIOs in our sur-

vey havethat their organizations cant execute fast enough to meet business needs. Theyre

also concerned that they dont have enough budget and people to meet those needs. IT leaders

did their part during the cost cutting, reducing staff and consolidating IT infrastructure. Didthey leave enough muscle to respond to growth opportunities?

Theres one other risk: missing the growth opportunity entirely. Look at the survey numbers

another way and you see that most business technology leaders still arent using IT to drive rev-

enue and new products. IT tends to be most comfortable making business processes more effi-



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48%

Note: Three responses allowed

Base: 333 in May 2010 and 600 in April 2009

Data: InformationWeek Analytics Global CIO Survey of IT executives

Make business processes more efficient

Introduce new IT-led products/services for our customers

Lower IT costs/business costs

Create a new business model/revenue stream for the company

Get better business intelligence to more employees more quickly

Improve customer service

Deeper information sharing with customers, partners and suppliers

Improve Web operations/customer experience

Get better return on IT investments

Engage customers in new ways

Reduce carbon footprint and energy costs of IT environment

Pursue new global opportunities

Improve interaction with partnersand suppliers

Transform skill set of IT organization to emphasize collaboration

49%

36%

18%

32%

40%

28%18%

20%

19%

18%

21%

17%

15%

17%

20%

15%

25%

14%

20%

13%

10%

12%

16%

8%

13%

4%

10%

What are the primary ways your organization plans to innovate in 2010?

Innovation Plans for 2010

2010 2009

Figure 1


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cient, rather than driving sales and creating new products and working with customers. But

with the pressure back on companies to grow, IT needs to do its part.

IT BUDGETS: STILL TIGHT

Although its not raining money for IT projects, the budget slashing of the past 18 months has

eased. Half of the business technology leaders we surveyed see their budgets rising this year,

with more than a third of them seeing increases of 5% or more. Just under one-fourth see IT

budgets decreasing.

Furthermore, about two-thirds of the leaders we surveyed think their companies revenue willincrease this year (17% say significantly), and only 11% predict revenue will fall.


3.6

3.5

3.4

3.1

2.8

2.7

2.6

2.4

Note: Mean average ratings

Data: InformationWeek Analytics 2010 Global CIO Survey of 333 IT executives, May 2010

Cant implement fast enough to meet business goals

IT budgets are insufficient to meet goals

Dont have enough IT people

Dont have the right IT skills

Dont have enough IT infrastructure capacity

Dont have system to prioritize projects

Dont have good business unit relationships

Dont have the right outsourcing relationships

How great a concern are each of the following factors as they relate to your IT organizations ability tosupport business goals? Please use a scale of 1 to 5,where 1 isnot a concernand 5 is major concern.

IT Organization Concerns

1 Not a concern Major concern 5

Figure 2


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The tension between spending to drive growth and spending to keep the lights on remains a

top concern for IT leaders. Asked about the primary areas they spend their time, one-third of

survey respondents cite this problem of reducing spending on ongoing operations so they can

spend more on new initiatives.

After a year of skimping on spending, often stretching the life cycle of their PCs and servers,

some IT leaders do worry about keeping the lights on. The business is asking for growth rev-

enue goals that are a real stretch, says one IT leader, who wanted to stay anonymous. IT

budgets are advertised as increasing and as budgeted for investment, without sufficient monies

being placed on keeping the foundations stable.

At Appleton Paper, an almost $900 million-a-year specialty paper maker, that tension between

growth and maintenance drove the decision this year to outsource application support offshore.

Ive freed up my people to spend more time on growth projects, says Dave Satish, head of the

companys IT. Satish also is putting a big emphasis on speed at the company. Instead of taking



Using your best estimate, how will your organizations IT spending this year compare with 2009?

IT Spending: 2010 vs. 2009

Up5%to10%

Up more than 10% 21%

15%

9%

6%Down more than 10%

Down5% to10%

Down less than 5%

Upless than5%

Flat

14%

8%

27%

Figure 3


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weeks of back-and-forth meetings and approvals to spec out a major project, the team uses a

kaizen approach where everyone with a stake in the project focuses entirely on the require-

ments for several days, and defines 90% of the requirements in a week, Satish says.

Confidence in growth isnt strong enough to fuel a lot of IT organization hiring, even though

CIOs are worried about having the horses to get projects done.

One-third say hirings still frozen, though only 4% say theyre more likely to lay off than hire.

About a third say theyre looking to hire, but only for very specialized skills. Just 11% of the

CIOs we surveyed are looking to hire across many areas.

Theres no stampede to outsourcing, either. Among the business technology leaders we sur-

veyed, 57% say theyre holding steady on outsourcing, 23% say theyre scaling it back, and

20% say theyre investing in it. Among companies expecting revenue growth, just 38% say

theyll use more IT contractors compared with past growth periods, rather than hire.



Using your best estimate, how will your organizations revenue this year compare with 2009?

Revenue:2010 vs. 2009

Upmoderately

Downsignificantly17%

Up significantly

Downmoderately

Flat

3%

8%

21%

51%

Figure 4


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42%

Note: Three responses allowed



Driving global technology and process standards

Spending time with my CEO/senior executives,focusing on a strategic agenda in these meetings

Measuring IT processes,output,performance

Driving initiative to reduce spending on operations and maintenance in favor of spending for new initiatives

Educating myself about the next wave of technologies (e.g.,social media,programmable Web, wireless broadband)

Managing and planning global IT budget and procurement

Negotiating with vendors and service providers

Driving global business or sourcing opportunities, global supply chains or trading networks

Meeting with external customers

Developing key potential successors and team members

Spending time with my CFO discussing long- and short-term financial issues

Recruiting IT talent

27%

37%

31%

35%

41%

34%

35%

28%

34%

20%

28%

19%

25%

14%

11%

14%

21%

13%

14%

8%

9%

8%

6%

What are the primary areas on which you spend your time?Staying Busy

2010 2009

Figure 5


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Bottom line, business technology leaders seem content to squeeze the teams they have to meet

growing IT demands.

WHATS ON THE AGENDA

Facilitating collaboration, improving information security, and upgrading desktops are the

most-cited major implementations planned this year. Forty percent of the business technology

leaders we surveyed have a major collaboration project scoped out for this year.

One example is mutual fund company Vanguard, which in the past few weeks began letting

employees access work e-mail from their personal iPhones and Android-based phones, usingGood Technology for encryption and smart token authentication. Vanguard is also trying to

make company-issued BlackBerrys more useful. The companys strategy had been to lock down

every feature that wasnt expressly needed for work. That led to some awkward conversations

for IT, like when a top Vanguard exec in the U.K., lost in a city in Ireland, called an IT princi-



What is your organizations current approach to hiring permanent IT staff?

Hiring Practices for Permanent IT Staff

Actively looking to staff up,but only for very specializedtech or business skills

Other

34%

Actively looking to staffup across many areas

More likely to lay off than hire

Hiring is frozen

2%

4%

11%

33%16%

Looking to hire outsourcers andcontractors before full-time staff

Figure 6


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pal who leads the companys collaboration efforts to complain about not having GPS on his

BlackBerry. Now employees get more of those non-work tools, including GPS and a camera,

though every feature goes through a compliance and security screen.

Collaboration efforts like these provide only indirect support for growth, by making employees

more productive. But Vanguard looks for a more direct link, treating employees as a proving

ground for technology it plans to bring to customers.

For instance, Vanguard is experimenting with an internal SharePoint site for IT projects that

potentially could be extended to clients, says Abha Kumar, an IT principal who leads the com-

panys Web 2.0 efforts. Vanguard investment advisers and clients could potentially collaborateon a similar site, or clients could interact with one another therefor example, people who are

newly retired or close to sending kids to college could gather to discuss investment issues. By

using the SharePoint site internally first, Vanguard gets the bugs out and identifies which fea-


38%

35%

31%

29%

18%

2%

22%

Note: Multiple responses allowed

Base: 228 respondents predicting their organizations revenue will increase in 2010


Use more contract IT talent, rather than hire

Centralize IT resources as we expand

Use more software as a service

Use more on-demand infrastructure (cloud-based CPUs,storage, etc.)

Hire full-time staff more quickly

Other

No change in IT strategy compared with past growth periods

How does your IT strategy for business/revenue growth differ from past growth periods?

Current Vs.Past IT Strategy for Growth

Figure 7


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Increasing server virtualization

Improving information security

Implementing ERP

Implementing CRM

Providing videoconferencing

Improving systems for regulatory compliance

Expanding business intelligence

Re-architecting data centers

Improving collaboration among employees

Providing unified communications

Upgrading desktops (hardware and/or software)

Consolidating/reducing applications

Using more software as a service

Getting applications on mobile devices

What are your organizations plans for the following technologies and initiatives?

Implementation Plans

Major implementationin place

Major implementationplanned this year

Major implementationplanned in next 24 months

No plans

13%43%

16%38%

13%36%

30%

34%

10%

14%

12%

41%

26%36%

31%31%

19%

19%

19%

19%

26%30%

19%27%

26%

26%

18%

28%

32%25%

17%24%

23%

40%

20%

19%

27%23% 22% 28%

18%23%

26%19%

34%

31%

25%

24%

33%17%

33%15%

25%

26%

25%

26%

Figure 8


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tures are most useful. Then we have real experience as we expand outside, Kumar says. We

get to play around with the technology and actually start to see how it impacts what we do.

Another big innovation priority for CIOs in our survey is the mobile Internet. Although just

15% of survey respondents say they have a major application on mobile devices today, more

than a fourth of them plan to do a major implementation this year. And for companies like

spice maker McCormick, such apps are changing ITs role.

Remember how 36% of the business technology leaders we surveyed say they expect IT to

drive products and services this year? Jerry Wolfe, CIO of McCormick, says that a couple of

years ago he would have struggled with whether IT had that kind of role in new products.Now, theres no doubt. Hes working with the companys sales and marketing teams to have a

different set of discussions with our retail partners, as they both figure out how to build closer

ties with customers using the Web, particularly the mobile Web.



How would you compare the culture of your IT organization with your companys corporate culture?

IT Vs.Corporate Culture

Consistent:Both are generallyaggressive in strategy and executionInconsistent:Other company

departments are moreaggressive than IT

32%

Inconsistent:IT department ismore aggressive than the

rest of the company

12%

21%

35%Consistent:Both are generallyconservative in strategy and execution

Figure 9


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McCormick has an iPhone recipe app, for example, and Wolfe, whos also head of supply chain

operations, thinks that app could be co-branded with a retailer. Its working with one retailer to

tie McCormicks recipe-driven Web site in with the retailers campaign for the summer grilling

season. McCormick offers a virtual recipe box download to bring together all a consumers

recipes.

Wolfe offers a key takeaway: This mobile revolution, and the importance of forming more-

interactive relationships with customers, is happening worldwide, even if the execution might

be fine-tuned locally. Says Wolfe, These ideas are not only growth strategies. Theyre global

strategies.

At Ford Motor, the mobile Internet has a different meaning. Its about giving drivers relevant

Internet services and social networking, safely, in their vehicles. To experiment, Ford let a

group of University of Michigan students, as part of their coursework, develop social network-

ing applications for the Sync in-vehicle personal tech system in the new Fiesta compact car.

The applications arent in production, but one example is an app that lets people traveling in a

multivehicle caravan share information about their location and stops, helping everyone stay

together on a road trip. Ford also partners with Google so that Google Maps users can click a

send to Sync button to send directions to their vehicle, and its partnering with other content



New application development (i.e., new software projects)

Infrastructure upgrades (i.e.,hardware investment,such as servers,PCs,etc.)

End-user technology (e.g.,Web 2.0-related projects)

New outsourcing engagements

What is your organizations approach this year to the followinggeneral types of IT projects or investments?

IT Investment Plans for 2010

Investing Holding s teady Sc aling back

12%49%

9%46%

13%28%

39%

45%

59%

23%20% 57%

Figure 10


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providers to extend Sync beyond media players and phones, CIO Nick Smither says.

Ford also is letting employees use their personal BlackBerry to access work e-mail, and its test-

ing personal iPhone use. Smither believes employees increasingly will expect that kind of

mobility. Its part of a larger Ford initiative called Digital Worker, which includes use of video-

conferencing and the social media capabilities of SharePoint to let people around the world col-

laborate more easily. With a diverse employee base split across time zones and geographies,

Smither says, the whole social media is a huge opportunity.

BETTER USE OF DATACollaboration and mobility are at the center of innovation for IT teams, but we also asked CIOs

what their single biggest opportunity is personally. The No. 1 answer: Use data to influence

new products and drive growth, cited by 29%.

Martin at Royal Caribbean is just getting started with such an effort. Not all the data the cruise

line collects has to be analyzed to be valuable. Some of it just needs to be shared, like how

many people are standing in line for a restaurant.

Royal Caribbeans Oasis of the Seas is the biggest cruise ship ever launched, and one of the

companys guiding principles is zero tolerance for lines, Martin says. So at each of the 24restaurants on the ship, shape-recognition cameras count the number of people waiting to get

in and broadcast that information as red-yellow-green signals to 300 digital signs around the

ship, so that people can select the least-crowded venues.

Royal Caribbean ships collect more data than ever during a cruise, over a converged, 10-Gbps

IP network that connects every cash register and booking system, so analysts know whats hap-

pening in real time. And with interactive TV in each guest room, Royal Caribbean can deliver

customized messages. Were still learning how best to use that, Martin says.

The cruise line is also trying to get to know guests better before they board, via new Web site

features that let them plan and book activities ahead of time. And its putting more technology

in front of passengers while on the ship. Guests on Oasis of the Seas, for example, can outfit

their children with a wristband that sends a signal to one of 900 wireless access points on the

ship. The wristband is connected to an iPhone app that shows parents where their little

stinkers are playing by displaying a blip on a diagram of the ship.



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To look for data-driven revenue opportunities more actively, Martin created what he calls a

business information group of half a dozen people. Rather than implement IT projects or

support IT operations, group members look at the data various operating units generate and

help them figure out what else those units need to make better decisions. Weve had the tools.

Weve never leveraged them as well as we do with this, says Martin, whose team makes use of

Oracles OBIEE analytics and dashboard software.

ARE WE FINALLY ALIGNED?

Its also interesting to note what isnt a big worry for business technology leaders. Far down the

list of concerns for survey respondents is having the right business unit relationships and hav-ing a system to prioritize IT projectsthe age-old business-IT alignment issues.

Other survey results, however, raise questions about whether IT organizations are focused on



How would you characterize your organizations IT plans this year,in terms of projects intended to drive or support revenue growth?

Plans for Growth-Oriented IT Projects

Steady state;the same numberof growth-oriented projectscompared with a year ago

38%

Investing;rising number

of growth-oriented projectscompared with a year ago

8%50%

4%

Frozen;virtually no growth-orientedprojects in the works

Contracting;declining numberof growth-oriented projects

compared with a year ago

Figure 12


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the right mission. Among companies that expect revenue to grow this year, only half of them

are increasing the number of growth-oriented IT projects they have going compared with a

year ago. Thirty-eight percent say theyre holding the number of projects steady, while 12% are

either cutting them back or have no such projects in the works.

That 50-50 split is puzzling. Is IT not an integral part of those companies growth agendas? Are

they too internally focused, running an ever-more efficient IT operation while not looped into

customer and revenue opportunities? Are they not up to the job, or perhaps considered too

slow or overworked to be trusted by business partners with vital, growth-oriented initiatives?

Business technology leaders need to do a gut check about their teams capabilities and howthey tie into their companies goals. Given the chance, are we really ready for growth?



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R e t u r n t o G r o w t hA n a l y t i c s . In for ma t i on W e e k .c om


Appe

ndix


In response to concerns about the economy,is your organization being asked to ratchet backspending on IT this year, either as a portion of the overall budget or on a project-by-project basis?

Impact of the Economy on IT Spending

Yes,were being askedto cut specific projects

Yes,were being asked to cut a

percentage of our IT budget

16%

No,concerns about theeconomy havent affected our

IT budget or spending plans

29%

25%

30% Yes,were being askednot to increase spending onIT as much as we had planned

Figure 13


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Appe

ndix

36%



None

1%to9%

10% to24%

25% to49%

50% to74%

75% to99%

100%

40%

17%

19%

26%

20%

12%

11%

7%

7%

2%

2%

0%

1%

What percentage of your IT workers are outside of the country?

Global IT Worker Presence

2010 2009

Figure 14


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Appe

ndix

40%

20%

13%

6%

4%

3%

3%

2%


CIO

VP of IS/IT

CTO

Senior VP of IS/IT

Chief technical architect

Business analyst/process (VP/Sr.VP/EVP)

ExecutiveVP of IS/IT

CSO/CSIO

Other IT VP

Line-of-business technology executive ( VP/Sr.VP/EVP)

Other IT executive

Services (VP/Sr.VP/EVP)

Engineering/systems development (VP/Sr.VP/EVP)

Networking/telecommunications (VP/Sr.VP/EVP)

2%

2%

2%

1%

1%

1%

Which of the following best describes your job title?

JobTitle

Figure 15


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Appe

ndix


Which of the following dollar ranges includes the annual revenue of your entire organization?

Company Revenue

$50million to$99.9 million

Dont know/decline to say

8%Less than$6million

$6million to $49.9million

$5 billion ormore

Government/non-profit

$100million to $499.9million

$1 billion to $4.9 billion

$500million to$999.9million

9%

15%

14%

9%

5%

2%

23%15%

Figure 16


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Appe

ndix

17%

2%

10%

3%

2%

2%

2%

2%


Banking

Construction/engineering

Consulting and business services

Consumer goods

Distributor

Education

Electronics

Energy

Financial services, insurance

Financial services, other

Government

Healthcare/medical

Insurance/HMOs

IT vendors

Manufacturing/industrial, non-computer

Media/entertainment

Non-profit

Retail/e-commerce

Securities and investments

Telecommunications/ISPs

Other

3%

3%

6%

3%

2%

5%

9%

4%

3%

3%

5%

2%

12%

What is your organizations primary industry?

Industry

Figure 17


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Appe

ndix


Approximately how many employees are in your organization?

Company Size

Less than 50

10,000 or more11%

5,000-9,999

1,000-4,999

50-99

100-499

500-999

29%

7%

19%

5%

20%

9%

Figure 18

Research 2010 Global Cio Report 2412787

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