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DRIVING DIGITAL TRANSFORMATION IN 2017

The role of the CIO has never been more challenging. Operational responsibilities, budget pressures, customer expectations, and the demands of the business have combined to create a unique landscape for the CIO to navigate.

CIOs must adapt not only to rapid technological developments and employee demands, but the imminent arrival of the app generation – those who have never known a world without a smartphone – bringing a new set of expectations.

According to Gartner, “thanks to digital, CIOs have an unprecedented opportunity to transform themselves and their departments, and become a key voice at the executive table and boardroom.” 1

This CIO Outlook report draws on new global research with insight from 292 CIOs, commissioned by Fuze, to explore the current challenges and strategies of today’s IT business leaders.

What did the findings show? CIOs want to champion digital transformation and innovation, and they have the vision and progressive approach to make it happen.

1 Gartner “New CIO Responsibilities in a Digital Business World”, John MacDorman, Dave Aron, 15 November 2016

From custodian to champion

FAST FACTS
8%

the average percentage of an organization’s domestic annual revenue that is spent annually on IT

12%

the average percentage of the IT budget that CIOs are expected to save over the next five years

13%

the average percentage of IT budgets that is spent on implementing and maintaining communications infrastructure and applications

For CIOs, the pressure to do more with less has never been higher. An overwhelming 91 percent are under pressure to reduce expenditure, and IT departments are spending most of their time simply ‘keeping the lights on’.

IT complexity is a time drain for businesses

IT departments currently spend 83 percent of their time managing IT & communications platforms and resolving user issues, with only 11 percent of their time set aside for planning future innovation.

Yet this is not where CIOs want to focus. A significant 61 percent say senior executives place too much emphasis on cost reduction and 58 percent say they can’t focus on innovation due to other pressures.

How the board views the success of the CIO’s team reflects this ‘operational’ focus, with the primary measure being system and application downtime. But most CIOs want to be measured on innovating the IT department and their ability to shift the emphasis from cost reduction to revenue generation.

The fact is that CIOs want to champion change and take a proactive role in modernizing the enterprise. And there’s a clear belief that IT’s role is fundamental in driving digital transformation.

80%

of CIOs say IT’s ability to innovate is critical to business success

80%

of CIOs say IT can drive business success

92%

want to lead digital transformation

93%

want to champion innovation

91%

want to drive business growth

Heads in the cloud

By the end of 2017, an overwhelming 96 percent of CIOs will have a formal cloud strategy in place.

Maturity levels in cloud strategY

29%

have implemented a formal cloud strategy across the whole organization

33%

have implemented a formal cloud strategy across part of the organization

22%

are in the process of implementing a formal cloud strategy

12%

will implement a cloud strategy in 2017

4%

not planning a formal cloud strategy/don’t know

These cloud maturity levels largely correlate with the presence of an internal advocate for these initiatives. By the end of 2017, 86 percent of enterprises will have a cloud champion who is responsible for driving the cloud strategy.

When formal cloud champions were introduced

More than three years

31%

For one to three years

25%

Within the last year

19%

Plan to in 2017

16%

Plan to in one to three years

4%

No plans for a cloud champion

0%

Communications complexities

It’s no surprise that when it comes to communications, application sprawl is rife in today’s enterprises. CIOs are reporting use of multiple applications for voice and video conferencing, messaging, and screen sharing – and that’s not including those that workers are using without the knowledge or permission of the IT department.

CIOs report a minimum of three communications tools across different categories.

Application sprawl

  • 3voice conferencing applications
  • 3voice conference applications with screen sharing
  • 3video calling
  • 3screen sharing (no voice)
  • 3office collaboration (share files etc.)
  • 4instant messaging
  • 3group messaging

What concerns CIOs about communications infrastructure and applications

87%

the time it takes to manage and maintain

85%

training users on new technologies

86%

the cost of maintaining and managing on-premise equipment and applications

82%

the complexity

80%

providing ongoing support to employees

For the majority (67 percent), reducing the number of communication applications in the next 12 months is important, yet 60 percent also say that investing in new communications technologies is a priority. While CIOs want to reduce their spend on communications infrastructure by around 15 percent, the key drivers to justify additional investment in new communication approaches lie in improving the communication experience, particularly with those CIOs who identify as progressive and innovative.

Top three drivers for adopting new communication technologies

54%

Improving the customer experience

47%

Improving enterprise communication

43%

Reducing operating
costs

Preparing for the app generation

54%

say they will present issues as they are not used to certain technologies

47%

say additional training will be required on older IT systems

81%

say they will fuel adoption as IT refreshes and updates tech approaches

72%

say there will be more emphasis on innovation due to younger employees

Changing for the Future

As the app generation enters the workplace, it will bring a new set of expectations and challenges to today’s IT environments. According to a recent Gartner survey, nearly eight in 10 people believe that the skills and knowledge their organizations have in 10 years will bear little resemblance to the skills and knowledge they have today2. While this poses a significant risk to businesses that are ill-prepared for the new generation, it does provide CIOs with the perfect opportunity to convince their organizations of the need to upgrade now.

Catering to the expectations of the app generation will not only benefit the latest employees, but will also provide a springboard upon which businesses can launch their wider digital transformation strategies. By taking control of their domain and driving innovation, CIOs can be the positive catalyst for change within their businesses, helping to move their companies forward.

2 Smarter with Gartner “Analyst Answers: The CIO’s Biggest Digital Transformation Challenges”, Chris Howard, Diane Morello, Bard Papegaaij, Donna Fitzgerald, 23 September 2016.

Methodology

Fuze commissioned research with 292 corporate CIOs working in organizations of 500+ employees in North America, Australia, and Europe, with an average annual revenue of USD $1.7 billion. The survey was carried out by Vanson Bourne using online and telephone interviews in December 2016.

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