I had the pleasure recently to attend a briefing by CxO media (publishers of CIO magazine). They had completed their annual CIO survey looking into the world of the CIO with the objective of understanding how the role of the CIO continues to evolve in today’s business climate and to help define the CIO agenda for 2009. They had over 500 CIOs from North American headquartered midsize and enterprise companies participate.
There were a few very interesting trends that jumped out at me which I wanted to share:
1. CIOs are concerned about the volume of data coming down at them over the next 5 years.
The presentation had a slide (number 4 if memory serves me right) that had just three words on it – “All that Data”. Of course I was interested to understand what that meant – and was told simply that CIOs are drowning in data and are concerned (I think the exact word used was “frightened”) about the vast volume of data that is going to engulf them in the next few years. Suddenly I was thinking of tsunamis and how we can help them with their data! It struck me in the words being used that there is a continued focus on data and how to help businesses unlock the true value of data that is fragmented across operational and analytical systems in enterprises – and even more profoundly beyond the enterprise into cloud computing.
2. Budgets are shrinking
So no surprises here – they polled their CIO audience over the course of the last 6 months and found that an increasing number were seeing budget reductions – in January 2009 they stated 53% of CIOs were dealing with budget reductions (compared with 17% in March of 2008). However, the surprising thing to me was the implications of the budget reductions. 48% of CIOs stated that budgets for new projects would decrease. However, IT compensation costs and network infrastructure costs were trending up.
If I were a CEO, I’d be worried. This suggests to me that the focus of IT is on maintaining the “keep-the-lights-on” (KTLO) components, and that any budget cuts have to come from the one area of IT that focuses on growth – namely new business alignment.
This is wrong. It has to be – IT organizations have to work out how to lower their KTLO and drive more budget into new projects. If they don’t then the company is doomed.
One way to do this, I believe, is through automating the data integration processes within companies. Far too much effort and manpower is spent on changing, testing and deploying the interfaces between applications. By automating these interfaces a significant proportion of budget can be diverted to building new applications and helping IT to align with the business. Which brings me nicely onto my third point about the research. Another way is to retire applications that are no longer being used. Get the data out into a secure archive and decommission those applications (one telco provider recently discussed with us the opportunity of retiring several hundred applications – bet that’ll free up some budget next year!).
3. Mis-alignment between IT and the business
The researchers did a clever job on this. They asked the CIO audience a number of questions about priorities. They then asked Forrester research to ask the same questions of business leaders. Quel surprise – the answers were diametrically opposed – ouch!
The number one priority for business leaders was to “Acquire and retain customers”. This was apparently 8th on the list for CIOs. The number one priority for CIOs was to improve the end-use workforce productivity.
This disappointed me because we’ve spent a lot of time over the last 20 years talking about business-IT collaboration. We believe at Informatica that it is critical to drive alignment here. Our goal is to have the business and IT working together to close the value gap of their data and to have the business take ownership for the quality and effectiveness of data across their enterprise. This isn’t an IT responsibility, but through a comprehensive and unified data integration platform IT can enable the business to be in control.
It was an interesting survey with some disappointing results. CIOs must focus on reducing that KTLO and aligning with the business! A data integration platform can help.