by Mark Chillingworth

Analysis: Harvey Nash CIO Survey 2010

May 13, 2010

Starting afresh seems to be a bit of theme of late and the 2010 CIO Survey by recruitment firm Harvey Nash indicates that the CIO role has achieved a great deal and is now in a position to reboot itself into a more strategic and influential role.

The full report is available from the Harvey Nash websiteand offers plenty of detail. Below is an analytical summary of the most important points raised in the survey for the UK CIO. For 2010 Harvey Nash took the survey global and this has made some of the findings particularly interesting from a UK angle.

Despite the difficulties the world economy has suffered during the credit crisis, the CIO has benefited as CEOs have come to realise the strategic importance that IT has for the organisation to reduce costs, improve processes and facilitate customer interaction. Overall, the IT function of organisations has lost its old demeanour of just being a cost centre. Fifty per cent of the global respondents report to the CEO and 26 per cent to the CFO, with 59 per cent of CIOs having a seat on an operational board. In Europe, 32 per cent of CIOs report directly to the CEO, 17 per cent to the CFO and 11 per cent to the COO.

Across Europe there is a positive attitude towards the strategic trajectory of the CIO role, with 64 per cent saying their role is becoming more strategic, which is now equal to the sentiment in the US, and which some believe has allowed the CIO to be more strategic than in Europe in the past. British CIOs are also doing well, with 53 per cent having responsibilities beyond our island.

Globally, Harvey Nash reports that the strategic nature of the CIO role is growing; stating that 71 per cent of CIOs expect to be making more strategic decisions in the next 12 months.   CIOs in Britain, Germany and the US are, as a result, the most ambitious about investment opportunities in 2010.

But CIOs are not driving innovation as vigorously as perhaps they desire: 55 per cent of the global survey group said they are not setting innovation targets. But British CIOs are leading the pack with 83 per cent putting innovation at the centre of their IT investment plans, with 30 per cent saying they will put 10 per cent of their budget on innovation.

Across Europe IT budgets are still very restrained and there is a double edge to the success CIOs have had in tightening budgets during the downturn – they are expected by the CEO to continue to operate in this way in an upturn. Harvey Nash found that 43 per cent had their budgets cut in the last 12 months and 29 per cent had the budget frozen. For 30 per cent of the respondents in Europe they expect a lower budget and 41 per cent don’t believe there will be any new IT investment in the next 12 months.

As a result, outsourcing will remain a primary part of the IT strategy for European CIOs and the survey found that 87 per cent will either increase their outsourcing commitments or maintain it at current levels.

Globally, CIOs are managing budgets in excess of $1bn in the case of two per cent of respondents, with 50 per cent managing budgets of around the $10m mark, 28 per cent managed budgets between $10m and $50m and 20 per cent have budgets between $50m and $1bn. In the UK, 42 per cent of CIOs had their budgets cut and 29 per cent had a freeze placed on them. Although the recovery has begun on our shores, 28 per cent expect further budget cuts this year and 39 per cent think their budget will remain frozen.

CIOs are looking forwards and viewing what new opportunities technologies will offer their organisations. But the credit crisis means that many fear that there is a skills shortage which will hamper the development of new technologies. In the UK, 56 per cent of CIOs are concerned that they will face a skills shortage, an increase of two per cent, Harvey Nash reports. CIOs are seeking to recruit business analysts, project managers and architects. Globally, 58 per cent of CIOs believe they will struggle because of a skills shortage. The technology that is attracting the most interest is Software-as-a-Service (SaaS), with 35 per cent of global CIOs listing it. Read the CIO UK Harvey Nash research into talent retention and management here

The survey revealed that CIOs are keen to develop their skills further to drive the role and their careers further forwards. In Britain, 82 per cent of CIOs believe communications and influence skills are vital for improving their career prospects and 57 per cent of CIOs plan to take on an MBA course in the future.

On the salary front the UK CIO is earning £100,000 in 40 per cent of cases, which Harvey Nash believe, to be eight per cent below the global average CIO salary, but the UK CIO is very pragmatic, with 74 per cent saying they would freeze their salary package for 2010 to help the organisation return to profit.