CIOs, CTOs playing greater role in technology decisions

New research from Deloitte shows that CIOs and CTOs at mid-market companies are in the drivers' seat more often when it comes to technology decisions.

leadership circle

Rather than focusing only on cutting spending and reducing overhead, CIOs and CTOs are now more like to be calling the shots when it comes to technology investments, according to new research from Deloitte Growth Enterprise Services.

Deloitte Growth Enterprise Services polled 500 mid-market executives (in a survey fielded between June 17 and July 5 at companies with revenues between $100 million and $1 billion) and found that 49 percent of technology adoption is now led by IT department leaders, compared to only 36 percent in 2015.

"What we found is that, in the past, CIOs and CTOs reported to the COO or CFO, and they weren't getting as much of a seat at the table as far as strategy and more tactical initiatives go. Their role was just to make sure IT departments and technology spending were kept under control and overhead was low -- but with the cloud and digital, tech leaders are seen as more than just a cost center, they've become increasingly strategic and their voices are louder," says Steve Keathley, national technology leader, Deloitte Growth Enterprise Services and Partner Deloitte Consulting, LLP.

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Mid-market organizations are increasingly seeing productivity gains and a faster time-to-value as a result of technology investment, which is driving a willingness to see technology as a solid investment, Keathley says. The survey revealed that 54 percent of respondents say their companies' technology spending is higher than last year and 28 percent say their technology spending is more than 5 percent of revenue.

Show me the money

Where are mid-market organizations focusing this increased technology spend? On areas like cloud, internet of things, virtual reality, augmented reality, and beefing up cybersecurity infrastructure and services, Keathley says.

According to the research, increased productivity is the top reason for respondents' investments in technology. Cloud infrastructure, analytics, and big data rank at the top of technologies most likely to generate productivity gains. Among emerging technologies, 88 percent of respondents use some form of virtual or augmented reality in their business; for IoT, 56 percent of respondents report mature deployments or that they are building those capabilities.

"We're seeing two areas of focus: one in technology that can boost productivity and improve operational effectiveness and the second in areas that help businesses connect with their customers in new and innovative ways, like in training simulations for manufacturing, healthcare and life sciences. Think of examples like the backup cameras in newer cars. They incorporate elements of augmented reality by overlaying data onto the camera image, for instance. Or, in consumer-focused areas, think of Pokémon Go and how that has really taken off," Keathley says.

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Security spend

Finally, cybersecurity is also a major driver of the increase in technology spend, according to the research. Thirty-six percent of executives identify "managing cybersecurity and information risk" as their top technology priority. Not surprisingly, 61 percent say implementation of new security processes is the most important focus of their cybersecurity spending.

"We're seeing companies using cloud-based and integrated security capabilities from their cloud vendors, because it's really a bet-the-business proposition nowadays with all the breaches and threats. They're becoming more mature in their cybersecurity posture and realizing that it's not just about firewalls, passwords and spam -- the human element is becoming increasingly important," Keathley says.

Copyright © 2016 IDG Communications, Inc.

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