What Keeps The CIO Under Pressure?
While more CXOs are acknowledging the growing importance of IT in their businesses, their level of dissatisfaction is also going up when it comes to measuring their IT performance and effectiveness, says a recent McKinsey Global Survey results. Researchers and co-authors of the report, Naufal Khan and Johnson Sikes observe that CIOs see IT as core and relevant to day-to-day business, not merely a cost center, the most substantial challenges are demonstrating effective leadership and finding, developing, and retaining IT talent.
The report also notes that CIOs are more dissatisfied with their IT performance than they were 2-3 years ago,as IT moves from core transactional applications and rely on cloud computing technologies, analytics and mobile innovation, where CIOs feel they are not only under immense pressure, but also have a lack of business ownership.
A growing dissatisfaction
Despite the increasing investments, overall satisfaction with IT among CIOs is low. Many of them believe that IT has become less effective at enabling business goals.
Only 13% of CIOs are highly effective at introducing new technologies faster or more effectively than competitors in 2013, down from 22% percent in 2012. These results likely reflect the overall rising expectations for corporate IT while at the same time, increased use of cloud and mobile applications that are readily available outside the business are enabling CIOs to report declining performance from their own function.
Struggling with talent
One of the key reasons for increasing pressure and dissatisfaction among CIOs is that they are not able to create, develop and retain talents who can address the rapidly evolving technology landscape and bring business value. moreover, IT leaders cite that they are more concerned about this than their business peers and do not get much of the top management support on this issue. For example, the McKinsey report suggests that CIOs spend an average of only 8% of their time developing talent, an area where IT organizations have a clear need to improve.
There is a lack of formal processes to govern IT talent and skills management. Just 23% of executives report the consistent use of processes to manage talent, the lowest share across all of the governance processes. areas that need further grooming of IT talent are in analytics, joint business and IT expertise, and mobile and online skills on a broader level.
The authors state that to address talent challenges, companies should focus on culture and compensation.
Lack of business ownership
Beyond these IT-specific challenges, CIOs identify some other areas for improvement on the business side. When asked how their companies carry out application development and maintenance projects, IT executives say their organizations tend to follow a traditional “waterfall” approach to their work on legacy systems and a more interactive, iterative approach for new development work. Further, these respondents indicate a desire to increase the share of work they do using iterative approaches but identify barriers to this change. The top barrier cited is a lack of business ownership, followed closely by managers lacking an understanding of when to use an iterative approach.
The authors have stated certain recommendations to reduce the pressure and dissatisfaction of the IT in an organization. These include:
Address talent from the top: As finding and retaining staff becomes ever-challenging, especially in areas such as analytics and next-generation infrastructure, the authors suggest that companies could better meet these needs with a more attractive talent value proposition that spans culture and morale, compensation, and career development—issues requiring focused attention from IT leadership. CIOs must be more involved in developing a talent-friendly culture within their organizations to tackle current and future talent issues.
Increase business-side involvement: All CXOs must work to address critical gaps in IT by elevating knowledge in areas that span both the business and IT functions. The authors note three important areas for improvement: data and analytics, business-IT interactions, and approaches to development work.
Balance competing demands: CIOs must find a way to fulfill roles that may be at odds with each other—managing the IT function while also leading technology-driven changes. To that end, increased use of approaches (such as iterative development processes) that can help them meet both mandates and manage two-speed IT organizations will become ever more important.
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