Deloitte Australia CIO Survey 2014 CIOs: At the Tech-junction...communicating – business value; and aligning talent with the business mission. VCs operate in a high-stakes environment

Deloitte Australia CIO Survey 2014CIOs: At the Tech-junction

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Introduction

Welcome to the 2014 Deloitte Global CIO Survey report. In our second year of conducting the survey we have extended our coverage to over 900 CIOs across 49 countries within the Americas, Europe, the Middle East, Africa, Asia and Oceania. Australian CIOs continue to be major contributors to the survey, providing some fascinating comparisons to global peers on investment, risk appetite, priorities, adoption and positioning within the corporate hierarchy.

Last year we explored the effectiveness of CIOs as business partners and the need for them to step up to make a greater impact within the board room. This year, we extend the concept and turn the spotlight on the role of the CIO as a business leader of growth through innovation. In particular we explore the idea of the CIO as a Venture Capitalist, an interesting trend we examined in our Tech Trends 2014 report.

We also explore the world of analytics in our “hot topic” section, discussing current adoption levels and key barriers to more widespread use.

This report presents the highlights from the 2014 Deloitte Global CIO Survey. Within each chapter you’ll find:• A summary of the key insights across all respondents internationally• An interactive infographic which allows you to view the findings by major global

region and industry sectors• Commentary, observations and insights from Deloitte specialists to help tackle some

of the key challenges cited

We hope you find this report a valuable tool to help further develop your role as a trusted IT leader. To the many Australian executives who have provided input into the 2014 Deloitte Global CIO Survey, thank you for your time and insight. We look forward to continuing the dialogue with you.

Introduction

Summary of findings

IT budgets and priorities

CIO portfolio

CIO relationships

CIO pulse

Hot topic: analytics

Regional variations

About the participants

Robert HillardManaging PartnerTechnology Agenda, [email protected]

The Deloitte CIO Survey 2014CIOs: At the Tech-junction

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mailto:rhillard%40deloitte.com.au?subject=

Deloitte Australia CIO Survey 2014Driving technology further in the digital ageThe Deloitte CIO Survey 2014CIOs: At the Tech-junction

“Comparisons between CIOs and VCs may seem like a stretch. CIOs can’t shoot from the hip on risky investments. They provide critical services that the business simply can’t do without, where the risk of getting it wrong could be catastrophic. At the same time, there’s a lot to learn from the portfolio mindset that VCs bring to their work: balancing investments in legacy systems, innovation and even bleeding-edge technologies; understanding and communicating – business value; and aligning talent with the business mission. VCs operate in a high-stakes environment where extraordinary value creation and inevitable losses can coexist inside a portfolio of calculated investments. So do CIOs.” (Tech Trends, Deloitte, 2014)

Introduction

Summary of findings


CIO portfolio

CIO relationships

CIO pulse


Regional variations


3

Summary of findings

Technology investment remains a strategic priority for companies globally and in Australia, many of which are coming under increasing budgetary pressure to produce more with less. Disruptive technologies such as data analytics, the cloud and social media continue to affect the way businesses operate in the new digital economy, and chief information officers (CIOs) have had to recalibrate their IT spending models accordingly.

Outcomes take priority over growthCIOs globally continue to see delivering business outcomes as their primary responsibility, with 55% of CIO budgets focused on supporting the delivery of core IT services and only 22% assigned to business growth. Australian CIOs reported an even lower percentage of budgets assigned to supporting growth, at 17%.

However, 76% of Australian CIOs did state that their top priority over the next 18 months would be supporting new business needs, while 54% said they would prioritise developing digital strategies. These numbers are roughly in line with the global figures of 71% and 47% respectively.

Keen technology adoptersAustralian CIOs are also ahead of the global curve in terms of adopting and implementing technology. The public cloud (adopted by 64% of CIOs), the private cloud (80%), mobile apps (82%) and social media (71%) were all standout figures from this year’s survey.

Another key finding was Australian CIOs’ relative lack of concern about security compared with their global peers. While global CIOs listed risk and security as major priorities over the next 18 months, they didn’t feature in the Australian survey. This relative lack of concern may be because Australian organisations have so far been safe from the kind of high-profile security breaches or cyber-attacks that occurred in Europe and North America this year – or down to complacency!

82% of Australian CIOs also said they had a high tolerance to risk, possibly because they are not always directly responsible for how much money they have in their budgets and where they can spend it. Global and local CIOs both said the biggest impediment to riskier IT spending was the attitude to risk adopted by more senior executives in their organisations.

Introduction

Summary of findings


CIO portfolio

CIO relationships

CIO pulse


Regional variations



Summary

4

Summary findings: infographic

Budget allocationBusiness as usual vs. Change & growth

CIO relationshipHow effective is your IT function in business partnering?

IT prioritiesTop priorities for the next 12-18 months

CIO portfolioIT budget ring-fenced for innovation

19%

More CIOs rate themselves as strong and effective compared to last year

27%

Business as usual Change & growth

23%Supportbusinesschange

22%Supportbusinessgrowth

55% 71% 47%

CIO pulseWhat’s stopping you from making risker IT investments?

#1 Business leaders’attitudes to risk

45%

Support new business needs Driving digital strategy

Ring-fenced0-1%

Ring-fenced1-10%

10%

38%

GlobalIntroduction

Summary of findings


CIO portfolio

CIO relationships

CIO pulse


Regional variations



Infographic

5

Summary findings: infographic

Budget allocationBusiness as usual vs. Change & growth

CIO relationshipHow effective is your IT function in business partnering?

IT prioritiesTop priorities for the next 12-18 months

CIO portfolioIT budget ring-fenced for innovation

43%

More CIOs rate themselves as strong and effective compared to last year

19%

Business as usual Change & growth

26%Supportbusinesschange

17%Supportbusinessgrowth

57% 76% 54%

CIO pulseWhat’s stopping you from making risker IT investments?

#1 Business leaders’attitudes to risk

43%

Support new business needs Driving digital strategy

Ring-fenced0-1%

Ring-fenced1-10%

28%

47%

Introduction

Summary of findings


CIO portfolio

CIO relationships

CIO pulse


Regional variations



Australia

Infographic

6

IT budgets & priorities: key findings

Globally, only 23% of CIOs reported a decrease in their budgets in 2014. Most continued to allocate the majority of their spending to routine IT activities, although there was a 3% shift towards change and growth activities, which may reflect a more positive macro-economic environment.

In Australia, 80% of CIOs stated that their budgets had remained the same or increased over the past 12 months, up from 76% in last year’s survey.

Changing circumstances mean changing prioritiesPriorities have shifted slightly since last year. Supporting new business needs, driving digital strategy and reducing IT costs remained among the top four priorities for Australian CIOs. Restructuring the IT operating model also made the top-four list this year, replacing strengthening risk and security, which remained one of the four main priorities for CIOs elsewhere.

IT budgets are being restructured across Australian companies, reflecting the increased importance of a strong digital strategy and the high uptake of technologies such as analytics and mobile apps. There was also a major cost focus in Australia relative to other locations, as Australian CIOs came under pressure to make their IT spending as profitable as possible.

Greater risk appetitePiloting, implementation and adoption have all increased for big data, bring-your-own-device (BYOD) strategies, mobile apps, private and public clouds, social media, augmented reality, gamification, and digital and multi-channel technologies. This reflects a greater risk appetite among Australian CIOs, and a willingness to adopt technology at an accelerated rate compared with the past few years, when Australia fell behind the global curve of technology adoption.

Introduction

Summary of findings


CIO portfolio

CIO relationships

CIO pulse


Regional variations


Kevin RussoPartner Consulting, [email protected]

Craig MitchellPartner Risk Services, [email protected]


Key findings

7

IT budgets & priorities: infographic

IT budgetsAnnual shifts

Levels of technology adoption2013 vs. 2014 – Piloting, implementing and adopted

IT prioritiesIn next 12-18 months

22%

78% The same,or up from2012

2013

Downfrom 2012

Support new business needs

Drive digital strategy

Reduce IT cost

Strengthen risk & security



Reduce IT cost


2014

2013

VS

2014

Public cloud Analytics /Big data

BYOD Mobile apps Private cloud Social media Augmented reality

Gamification Digital /multi-channel

34% 43% 43% 48% 41% 47% 47%63% 69%

55% 65%52% 54%

16% 13% 8% 13%NA


23% Downfrom 2013

2013 2014

Introduction

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CIO relationships

CIO pulse


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Global

Infographic

8





21%


2013

Downfrom 2012



Reduce IT cost




Reduce IT cost


2014

2013

VS

2014




55%25% 31% 40% 47% 41%

57%50% 62% 52% 52% 46% 43%

10% 9% 10% 9%


19% Downfrom 2013

2013 2014

NA

Introduction

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CIO portfolio

CIO relationships

CIO pulse


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FSI

Infographic

9





20%


2013

Downfrom 2012



Reduce IT cost




Reduce IT cost


2014

2013

VS

2014




49% 50% 40% 52% 42% 47% 44%50%71% 59% 69% 50% 55%

16% 13% 7% 15%


21% Downfrom 2013

2013 2014

NA

Introduction

Summary of findings


CIO portfolio

CIO relationships

CIO pulse


Regional variations



Private Sector

Infographic

10





36%


2013

Downfrom 2012



Reduce IT cost




Reduce IT cost


2014

2013

VS

2014




37% 42%27%

42% 39%52% 44%41%

70%

38%67%

52%69%

22% 14% 8% 12%


35% Downfrom 2013

2013 2014

NA

Introduction

Summary of findings


CIO portfolio

CIO relationships

CIO pulse


Regional variations



Public Sector

Infographic

11





20%


2013

Downfrom 2012


Reduce IT cost

Reduce IT cost

Develop ITstaff & skills




Restructure IToperating model

2014

2013

VS

2014




44%64%

32%

57%48% 48%

64% 64%82%

52%55%

80%71%

13% 11% 8% 18%NA


24% Downfrom 2013

2013 2014

Introduction

Summary of findings


CIO portfolio

CIO relationships

CIO pulse


Regional variations



Australia

Infographic

12

CIO portfolio: key findings

Australian CIOs are more confident about their IT portfolio mixes than their global counterparts, according to this year’s survey. When given the statement, “I actively evaluate the performance of my technology portfolio in terms of value, risk and reward”, 76% of Australian CIOs answered positively compared to only 63% of global CIOs.

They are also far ahead of the global curve when it comes to seamlessly integrating multiple suppliers; 68% of CIOs had achieved this compared with only 48% of global CIOs, which may reflect a greater ability to leverage relationships with suppliers.

Budget restraints hamper diversificationHowever, local CIOs appear to be overly focused on delivering outcomes just to get the job done. There may be greater willingness to diversify their IT portfolios but they are still hamstrung by tight budgets and the risk aversion of their company’s senior executives.

Australian CIO results were basically in line with those of global peers, with both groups recording the delivery of business outcomes through IT services as their number one portfolio priority.

Similarly, Australian CIO responses as to where they would spend more money if they had it were in line with the global survey. 29% of respondents opted for analytics and data (the figure was 30% for global CIOs), followed by 12% for mobile apps and 13% on the public cloud.

Interestingly, 13% of local CIOs said they would spend more on end-user device convergence, which didn’t rate a mention in the global survey. And only 11% of Australian CIOs said they would spend more on digital and multi-channel technology, the same number recorded in the global survey.

Greater investment in disruptive technologiesThe figures reveal that although there appears to be some ongoing reluctance to innovate, Australian CIOs are willing to throw more of their resources at disruptive technologies than their global counterparts. 47% of Australian survey respondents said they believed they were “making investments in emerging technologies”, which was higher than the global figure of 43%.

Despite this, the extent to which CIOs could actually innovate within the constraints of their portfolio’s budget was severely limited.

Introduction

Summary of findings


CIO portfolio

CIO relationships

CIO pulse


Regional variations



Key findings

13

IT portfolio managementKey positives and gaps

Dimension importance Dimension maturity

55%

35%

28%

22%

22%

20%

17%

70%

50%

41%

37%

21%

20%

48%

57%

63%

“I actively evaluate the performance ofmy technology portfolio in terms of value,

risk and reward”

“I am making investments in emerging technologies or considering partnerships

with external entities”

Agree

Disagree

Where you would invest more money if you had it?

30%

17%

15%

11%

8%

2%

2%

1%

1%

Analytics / Big data

Mobile apps

Private cloud

Public cloud

BYOD

Social media

Gamification

Digital /Multi-channel

Augmented reality

Delivery of business outcomesthrough IT Services

Enhancing customer experiencethrough technology

Building a more agile IT delivery model

Capitalising on data held withinyour organisation

Transforming IT from costcentre to profit centre

Investing in emerging technologies

Seamless integration ofmultiple suppliers

Key dimensions of CIO portfolio

CIO portfolio: infographic

Introduction

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CIO portfolio

CIO relationships

CIO pulse


Regional variations



Global

Infographic

14












59%

41%

28%

21%

16%

20%

14%

71%

47%

40%

35%

16%

13%

43%

65%

70%


risk and reward”




Mobile apps

Private cloud

Public cloud

BYOD

Social media

Gamification


27%

17%

12%

25%

3%

3%

1%

0%

0%

Augmented reality

Agree

Disagree

Agree

Disagree


Introduction

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CIO portfolio

CIO relationships

CIO pulse


Regional variations



FSI

Infographic

15



54%

34%

27%

24%

23%

19%

17%

70%

50%

43%

39%

25%

26%

52%


53%

62%


risk and reward”



Agree

Disagree

29%

18%

14%

9%

9%

2%

2%

2%

1%


Mobile apps

Private cloud

Public cloud

BYOD

Social media

Gamification


Augmented reality










Introduction

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CIO portfolio

CIO relationships

CIO pulse


Regional variations



Private Sector

Infographic

16



50%

36%

29%

20%

27%

21%

18%

65%

54%

37%

34%

14%

13%

43%

64%

57%


risk and reward”



Agree

Disagree


36%

14%

20%

3%

10%

2%

0%

2%

2%


Mobile apps

Private cloud

Public cloud

BYOD

Social media

Gamification


Augmented reality










Introduction

Summary of findings


CIO portfolio

CIO relationships

CIO pulse


Regional variations



Public Sector

Infographic

17




66%

38%

29%

25%

16%

11%

16%

73%

44%

41%

33%

19%

7%

68%

53%

76%


risk and reward”



Agree

Disagree


16%

29%

13%

13%

11%

9%

4%

2%

2%

2%

Mobile apps


Public cloud

End userdevice convergence

Private cloud

Augmented reality

BYOD

Gamification


In memory computing









Introduction

Summary of findings


CIO portfolio

CIO relationships

CIO pulse


Regional variations



Australia

Infographic

18

CIO portfolio: insights

Recruit entrepreneurs

IT functions with a focus on innovation should look to recruit entrepreneurial talent. This may be challenging because many IT organisations lack the capability to invest strategically. However, internal business units can be a source of talent, and CIOs should further tap this resource. Marketing and digital functions often contain rich veins of talent and, CIOs take note, may well be the source of future technology leaders. Monetise IT developed for internal use

For IT functions tasked with innovating to expand revenue streams, it isn’t much of a stretch to sell IT systems developed for internal use to customers of their organisations. For example, a leading international organisation that helps biopharmaceutical companies to develop and bring drugs to market faster, easier and more cost-efficiently transformed its IT systems used by internal staff into cloud based services and software. This recently netted the company over $40 million in new business.

Change what you measure and how you measure itThe success of a portfolio designed to deliver business growth through technology innovation is measured differently to a portfolio designed to deliver IT services aligned to business strategy. Venture capitalists continually assess their portfolios on the basis of risk versus reward, with the ability to rapidly change priorities in response to market conditions. Metrics such as revenue growth, operating margin improvement and shareholder value are useful benchmarks in this context.

Kurt Proctor-ParkerPartner Consulting, [email protected]

Kevin NevrousPartner Risk Services, [email protected]

Introduction

Summary of findings


CIO portfolio

CIO relationships

CIO pulse


Regional variations



Insights

19

CIO relationships: key findings

This year’s survey revealed a surge in the number of Australian CIOs who believe their business partnering is effective – jumping to 60% from 32% in last year’s survey, a far greater percentage rise than in the global survey, which rose from 39% last year to just 49% this year.

This result is particularly interesting given how negatively Australian CIOs scored some of their most essential stakeholder relationships. It is clear that Australian CIOs, like their global counterparts, can do a lot more to improve relationships with their external and internal stakeholders to get better results from their IT functions.

Disconnect with company CEOsAustralian CIOs are clearly suffering from a disconnect with their chief executive officers (CEOs) – 77% rated the relationship as very important but only 35% rated it as good. Global CIOs also rate their relationship with the CEO as very important (79%), while only 42% said they had a good relationship – higher than the local figure but still implying difficult relationships in a constantly changing IT environment.

Conversely, CIOs’ relationships with their chief financial officers (CFOs) are much better – 74% of survey respondents said it was a very important relationship and 75% said the relationship is currently good. This may reflect how closely CIOs work with their CFOs,

who are often more responsible for approving their budgets than the CEO. Additionally, only 22% of Australian CIOs think they have a good relationship with other CIOs, lower than the 26% recorded for the global survey.

Local CIOs also need to build stronger relationships with their chief marketing officers and chief digital officers – both of which are likely to be responsible for driving business innovation. Only a small percentage of CIOs said they currently had good relationships with either of these executive groups (11% and 18% respectively), though neither ranked high in importance.

Work needed on external stakeholder relationshipsAustralian CIOs also need to improve their relationships with key external stakeholder groups. Survey respondents reported very few ‘good’ relationships with their customers (11%), regulators (11%) and product suppliers (39%), despite ranking all three groups as relatively important (50%, 27% and 61% respectively).

In fact, Australian CIOs rated lower than the global ‘good relationship’ average in nearly all major categories. This could be grounds for concern, but also highlights opportunities to build on existing external relationships, which will enable CIOs to better exploit the latest technology product offerings.

Introduction

Summary of findings


CIO portfolio

CIO relationships

CIO pulse


Regional variations



Key findings

20

20142013

IT strategic business partnering:How effective is your IT function?

External stakeholders(Perceived importance vs actual strengthof the relationship)

39%49%

24%

26%

55%

32%

17%

26%

16%

11%

36%

60%

7%

45%

16%

33%

11%

30%

Internal stakeholders(Perceived importance vs actual strengthof the relationship)

Very important relationship

Very goodrelationship

Strong partners to the business

39%

48%

79%

65%

36%

40%

42%

51%

30%

54%

29%

62%

23%

43%

15%

40%

53%

31%

47%

38%

34%

25%

Chief data officer

Chief digital officer

Chief executive officer

Chief humanresources officer

Chief financial officer

Chief informationsecurity officer

Chief marketingofficer

Chief operationsofficer

Chief procurementofficer

Head of sales

M&A director

Alliance partners

CIO networks

Customers

Shareholders

Regulators

Suppliers

Technologyanalysts

Vendors



CIO relationships: infographic

Introduction

Summary of findings


CIO portfolio

CIO relationships

CIO pulse


Regional variations



Global

Infographic

21

20142013



45%54%



Alliance partners

CIO networks

Customers

Shareholders

Regulators

Suppliers

Technologyanalysts

Vendors

23%

16%

55%

50%

14%

23%

22%

14%

37%

59%

7%

49%

22%

29%

9%

26%




Chief data officer










Head of sales

M&A director

28%

46%

77%

50%

31%

46%

55%

42%

26%

57%

28%

79%

33%

38%

11%

33%

55%

32%

61%

45%

35%

18%


Introduction

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CIO portfolio

CIO relationships

CIO pulse


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FSI

Infographic

22

20142013



39%50%

24%

27%

52%

25%

18%

26%

15%

9%

37%

61%

7%

45%

15%

35%

12%

32%



40%

53%

79%

69%

35%

40%

39%

52%

30%

50%

32%

55%

19%

44%

16%

42%

52%

31%

42%

35%

34%

27%



Chief data officer









Head of sales

M&A director

Alliance partners

CIO networks

Customers

Shareholders

Regulators

Suppliers

Technologyanalysts

Vendors




Introduction

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Private Sector

Infographic

23



20142013 32%38%

26%

35%

67%

36%

16%

30%

16%

13%

26%

56%

8%

38%

4%

30%

8%

25%



52%

34%

83%

67%

43%

29%

38%

56%

34%

60%

10%

64%

27%

28%

8%

42%

57%

27%

47%

41%

32%

17%



Chief data officer









Head of sales

M&A director

Alliance partners

CIO networks

Customers

Shareholders

Regulators

Suppliers

Technologyanalysts

Vendors




Introduction

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Public Sector

Infographic

24

20142013



32%60%

4%

25%

50%

27%

7%

22%

11%

11%

16%

61%

6%

45%

13%

39%

13%

39%





6%

10%

77%

74%

9%

11%

35%

75%

25%

20%

12%

46%

18%

14%

4%

45%

32%

18%

52%

32%

11%

9%

Chief data officer









Head of sales

M&A director

Alliance partners

CIO networks

Customers

Shareholders

Regulators

Suppliers

Technologyanalysts

Vendors




Introduction

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CIO portfolio

CIO relationships

CIO pulse


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Australia

Infographic

25

CIO relationships: insights

Refresh relationships New generation business leadership roles such as chief digital and data officers are gaining prominence. It is becoming essential for CIOs to nurture stronger and trusted relationships with emerging business leaders who champion disruptive trends and CIOs should cement relationships with leaders in these roles and work with them to enable innovation and growth. Crowdsource, ideate and commercialise

CIOs are starting to see the need to tap into expertise outside their organisations by embracing crowdsourcing and third party alliances to develop new revenue streams from existing technologies. Using crowdsourcing to ideate and develop new product lines is a powerful mechanism that may help CIOs develop business opportunities.

Improve C-level influence with stories

IT organisations looking to establish themselves as hubs of technology innovation need to influence their peers on benefits of IT investments. Whether it’s a presentation or interactions with internal stakeholders, CIOs should find interesting ways to get their message across. People tend to remember stories and narratives, especially when the message relates to emotions. CIO should use anecdotes and analogies to help people understand complex situations and pass on the information to third parties.

Kaylene O’BrienPartner Consulting, [email protected]

Alastair BanksPartner Risk Services, [email protected]

Introduction

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CIO portfolio

CIO relationships

CIO pulse


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Insights

26

CIO pulse: key findings

Key findings

For businesses that want to grow through technology innovation, there is still a lot that needs to be done to foster the right internal culture. Globally, over half of CIOs surveyed considered innovation important, but said they didn’t receive enough funding to deliver innovative solutions effectively.

In Australia, 58% of CIOs claimed IT innovation was a priority for their company, despite budget limitations. In fact, only 6% of Australian CIOs surveyed said they did not consider innovation to be a priority for their IT function, compared with 7% globally.

Risk aversion and budgetary constraintsIn Australia, the biggest two impediments to making riskier IT investments remained the risk-averse attitudes of business leaders, and budgetary constraints.

Australian figures were generally in line with global results regarding all other major ‘pulse’ indicators such as intuition and flexibility, though Australian CIOs were slightly more risk-tolerant. This could be the result of two very different mindsets, they either feel they already have the right security measures in place, or it may mean they are more blasé about the threat of cyber-attack, due to the lack of high profile cyber-attacks in Australia compared to North America and Europe.

Happy to innovate

The survey numbers show that CIOs are happy to innovate as much as is possible, and that digital disruption will continue to change the way customers interact with companies regardless of whether the companies prioritise IT innovation.

Introduction

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CIO portfolio

CIO relationships

CIO pulse


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27

Culture of innovation in your IT organisation

52%Innovation is not considered a priority for our IT function

7% Innovation is considered important priority but receives little funding within our IT function

Describe yourself as a CIO: The ends of the spectrum

Constraining factors: What’s stopping you from making riskier IT investments?

Risk averse

Risk tolerant

Intuitive

Rational

Flexible

Linear

Verbal

Numerical

Trusting

Sceptical

Collaborative

Takes charge

Imaginative

Deliberate

Business leadership’s attitude to risk

IT budget constraints

#1 #2

100%

80%

60%

40%

20%

0%

20%

40%

60%

80%

100%

CIO pulse: infographic

Introduction

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CIO portfolio

CIO relationships

CIO pulse


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Global

Infographic

28



5%Innovation is considered important priority but receives little funding within our IT function





#1 #2


Risk tolerant

Intuitive

Rational

Flexible

Linear

Verbal

Numerical

Trusting

Sceptical

Collaborative

Takes charge

Imaginative

Deliberate100%

80%

60%

40%

20%

0%

20%

40%

60%

80%

100%Risk averse


Introduction

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CIO portfolio

CIO relationships

CIO pulse


Regional variations



FSI

Infographic

29








#1 #2

Risk tolerant

Intuitive

Rational

Flexible

Linear

Verbal

Numerical

Trusting

Sceptical

Collaborative

Takes charge

Imaginative

Deliberate100%

80%

60%

40%

20%

0%

20%

40%

60%

80%

100%Risk averse


Introduction

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CIO portfolio

CIO relationships

CIO pulse


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Private Sector

Infographic

30



Innovation is considered important priority but receives little funding within our IT function





#1 #2

8%

Risk tolerant

Intuitive

Rational

Flexible

Linear

Verbal

Numerical

Trusting

Sceptical

Collaborative

Takes charge

Imaginative

Deliberate100%

80%

60%

40%

20%

0%

20%

40%

60%

80%

100%Risk averse


Introduction

Summary of findings


CIO portfolio

CIO relationships

CIO pulse


Regional variations



Public Sector

Infographic

31






Risk averse

Risk tolerant

Intuitive

Rational

Flexible

Linear

Verbal

Numerical

Trusting

Sceptical

Collaborative

Takes charge

Imaginative

Deliberate



#1 #2

100%

80%

60%

40%

20%

0%

20%

40%

60%

80%

100%


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Australia

Infographic

32

CIO pulse: insights

Don’t bet the business, take intelligent risks Being bolder with riskier IT investments in disruptive technologies does not mean that CIOs should look to bet the business. Successful venture capitalists hedge their investments to win on net positions. Similarly, CIOs wanting to lead on growth through technological innovation should look to ensure they balance their portfolio of technology investments with the right mix of safe and riskier propositions. Sharpen your business instincts

CIOs should stay on top of technology trends, their impact and how they might contribute to business growth. That may include educating peers and being perceived as the hub of information on technology-driven innovation and growth. Being at the heart of technology innovation will help sharpen business instincts and identify opportunities. Be prepared to fail Successful venture capitalists recognise that not every investment they make will pay off; some may even fail. However, this does not deter them from taking on new investments as part of a risk portfolio. CIOs that want to grow the business through innovation must

adopt a similar mentality, within the constraints of their organisations. Reporting to senior business leaders and peers on net business value is one strategy that may help clarify the overall contribution of investments to business value. Don’t forget business as usual CIOs should not lose sight of keeping the lights on. The majority of the CIO investment portfolio is likely to remain business-as-usual IT services, and outcomes on those investments should not be compromised by innovating for business growth.

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Liz BrownPartner Risk Services, [email protected]

Steve HallanPartner Consulting, [email protected]


Insights

33

Hot topic – analytics: key findings

Businesses globally are using increasing volumes of data for analytics purposes, and 74% of survey respondents already use analytics to support their business strategy.

The rise in the number of chief data officers globally may indicate a trend towards specialisation in this area, but CIOs need to at least recognise and understand the impact of this technology.

Almost half of global CIOs are piloting, implementing and adopting analytics programs, up considerably from last year. The trend is further evidenced by CIOs – both globally and in Australia – selecting analytics as their preferred area of investment if additional budgets were available to them (30% and 29% respectively).

Slow to adopt analytics strategiesAustralian businesses have been relatively slow to adopt company-wide analytics strategies. However, given the rapid rise in the amount of data collected, this situation is changing. 61% of Australian CIOs now use analytics to support their business, compared with 74% of global CIOs.

Local CIOs are more than aware of the benefits that strategic and tactical analytics can provide through the greater dissemination of information. While tactical analytics programs for things such as budgeting have been around for a while, strategically implementing data analytics to act on crucial customer data can provide businesses with a crucial advantage on their

less responsive competitors. Additionally, analytics can create an effective link between internal and external data sources.

This is where CIOs need to build their relationships with other executives in IT-related roles – particularly the chief data and chief digital officers, if those roles exist within their organisations. Together, these roles can implement a strategy that effectively centralises all data in one state-of-the-art system. In many Australian businesses, there is still a large volume of information held in legacy systems made up of incompatible platforms.

Talent shortage hinders analytics uptakeIn Australia, the biggest hindrances to a wider uptake of analytics are budgetary restraints, the lack of a centralised approach to collating information and, perhaps most importantly, a chronic shortage of talent, which was also cited in the global survey. To address this, Australian universities are offering more analytics-based courses and opportunities to cross-pollinate skills between various technical specialists.

This is another area where CIOs can add value, by integrating the knowledge of data scientists who don’t understand business with the best business insights. Finding the intersection of skills within organisations is where CIOs can derive real business value from data analytics.

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Key findings

34

Analytics and business strategy: To what extent do your analytics capabilities support your strategy?*

Executive sponsors for analytics

26%

Analytics supports our business strategy

*of respondents who are piloting, implementing or have adopted analytics/big data

Analytics are not used widely in our organisation or are done so in a tactical way, but not aligned to our strategy74%

No single sponsor



Chief information officer

Chief marketing officer

Chief analytics officer

Chief product officer

Chief data officer


Not defined/dont know

59%

28%

21%

16%

12%

6%

9%

2%

2%

1%

1%

20%

Hindrances: What is holding back the morewidespread use of analytics in your organisation?

We lack thecorrect talentto use our data

There is no centralised approach to capturing and analysing data

#1 #2

Deliver thetechnology

Develop the insight

CIO’s role in analytics: How is your role in deliveringanalytics capabilities defined?

Hot topic – analytics: infographic

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Global

Infographic

35




24%


No single sponsor







Chief data officer



60%

27%

21%

18%

12%

5%

7%

6%

3%

1%

1%

18%


#1#2




Develop the insight




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FSI

Infographic

36




No single sponsor







Chief data officer



59%

26%

24%

17%

11%

7%

9%

1%

1%

1%

1%

22%


#1 #2


Budget limitations


Develop the insight


27%




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Private Sector

Infographic

37



22%

Analytics are not used widely in our organisation or are done so in a tactical way, but not aligned to our strategy


No single sponsor







Chief data officer



Develop the insight

60%

35%

13%

11%

14%

5%

14%

2%

3%

4%

0%

15%


#1 #2




78%




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Public Sector

Infographic

38



39%




No single sponsor





Chief data officer


67%

40%

25%

8%

15%

2%

4%

6%

17%


Budget limitations

There is no centralisedapproach to capturingand analysing data

We lack the correcttalent to use our data

#1 #2


Develop the insight



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Australia

Infographic

39

Tim NugentPartner Consulting, [email protected]

David HobbisPartner Risk Services, [email protected]

Hot topic – analytics: insights

Insights

Grab the opportunity

Organisations are awash with data, but many still make critical decisions based on instinct and expert opinion. The challenge is to marshal, analyse and interpret data and to apply the results to the decision-making process. There is an opportunity for CIOs to take control and build a more streamlined information framework. Align interests of stakeholders

CIOs are uniquely positioned to act as central hubs in aligning analytics strategy with the business. Lack of a coherent approach to analytics isn’t a data or a technology issue; it’s a strategic, people and process issue, and CIOs manage a diverse set of stakeholders and are therefore well-positioned to bring together diverse actors to generate optimal solutions. Find a sponsor CIOs need to establish a vision for realising analytics at the heart of their organisations, based on an illustration of how value may be generated. Executive-level sponsorship and an achievable roadmap will provide short-term, targeted insight and support long-term transformation.

Invest in “purple people”

In the world of analytics, data technologists are denoted by the colour red and business functions by blue. Staff members who are a blend of both are “purple people”, and they are critical to the success of analytics, which requires a dual understanding of technology and business strategy. Business processes constantly evolve and “purple people” are equipped to help organisations adopt analytics to respond to change. Organisations must identify and invest in these types of people to succeed in analytics.

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40

Regional variations

Africa Asia Canada Central Europe

Southern Europe

Western EuropeMiddle East Northern

Europe OceaniaLatinAmerica

Click on region tabs below to reveal data

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41

Regional variations

AfricaMore likely to…• have seen an increase in their

IT budgetLeast likely to…• use analytics widely in their

organisations• have embedded innovation in

their IT function• actively evaluate the performance

of their technology portfolio in terms of value, risk & reward

Africa Asia Canada Middle East Northern Europe Oceania Southern

EuropeWestern Europe

Central Europe

LatinAmerica


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Africa

42

Regional variations

AsiaMore likely to…• have formalised approaches for

innovation initiativesLeast likely to…• have adopted analytics, big

data and social media in their organisations

Africa Asia Canada Southern Europe

Western Europe

Central Europe Middle East Northern



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Asia

43

Regional variations

CanadaMore likely to…• consider themselves as ‘intuitive’

CIOs• have a clear line of sight across

all the portfolio of IT projects & programmes

• have adopted or are implementing private cloud solutions

Least likely to…• actively evaluate the performance

of their technology portfolio in terms of value, risk & reward


Western Europe




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CIO pulse


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Canada

44

Regional variations

Central EuropeMore likely to…• consider themselves as ‘risk

averse’ CIOs• encounter lack of appropriate

risk models towards growth & innovation

Least likely to…• have adopted analytics


Western Europe




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Central Europe

45

Regional variations

Latin AmericaMore likely to…• have transformed IT from cost

centre to profit centre• believe that, although analytics

support their strategy, provide no competitive advantage

• focus on strengthening risk and security management

Least likely to…• encounter privacy issues

hindering the more widespread use of analytics


Western Europe




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Latin America

46

Regional variations

Middle EastMore likely to…• focus on developing IT staff• have a clear line of sight across

all the portfolio of IT projects & programmes

• rate ‘enhancing the customer experience through technology’ as one of the most important dimensions of their work

Least likely to…• consider themselves as ‘risk

tolerant’ CIOs


Western Europe




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Middle East

47

Regional variations

Northern EuropeMore likely to…• consider themselves as ‘risk

tolerant’ CIOs• have transformed IT from cost

centre to profit centre• have seen an increase in their

IT budgetLeast likely to…• lack proper technology and

infrastructure to capture the data to deliver analytics


Western Europe




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Northern Europe

48

Regional variations


Western Europe

Central Europe

OceaniaMore likely to…• have adopted or implementing

mobile apps, private cloud solutions and social media

Least likely to…• focus on strengthening risk and

security management

Middle East Northern Europe OceaniaLatin

America


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Oceania

49

Regional variations

Southern EuropeMore likely to…• encounter lack of appropriate

risk models towards growth & innovation

• consider transforming IT from a cost centre to a profit centre as one of the most important dimensions of their work

Least likely to…• believe that analytics and big

data provide a competitive advantage


Western Europe




Introduction

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Southern Europe

50

Regional variations

Western EuropeMore likely to…• have adopted, implementing or

piloting analytics• rate ‘enhancing the customer

experience through technology’ as an important dimension of their work

• have adopted BYODLeast likely to…• consider innovation as a top

priority for the IT function


Western Europe




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Western Europe

51


Job title

Regions

Reporting to

PrivateSector

FinancialServices

PublicSector

65%

20%

16%

CIOHEAD OF IT/IT DIRECTOR OTHER

50% 28%

65%

20%

16%

10-100m

14%

100m-1bn

26%

1bn-10bn

18%

10bn-100bn

15%

<10m

14%>100bn

13%

22% COO

CFO

CEO

BOAR

D O

F D

IREC

TORS

OTH

ER

35% 22% 11% 24%8%

17%

1%

15%

5%Central Europe

Asia

Northern Europe

32%Western Europe

SouthernEurope 8%

Oceana

4%MiddleEast

4%Canada

1%Africa

13%South America

Number of full-time employees (%)IndustryCompany revenue

1-1,999 2,000-3,999 4,000-5,999

6,000-7,999 8,000-9,999

10,000-19,999 20,000+

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52

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Documents

Deloitte Australia CIO Survey 2014 CIOs: At the Tech-junction...communicating – business value; and aligning talent with the business mission. VCs operate in a high-stakes environment