ESADE: Growth rates higher at companies where the CIO is included at top level

According to a report by Penteo and ESADE, growth rates are higher at companies where the CIO is included in the highest decision-making bodies

Penteo and ESADE recently presented the second edition of their joint report, Information Technologies at Spanish Companies, which rigorously analyses the situation of ICT management and governance and the ICT main trends in Spanish companies in 2012.

The report describes a strong correlation between the inclusion of the chief information officer (CIO) on the management committee, on the one hand, and the company's ability to grow in times of crisis and satisfaction with IT spending, on the other. Among companies that include the CIO in the highest decision-making bodies, the percentage that are experiencing growth is twice the across-the-board average. Likewise, a company is six times more likely to be satisfied with its IT investments if its CIO sits on the management committee. The reasons are obvious: companies that keep their CIOs in the decision-making loop are more convinced of the importance of ICTs; therefore, they view investments in technology more favourably. Additionally, when the CIO is on the management committee, he or she is more involved in strategic decisions and can propose initiatives proactively and more diligently. Despite this, just 17.9% of CIOs sit on their companies' management committee, and this figure has fallen considerably over the past few years.

In the current recession, many companies have postponed investment and growth initiatives and made further budget cuts. These measures have obviously forced ICT departments to once again tighten their belts. For the report Information Technologies at Spanish Companies, over a hundred CIOs and 56 chief executives from Spanish companies were interviewed. The report examines the companies' ICT priorities in 2012 and looks at how ICT departments are dealing with budgetary constraints.

The report analyses the economic context in which the interviews were conducted and compares it with data obtained from 2010 and 2011. The top executives interviewed are shown to be pessimistic about the economy in which their companies will be competing over the next 12 months; they have therefore made IT budget cuts a priority for 2013.

The top executives were also asked about their CIOs' best contributions to the struggle against the economic crisis. The report finds that CEOs believe that their CIOs have helped increase process efficiency while containing IT costs. In other words, they have done more with less, thereby helping their companies to reduce their operating costs. Nearly twice as many CEOs as in 2011 reported that IT had helped to reduce costs. In contrast, barely any CEOs (4%) mentioned the involvement of IT in business transformation or in creating and marketing new products and services. Company leaders are generally satisfied with the performance of their IT departments during the crisis, but they view this contribution as mainly tactical.

Towards a hyperconnected world

A process of change is taking place at all levels. The ICT industry, no stranger to this period of innovation, is facing an "industrial revolution" that will affect both ICT service providers their clients' ICT departments. ICT staff at end companies will de-prioritise provision to instead focus on innovation and business co-creation.

This period of innovation is also characterised by hyperconnectivity: access to digital technology has become more democratic and the sheer volume of information – which people want to be accessible from anywhere – is multiplying at a growing pace.

The report also analyses the main technological macrotrends that have arisen from this hyperconnectivity – cloud computing, big data, "smart" everything, and mobility and user autonomy ("bring your own device") – and how these trends are disrupting both ICT departments and suppliers.

The report notes that the money previously allocated for hardware and software purchases – accounting for 60-70% of ICT budgets – can instead, in a game-changing shift, be spent on use-based cloud computing services.

Similarly, the report describes the impact of big data: the enormous growth in the volume, complexity, diversity, and speed of data, especially the proliferation of data from social networks.

"Consumerisation" is the term used in the report to describe how corporate users increasingly tend to use their own devices at work ("bring your own device"). This major trend is challenging information-system directors rethink company policies on security, integration, device maintenance, etc.

The report also touches on the "smart" everything trend, calling it one of the clearest illustrations of hyperconnectivity and one of the highest-potential areas for innovation in new business models and services.

Innovative CIOs

The report ends with an analysis of the CIO role, in particular the ways in which CIOs can transcend technology to become business leaders. The report also notes, however, that CIOs are the "technology champions" of their companies and that, especially in today's fast-changing world, they must act as technology radar, innovation generator and new-growth-opportunity detector.

This new role, "CIO 2.0", comprises traditional responsibilities in addition to the creation of new revenue streams. In short, today's CIOs must use their influence to transform their companies by means of co-creative innovation with other areas.