Harvey Nash Report Outlines Advantages of Hiring CDOs, Outsourcing Trends and Importance of the Customer

In my last two blogs that reviewed the release of the 2018 Harvey Nash CIO survey I reflected on how amazing it is to think how far technology has advanced in the last two decades.

As the survey says: “As technology has changed, so too has its focus: once it was all about internal operations, now it's more about the customer; once the budget was controlled by one or two executives, now spend is undertaken by a broader range of stakeholders.”

The survey also reveals that the successful CIOs will favour customer/revenue growth over inward-facing activities.

In this concluding blog I want to focus on the importance of the customer.

According to Harvey Nash, 32% of organisations now have an enterprise-wide digital strategy.

It would appear that most digital investment is focused on "front-end," rather than deeper operational activities.

Most interestingly from a Fifth Step perspective is the finding that organisations with a CDO are more than twice as likely to have a clear and pervasive digital strategy than those without one (44% versus 21%).

That statistic certainly chimes with our experience of working with CDOs whether they are the flexible, experienced professionals we source for organisations or full time employees.

But as the authors acknowledge: “ultimately this report shows that the most influential and successful organisations are fanatical about delivering value both to and from their customers. And it shows in the figures - 'Customer centric' organisations are 38 per cent more likely to report greater profitability than those that are not.”

At the same time, CIOs are getting smarter at how they manage their resources. Outsourcing is increasingly being used as a skills enhancer rather than cost saver.

Meanwhile, the report says that: “Protecting the business from a cyber attack has jumped further up the boardroom agenda than any other item and IT leaders are being supported and encouraged to make their defences the best that they can be. CIOs are increasingly worried about defending themselves against organised cyber crime.”

Several CIOs are quoted in the report and their views are quite instructive.

Take the view of Kevin Robins, EVP & CIO, Sage UK, for example. He says:

“Just as Boards have become more technically aware, the onus is on IT to become more business aware. IT needs to partner with the business and move up the value chain from being a service.”

Markus Sontheimer, CIO, Deutsche Bahn Schenker, Germany adds:

“There is no distinct technology function any more. Keeping control of the enterprise architecture is key-we must bring technology to parts of the organisation. The boundaries between the departments are becoming increasingly blurred. Today, it is imperative to work in integrated teams with people from all units to focus on specific topics or technical components.”

Lastly, Claudlne Ogilvie, CIO, Jetstar Airways, Australia, says:

“The technology lifecycle is not just becoming shorter but it has become a continuously evolving part of the fabric of our business There is an industry wide shift towards Agile Operating models and ways of working, designed to make technology and the business one and the same. Multi-year IT projects that also take years to deliver any value are dead.”

To conclude the final blog on this subject, it was also interesting to note that the use of flexible or contingent labour is directly proportional to the size of IT leaders' budgets.

It is reported that eighteen per cent of large organisations with budgets over $250m are using more than 50 per cent flexible labour within their IT departments compared to only 11 per cent of their peers with budgets under $50m.

I was not surprised to read that IT leaders from larger organisations are also more likely to be outsourcing or offshoring, with 87 per cent of organisations with IT budgets over $250m stating they do so in comparison with only 58 per cent of their peers who have a budget of less than $50m.

According to Harvey Nash: “The primary reason for IT leaders to outsource or offshore is to bridge the skills gap, with 46 per cent of IT leaders citing this as their primary reason, and saving money - a key reason to outsource in the past - came a distant second with just over a third (36 per cent) of respondents.”

I do hope you have this mini series of blog on the Harvey Nash CIO Survey to be a useful summary of the complete reports findings. If you would like to read the report in its entirety, please feel free to contact me Darren.wray@fifthstep.com and I will gladly forward you a copy.