This year’s State of the CIO study outlines how the role of the CIO continues to evolve in today’s business climate, and explores their business and tech initiatives as they navigate the impact of the current economic climate.
To highlight key parts of the research, Foundry partnered with IDC/CIO Executive Council for a discussion, hosted by John Gallant, enterprise consulting director at Foundry and Tim Scannell, VP of strategic content at the CIO Executive Council. They are joined by Jo Abernathy, CIO at Blue Cross Blue Shield of North Carolina and Gary Jeter, EVP & CTO at TruStone Financial Credit Union.
This far-ranging conversation covers tech budgets; is tech spending “recession-proof”, are budgets for technology consolidating into the CIOs realm (with side conversations about the impact on security, and citizen developers); earning the right to innovate; how organizational structure around budgets impact security; and more.
This short excerpt hits the highlights, but watch the 2023 State of the CIO webcast to hear much more from our CIO guests, and the key points from the State of the CIO research.
Budgets holding strong
Technology budgets are continuing to see growth in 2023. In fact, 91% of CIOs expect their tech budget to either increase or stay the same – the #1 reason for an increase being the need for security improvements. This data point elicits an interesting discussion among the group.
Gary Jeter believes that “…this is common throughout a lot of the financial industry, the view is, I believe, that technology is recession-proof… my budget this year as far as OPEX grew, a part of that was from consolidating IT spend into technology…”. He explains that their focus is to improve productivity through technology and better leverage it to advance analytics to retain and gain customers.
“In spite of economic concerns, I think the results may indicate that enterprises are taking the long view on tech investments and viewing them as key to either driving down operational costs or driving up revenue or both…” says Jo Abernathy.
Earning the right to innovate
Looking at what CIOs are focused on now versus what they want to be focused on in three years – the current list shows security at the top, along with improving IT operations and systems performance, managing infrastructure and applications which could be considered very operationally focused. Three years from now CIOs want to be spending their time driving business innovation, redesigning business processes, aligning IT with business goals. Our experts weighed in on the tension between these two:
“…when you look at what they’re focusing on as far as from an Ops performance perspective, you have to earn the right to innovate … for us yes, we’re focusing on operational excellence but a good portion of 2023 is going to be about delivering different experiences, removing friction from our members or customers…”, says Jeter.
For both CIOs, innovation is important. Abernathy believes, “… that’s one of the wonderful things about being a CIO and one of the things that’s extremely challenging about being the CIO…you have to advance the basics all the time whether it’s dealing with legacy tech or security or operations … and be able to swivel chair and show your business partners that you can help lead in innovation and business opportunity …”
When technology dollars are controlled by IT versus other parts of the organization – our study found that only 43% of all technology dollars are controlled by IT, this was surprising and problematic to our CIOs.
“… I would say it did surprise me … I think that just like being a CFO or a chief marketing officer, you have to have that relevant experience. I feel very strongly that CIOs can’t be accountable in title but not in practice….I think that much like running IT, managing technology vendors and contracts short-term and long term and having strategies around those it’s just not something that typically is done very well in business areas they just don’t have the experience and frankly the failures and the scars to learn from it I just think that this always sub-optimizes technology even if it’s unintentional so I am not a fan of Distributing Tech” says Abernathy.
“…I’m struck when we look at the concern about security, when we think about things like customer experience, I don’t understand how we can do those things well in a distributed fashion …” explains John Gallant.
Jeter replies, “I’ve had a similar experience where essentially a business unit would look at the IT rate card and a vendor would come to them and say hey we can deliver a cheaper [solution] when reality they’re not delivering it cheaper and it creates a lot of tech debt and then when there are issues IT has to come in and basically rectify it and solve it so I’m sure a lot of the CIOs out there know what I’m talking about because that’s very very painful…”
CIOs’ role in revenue generation
Within the research, 44% say they’re managing a team tasked with creating new revenue generating initiatives, another 24% are part of a team that’s doing that and about a third are not responsible for new revenue generating initiatives – our CIOs explain how this looks in their organizations.
Abernathy explains, “We are not directly accountable for driving innovation, we are seen as a very critical partner. We have a diversified business group, which is also our strategy group, and they’re always looking at new opportunities to partner and to invest. We have a great relationship with them and they always call us in to get our take and to get our opinion to help shape deals…”
“… the digital banking channel is an IT responsibility, so my solution architect is in charge of development. His responsibility is also called the VP of innovation, so he’s hitting conferences along with others and looking at all the different fintechs that are out there and understanding the business and understanding how it can remove friction and how can it solve problems …so we are responsible for driving revenue” says Jeter.
The emerging topic of ESG
The discussion closed out with a lightning round question about ESG – this is the first year we asked about environmental, social and governance issues in the State of the CIO research, with three different questions regarding if it’s going to shape buying habits and interactions with vendors, and how organizations are dealing with it.
“We are very much in the nascent phases of ESG – we are beginning to gather reports from our key suppliers and to set a strategy for ourselves. I’ll be honest when I thought about this topic I tended to think about things like manufacturing and industries completely outside of my own until I looked at some statistics around data centers and how we contribute to the carbon footprint. And while a lot of that we don’t directly control, as you said, we can certainly control it by our decisions around which suppliers we use, so we’re in the beginning phases of shaping our strategy. I think it’s going to go from a nice-to-have to something you have to have for your key stakeholders…everybody should be focused on it”, Abernathy explains.
“I would agree, we’re really in the beginning stage and so we’re still in the process of looking at how do we tie it in, but it’s the right thing to do so we absolutely have to do it, and it’s also key to attract talent.”, says Jeter
2023 is going to be a year of challenges, changes, and uncertainty, but our CIOs believe organizations see IT as a business driver and they are in better shape than three years ago.
For additional insight from our CIO guests, watch the full webcast here. To learn more about how CIOs are spending their time and prioritizing certain initiatives, download the 2023 State of the CIO executive summary, the 2023 State of the CIO white paper, and the 2023 CIO Tech Poll: Tech Priorities executive summary.