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Pace of digital innovation quickens and large companies struggle to keep up

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Pace of digital innovation quickens and large companies struggle to keep up

Big data analytics jumps to No.1 in demand skill, big growth in CDO roles.

Digital innovation is dominating the agenda of technology leaders, but many companies are struggling to manage it, according to the Harvey Nash 2015 CIO Survey in association with KPMG. The pace of digital and the race to innovate has left many organizations lacking an enterprise-wide digital strategy and desperately seeking to acquire the right skills. Despite efforts to close the skills gap, this year skills concerns are running one third higher than in 2013. The demand for big data analytic skills has leapt to the number one most-needed skill, skyrocketing to almost six times higher than the next-most-scarce skill, change management.

Two thirds (66%) of CIOs report digital disruption [change resulting from digital technologies that disrupt established business models] as a very significant change to their business, driving them to create new business models and bring new products and services to market faster than before.

Globally, large companies report being at a disadvantage when it comes to digital, with only 17% percent of them saying they believe they’ll do ‘much better’ than competitors in managing digital disruption, compared to 35% of small organizations. Only one in ten CIOs believe their organization will be unaffected by digital disruption in the coming years.

“To get ahead, CIOs need to focus on defining their operating model to support a digital business." 

Albert Ellis, CEO of Harvey Nash Group, commented on the findings. “What’s most striking about the results is the speed of change. In the seventeen years we have conducted the survey we have never seen a new role grow so quickly as we have the Chief Digital Officer. We have never seen demand for a skill expand so quickly as we have for big data analytics. As technology increasingly becomes focused on the customer, the IT, marketing and operations teams are increasingly working together in new ways. Sometimes it creates friction, uncertainty and skills challenges, but for a CIO with the influence, connections and technical ability to bring it all together, it’s an exciting place to be.”

According to Lisa Heneghan, Head of EMA CIO Advisory, KPMG in the UK, “CIOs are concerned that they could lose significant market share to competitors more adept at using technology, yet despite this threat, three in four still don’t have a company-wide approach to digital. Unless CIOs cement this vision, the chance of being overtaken appears a foregone conclusion.

“To get ahead, CIOs need to focus on defining their operating model to support a digital business now, and driving through the cultural shift which is fundamental to success.”

Additional key findings from the survey include:

The Chief Digital Officer is growing in prominence, but the role is still evolving

  • The role of the Chief Digital Officer (CDO) is growing in importance. Seventeen percent of CIOs now work with a CDO, up from only 7% last year. An additional five percent of respondents said they will hire will hire a CDO in the next several months. 
  • The CDO role varies significantly with organizations. Where organizations have CDOs in place, only just under half (47%) have that person taking full leadership of the digital strategy, with the remaining organizations preferring the CIO, CMO or CEO to take the lead.

CIOs are becoming more confident in the role they play in digital

  • Reversing a trend identified in 2012-14, marketing departments that exclusively own digital is down to 24%, from 40% last year. Conversely, the number of IT departments that own digital is on the rise, up to 18%, almost doubling its influence from last year. There has also been a 7% jump in joint ownership between both marketing and IT.
  • CIOs are enjoying a stronger relationship with marketing this year, with 33% rating it ‘very strong’, up from 30% last year. Where the digital strategy is jointly owned by IT and marketing the relationship is strongest, with 41% of CIOs rating it ‘very strong’.

Accessing skills from outside the organization

  • Half  of CIOs report they are increasingly using outsourcers to supplement skills they can’t find in house; this compares to just 25% of CIOs who are looking to their outsourcers to save them money, suggesting an evolving role for outsourcers. 
  • In 2015, six out of seven CIOs will increase their outsourcing spend.
  • Four in ten of CIOs plan to increase their investment in offshoring this year.

Top CIO operational priorities

  • Business intelligence and analytics made the biggest jump up the priority list compared to last year, with almost half (47%) setting it as a top priority. 
  • Increasing efficiencies topped the list of CIOs’ operational priorities this year, at 61%. 
  • Cost-cutting dropped in importance by 16%, compared to 2013.

Cyber security represents a very real threat

  • Globally, one in four CIOs (25 percent) reported their companies had to deal with major IT security incidents in the past 12 months. 
  • Only 23% of respondents are “very well” prepared, down 6 percentage points from last year.

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