To discover upsides from the Brexit vote, CIOs need to cast their eyes beyond immediate operational concerns and look at how it will change their industry, the digital sector and the wider economy, says KPMG CIO advisor Adam Woodhouse.
It has been a long and testing month for chief information officers as they seek to understand the implications of Brexit. For many it will pose a significant operational challenge. But, for those who can lift their heads from contingency planning and take a more strategic view, it can also present opportunities.
In particular Brexit could offer prospective acquisitions for niche and start-up businesses – which previously had no problem attracting funds through private equities and venture capitalists. My colleagues in KPMG’s Debt Advisory business say many funds are sitting on the fence until things settle down, allowing bold CIOs to get the jump on the competition and pick-up the best of the bunch.
Securing talent is another area. We know the UK has as many highly-skilled digital professionals, including scientists and cyber-security specialists, as anywhere in Europe - according to our recent survey of CIOs. One CIO, of a European corporate, told me, “If I’m looking where I can acquire skills, I know they are in the UK and now they have just got cheaper”. The UK could be on the verge of becoming a destination for corporates to near-shore technology skills and digital work.
Brexit is a catalyst for change because it will force CIOs to look at their systems, governance and tackle the “this is the way we’ve always done things” mentality. What better time to drive out complexity, simplify IT architecture and improve services? Although most in the business community did not want the referendum to go the way it did, Brexit could be the thing that delivers their proudest legacy. However, CIOs need to address the short, medium and long-term risks Brexit presents. Staff from the EU may feel uneasy about their future. Firms which heavily depend on foreign expertise may be worried about losing those staff or attracting talent from EU countries.
Organisations could also delay or cancel large funding approvals and the drop of the pound may require recalculating planned projects, especially in cases of buying software, services, hardware or using foreign-based teams.
CIOs need to be aware the EU rules will remain in place until the final exit agreement due in 2019. One of the most important pieces of regulation is the General Data Protection Regulation (GDPR) – the toughest data protection rulebook ever drafted – which comes into force in May 2018. Even in the UK’s exit, firms that want to trade and exchange information with the EU will have to adhere to the GDPR or an adequate comparable.
So, where does the CIO start? Before being bogged down with the details map out what the priorities are for the next two weeks, two months and two years, the 2:2:2 approach.
2 week focus: support staff here and abroad. The rules are complex and could change depending on the UK exit agreement. Understand your exposure to currency fluctuations and its impact on your technology budget.
2 month focus: Understand exit scenarios and impacts. Find out where your data is hosted and develop a data location strategy. Understand the GDPR requirements for your organisation and open a dialogue with your suppliers to identify and fix weakness including the sudden disappearance of one.
2 year focus: simplify your organisation so it can react quickly to changing events. Look at relocating planned projects and re-examine budgets to see if you could capitalise on foreign exchange movements. Refresh your IT sourcing strategies in light of GDPR. Above all, do not let Brexit drive innovation into the ground or force you onto the back foot.