Almost two-thirds (63%) of organizations now allow technology to be managed outside the IT department, a shift that brings with it both significant business advantages and increased privacy and security risks, according to the 2019 Harvey Nash/KPMG CIO Survey.
The report explains: "The proliferation of easy-to-use, and easy-to-establish, cloud-based services has taken the running of an IT system within easy reach of any technology-savvy business leader (or indeed unsavvy one). Business leaders have become increasingly prescriptive about what they want their technology to do. Perhaps frustrated by what they perceive as an unresponsive IT team, they have taken matters into their own hands."
"Younger, perhaps more digitally native, organizations are almost twice as likely to encourage business-managed IT as the global average," the report continues. "For many organizations there has been a radical rethink in their approach, increasingly seeing it as a useful tool for empowering the business, removing bureaucracy and getting closer to the customer."
The report says almost two-thirds of organizations (64 percent) allow business-led IT, and approximately one in ten actively encourage it.
According to the survey, for organizations that actively encourage business-managed IT, business advantages include improving time to market new products (52% more likely to be "significantly better than their competitors") and employee experience (38% more likely to be "significantly better than their competitors").
However, 4 in 10 (43%) companies are not formally involving IT in those business-led IT decisions. These organizations are twice as likely to have multiple security areas exposed than those who consult IT, 23% less likely to be "very or extremely effective" at building customer trust with technology, and 9% more likely to have been targeted by a major cyber-attack in the last two years. These risks are uncovered at a time when cyber security reaches an all-time high as a board priority (56% vs. 49% last year).
The huge opportunities to capitalize on the value of business-led IT, but also manage its risks, come at a time of significant change for the business, the CIO, and the IT department, as the survey reveals:
■ Fewer CIOs sit on the board– although the influence of the CIO remains intact (66% this year view the role as gaining influence compared to 65% in 2018), fewer CIOs now sit on the board – dropping from 71% to 58% in just two years.
■ Artificial Intelligence (AI) and automation are driving huge change– as the IT department is being tasked by its board to use AI/automation to improve efficiencies (up 17% this year as a board priority), this is leading CIOs to expect that up to 1 in 5 jobs will be replaced by AI/automation within 5 years. However, 69% of CIOs believe that new jobs will compensate for job losses to AI/automation.
■ Skills shortages– technology leaders are struggling to find the right talent with skills shortages at their highest level since 2008. The three most-scarce skills are big data/analytics (44%), cybersecurity (39%) and AI (39%).
"Today's CIO is more collaborative and aligned with the rest of the business than ever before," said Anna Frazzetto, Chief Digital Technology Officer & President, Technology Solutions, Harvey Nash Inc. "IT budgets are increasing, companies are getting more creative and they're investing in innovation. With digital now a part of every piece of the business, the CIO is the key influencer at driving the direction of the IT roadmap."
Steve Bates, Global Leader, CIO Advisory Center of Excellence, KPMG International, added, "There is no longer business strategy and technology strategy, it's simply strategy with technology driving it. This research clearly shows that organizations putting technology in the hands of value-creators and connecting the front, middle and back office are winning in the market. The future of IT is a customer obsessed, well governed, connected enterprise."
Another interesting point made by the report, digital leaders — which are organizations that consider themselves "very effective" or "extremely effective" at using digital technologies to advance their business strategies — performed better than their competitors on every aspect surveyed:
■ These aspects included time to market (53% vs 34% for the rest), customer experience (65% vs 49%), revenue growth (55% vs 43%) and profitability in the last year (50% vs 37%).
■ Digital leaders are also more likely to introduce major new changes to products and services in the next three years (55% vs 39% for the rest), and focus on making money - 76% of CEOs in digital leader organizations want their technology projects to "make" rather than "save money," compared to 58% for the rest.
About the Survey: In its 21st year, the 2019 Harvey Nash/KPMG CIO Survey is the largest IT leadership survey in the world in terms of number of respondents. The survey of 3,645 CIOs and technology leaders was conducted between December 13, 2018 and April 4, 2019, across 108 countries.
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