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TEKsystems Research Details Fundamental Shifts in CIO Role
[January 23, 2018]

TEKsystems Research Details Fundamental Shifts in CIO Role


TEKsystems (News - Alert)®, a leading provider of IT staffing solutions and IT services, today detailed findings that indicate a fundamental shift impacting current roles and expectations of IT departments, which in turn are creating changes to the leadership responsibilities of CIOs. Gathered in conjunction with its 2018 IT Forecast, data indicates CIOs will need to adopt a dual role with an increasing shift toward becoming a "partner-liaison" for tech initiatives outside core IT's traditional domain. Trends indicate new initiatives still owned by core IT are being increasingly outsourced, accompanied by an upswing in tech initiatives being directed by other internal lines-of-business. The end result is that IT leaders are indicating their roles are evolving, with internal IT department personnel increasingly being leveraged for maintaining existing systems, and strategic new initiatives laying outside the purview of centralized IT. Additionally, while an increasing percentage of CIOs hope to occupy a transformational role within organizations in the next two years, in reality, the opportunity may lay outside traditional responsibilities.

Results are based on a survey which polled more than 1,000 IT leaders (e.g., chief information officers, IT vice presidents, IT directors, IT hiring managers) in October 2017 on a range of key issues, including IT staffing and budgets, skill needs and expected organizational challenges in 2018.

Key highlights include:

IT Leaders Declining in Criticality While Project Managers Holding Steady



 
Ranking and percentage of respondents indicating "Executive (C-suite) leaders" are the absolute most critical for enabling the organization to achieve success in the coming year
Year   Rank   Percentage
2016   10   12%
2017   13   10%
2018   13   6%

 
Ranking and percentage of respondents indicating "VP and director-level leaders" are the absolute most critical for enabling the organization to achieve success in the coming year
Year   Rank   Percentage
2016   10   19%
2017   10   17%
2018   11   10%
 
Ranking and percentage of respondents indicating "IT managers" are the absolute most critical for enabling the organization to achieve success in the coming year
Year   Rank   Percentage
2016   2   34%
2017   5   24%
2018   9   15%
 
Ranking and percentage of respondents indicating "project managers" are the absolute most critical for enabling the organization to achieve success in the coming year
Year   Rank   Percentage
2016   3   30%
2017   2   32%
2018   2   32%

TEKsystems ' Take: TEKsystems notes that prior to 2016, CIOs, VPs of IT and IT managers were considered by a relatively higher number of respondents as most critical for organizational success. However, beginning in 2016, their perceived importance began to diminish. Although these high-level IT roles are still important, TEKsystems believes that a key transitional aspect of the CIO is to become the main strategic liaison in the management of an ecosystem that includes business partners and outside vendors involved in new initiatives outside of centralized IT, while also serving as a consultant to internal lines-of-business running their own IT efforts. As their internally-focused role within their own IT departments becomes increasingly tactical, unless IT leaders start to showcase strategic value as consultative partners, their positions within organizations could be marginalized, or perhaps disintermediated.

IT Leaders View Their Roles as Becoming Increasingly Transformational

 
Q: What is the role of your IT organization in the business today and where do you see it in the next 12-24 months - Functional/enabling*, Engaging**, Transforming***?
   

Today

 

Expected in the next 12-24 months

Functional/enabling   16%   10%
Engaging   51%   49%
Transforming   34%   41%

*Functional/enabling (focused on efficiency, oversight of IT investments/spending and delivering operational support)

**Engaging (uses business' strategy to formulate IT vision and strategy; proactively focused on improving business processes and operations)

***Transforming (dedicated to driving innovation and helping the organization gain a competitive edge)

 

TEKsystems' Take: Contrary to data that indicates IT leaders becoming less critical to organizational success, the number of CIOs and executive IT leaders indicating their roles will become responsible for more transformational activities during the next 12-24 months is increasing. Against a backdrop where many cutting edge technologies-such as big data AI, automation, and IoT-are being implemented outside of core IT (i.e. marketing, sales), as well as core IT being increasingly outsourced (DevOps, Cloud), efforts will require leadership and consultancy outside of centralized IT.

Centralized IT Support of New Initiatives Now Commensurate Efficiency and "Lights-On" Efforts

 
Business objectives that IT will most need to support:
Business Objective   2016   2017   2018
Improving efficiency   31% (Rank #5)   29% (Rank #4)   35% (Rank #1)
Implementing NEW IT applications and infrastructure   45% (Rank #1)   40% (Rank #2)   33% (Rank #2)
Improving EXISTING IT applications and infrastructure   43% (Rank #2)   47% (Rank #1)   31% (Rank #3)

TEKsystems ' Take: When asked about the business initiatives IT will most need to support in the coming year, improving efficiency has leaped to the top spot while trends indicate declining emphasis on implementing new IT applications, highlighting an increase in "maintenance mode" for centralized IT. Overall, IT departments will be expected to place essentially equal emphasis on all three areas: efficiency, new applications and existing applications. TEKsystems believes this is due to the continued decentralization of IT and the increasing assumption that other business functions are responsible for driving their own IT innovation. This is further evidence that in 2018, senior IT management, especially at the C-level, must adapt to changing demands that straddle both traditional IT responsibilities and new responsibilities external to centralized IT if they seek to maintain strategic, leadership positions.

Spending Trends Bolster Movement Towards Decentralization

 
APPROACHES TOWARDS DECENTRALIZATION
Q: How do you expect spending to change next year for the following?
Managed, project-based or statement-of-work services   2016   2017   2018
Increase   31%   43%   47%
Stay the same   61%   52%   43%
Decrease   8%   5%   10%
Outsourcing   2016   2017   2018
Increase   37%   29%   35%
Stay the same   53%   57%   50%
Decrease   10%   14%   15%

TEKsystems ' Take: Organizations seem to be taking a balanced approach on spending, with budget growth toward externally oriented approaches now equal to internally oriented approaches. In reviewing the traditional methods that many organizations look to leverage in addressing skills or project needs, historically they started with internally-focused efforts such as training or augmenting staff. Conversely, if organizations choose to outsource, they generally shift to project-based / statement-of-work activities or outsourcing entire initiatives. The data over the last three years shows that internally-focused efforts have remained mostly the same, while external facing approaches have continued to see an uptick.

"While few disagree that the IT department is changing, there hasn't been a lot of insight into the specific impact of that change," said TEKsystems Research Manager Jason Hayman. "One way to illustrate this is to consider the changing role of the CIO. Data shows that IT leaders view themselves as becoming more transformational over the next two years, but data also indicates that the traditional purview of IT will not provide that opportunity. As centralized IT will be expected to contribute less in the way of innovation and more in the way of support and efficiency, strategic CIOs will change from managing all of IT to additionally acting as a strategic line-of-business partner. Another driver for that transition is the application of the IT outsourcing model to areas of the business outside core IT. As different strategic projects are led by varying groups and departments, there will be a need for a technology liaison who can bridge the gap between traditional IT, business leaders, outsourced IT pros and newer LOB players who will have authority in selecting technology that gives their group a strategic advantage. CIOs who will thrive are those who demonstrate relevance and work to elevate their departments and keep pushing their capabilities as transformative partners, while less developed or unprepared CIOs will see the IT department's role relegated to a static one and may even see key responsibilities go to newer roles in the organization, such as the addition of a chief innovation officer. Innovation within the organization and the delivery of strategic solutions will continue; how much the CIO is a part of that will be up to them."

TEKsystems' Jason Hayman is available for additional commentary. For more information about the survey, or to schedule an interview, please contact Nathan Bowen at nabowen@TEKsystems.com.

About TEKsystems®

People are at the heart of every successful business initiative. At TEKsystems, an Allegis Group company, we understand people. Every year we deploy more than 80,000 IT professionals at 6,000 client sites across North America, Europe and Asia. Our deep insights into IT human capital management enable us to help our clients achieve their business goals-while optimizing their IT workforce strategies. We provide IT staffing solutions, IT talent management expertise and IT services to help our clients plan, build and run their critical business initiatives. Through our range of quality-focused delivery models, we meet our clients where they are, and take them where they want to go, the way they want to get there.

TEKsystems. Our people make IT possible.


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