Not according to a large group of recently surveyed CEOs.
Approximately 66% of surveyed CEOs and other senior executives in charge of larger companies (defined as companies with $500m or more in annual revenues) plan to increase their IT investments in 2012. The investments are targeted to enterprise technologies including cloud computing (32.3%), enterprise mobility (32%), and big data initiatives (39.3%).
The CEOs primary goal includes the desire to drive business growth despite their concerns about the ongoing global economic outlook. The survey clearly indicates their intention to invest in technology remains healthy.
These findings were aggregated from survey results published recently by Gartner in the report, CEO Survey 2012: The Year of Living Hesitantly. The survey is based on the responses of more than 220 CEOs polled in November and December 2011.
CEOs, CIOs and other C-Suite professionals continuously seek innovative ways to drive cost savings from their operating budgets. But who is leading the charge, is it the CIOs, CFOs, or CEO? The answer really depends on who you ask. In this survey CEOs were polled and many (33%) cast themselves as the primary or chief innovators within their organizations.
What has changed in the IT decision making process and innovation driving process for the CEO? Why are they suddenly now more collectively comfortable with making and more importantly driving strategic technology decisions? Is it because they are more knowledgeable about state of the art enterprise technology? Why are they no longer completely comfortable delegating or deferring to their chief technologists (CIOs and CTOs)?
In some organizations today, CEOs believe the CIO’s traditional role of IT supporter to the whole organization is insufficient in their very competitive industries. If most CIOs are seen as supporters, not drivers of innovation then the CEO feels compelled to take on the responsibility for leading the charge for innovation. The CEO is hopeful their innovation push will in turn lead to the rapid development and release of new products and services as market opportunities arise.
The fact that some CIOs today still report to the CFO or COO accounts for a big part of the explanation. The CFO’s role is typically a supporter function to the rest of the organization. The CIO reporting to the CFO is therefore an extension of this supporter role. According to Gartner, for the last decade, approximately 40% of CIOs report to the CEO, 30% to the COO, and 20% to the CFO.
Regardless of who is leading the innovation charge there is wider and broader adoption of emerging enterprise Cloud services and SaaS offerings by the C-Suite. CEOs, CFOs and CIOs are mandated by the global economic conditions to seek cloud based solutions that improve the performance of their enterprise applications so they many reduce the costs associated with running their organizations.
It has taken several years, but the economics of cloud computing are now low lying fruit for CEOs, CIOs, and CFOs to embrace. Many of the initial concerns of the CIO focused on data security, applications response time, and service availability. Now most risks associated with moving corporate data and services to an outside cloud based services provider seems to have vanished in the last IT budget cycle.
The growing usage of on-demand services continue to evolve to provide additional business and technology services and more industry specific functionality. As the product offerings mature stronger relationships between cloud service providers and buyers naturally develop. How large is this opportunity? According to a Gartner Group estimate, SaaS revenue alone is forecast to reach $14.5 billion in 2012, a 17.9% increase from 2011 revenue of $12.3 billion.
Perhaps of more interest to the CIO than the rest of the C-Suite, the Gartner survey results demonstrate a real gap and ongoing tension between what CEOs expect from their IT investments and the relatively low expectations they have for their company CIOs.
CIOs are rarely viewed as important strategic advisers and are generally not expected to become business leaders. Approximately 33% of CEOs said they were their company’s innovation leader. Only 4% cited the CIO. This news should come as a real eye opener to most CIOs.
That discovery brings a warning from Jorge Lopez, a VP and analyst at Gartner. “CEOs should re-examine the role the CIO plays today in business innovation and strategy. As the information age progresses the risk of being blindsided by new forms of digital competition is rising.”