As the cloud and new digital technologies allow organisations to become more agile and responsive, Gerald Fox, managing partner of KPMG Crimsonwing, considers the opportunities. We also find out how the role of the CIO has radically changed and share key findings from the recent KPMG/Harvey Nash research – the world’s largest annual survey of CIOs.
Cloud-based solutions, digitisation and app-based approaches are all revolutionising the IT landscape – putting power back into the hands of the business. Using the cloud gives organisations unprecedented opportunities to focus on shaping the business first, then creating an IT solution to fit. Cloud-based products and Software as a Service (SaaS) mean solutions can be implemented that are already built around the needs of a business. The technology can be moulded to fit, so that organisations are in control of how technology works for them.
The traditional model where the business places requests into an IT department to make changes to core systems and then potentially waiting months for a solution to be delivered – often at high cost – are changing. This transactional arms-length relationship will be replaced with a new, more dynamic set of possibilities. Vendors are increasingly moving their focus to the cloud. New models such as Software as a service (SaaS), can provide you with not just a solution but a service too – managing release cycles and upgrades, if you require it. Alternatively you can still manage it internally or through an outsource provider – you’ve got options now. It’s not only about the cloud though. Many businesses are developing their own app stores, where apps can be downloaded in a new kind of self-service culture. Greater digitisation also means far greater accessibility to data – the focus then shifts to making the best use of that information to drive business performance and improvement.
Every organisation needs to go at its own pace. For cloud, back office functions such as Finance, HR or Sales are the usual starting points as they can be more easily isolated from the rest of the business. The closer you move to the heart of the business, the harder it gets. For larger and very complex businesses especially, there is likely to be a complex existing IT estate into which significant investment has been sunk. That’s obviously not going to be moved wholesale. But what we are seeing amongst the corporate heavyweights is greater experimentation: taking one area or offshoot of the business and looking at cloud-based or digital solutions. We’re going to see hybrid approaches. Whatever your business, you need to look at how you would migrate and transition to take advantage of new technologies. It’s about creating a roadmap of what the future looks like for you and what balance you will strike between cloud and on premise infrastructure.
Looking forward, I expect businesses to increasingly focus on digitisation as a way of unlocking information that gives competitive advantage. They’ll also focus on mobility – allowing customers and staff to access information from any device quickly and easily. The new emphasis on technology means the role of the CIO is changing too. I think that we will increasingly see one or more of CIOs, CTOs (technology), CDOs (data), CSOs (security) on the executive board. That is only right, because IT and management need to be working more closely together than ever. They have to be in tune with each other – what the business strategy is and how technology enables the strategy. IT and the business can now move much more in lockstep. Instead of periodic major step-changes which take years to implement, cost millions and can already be sub-optimal by the time they are operational, the new world will be about a continuous interplay between IT and the business. Tech-enabled continuous transformation is becoming a reality not just a concept.
Digital has firmly found a place on the board agenda
This year’s survey reveals the emergence of the ‘Creative CIO’ – a transformational business leader, technology strategist and business model innovator. Some of the key findings include:
Digital has firmly found a place on the Board and C-Suite agendas
58 percent of respondents reported that their organisation has a clear digital vision and strategy, with Board or C-Suite executives owning 36 percent of these strategies. Increasingly organisations are expecting their CIO to lead the delivery of the digital strategy.
CIOs are struggling to free up funding to drive innovation
Only 31 percent of respondents have a formal process to allocate resources to drive technology-enabled innovation across IT and the business.
Cloud is no longer a choice
IT is not the sole purchaser of cloud solutions and 59 percent of large organisations plan to make a ‘significant’ investment across Infrastructure, Platform and Software as a Service in the next one to three years.
Less than a quarter of CIOs feel ‘Very well positioned’ to deal with IT security/ cyber-attacks
In addition, only 40 percent of respondents cited ‘Insiders’ as a significant concern, however an increasingly higher proportions of cyber incidents are originating from within the organisation.
CIOs must look to increase the depth of their relationships outside of their traditional ‘comfort zones’ of Finance and Operations
Only one third of CIOs reported having ‘very strong’ relationships with HR, Sales and Marketing. This can lead to a fragmented approach when implementing a digital strategy.
Big Data continues to be a priority
But there is a clear skills gap with 39 percent of respondents suffering from a lack of skills in this area.