We are on the precipice of the fourth industrial revolution that will fundamentally alter the way all of us live, work, and relate to one another. While the first three focused on mechanising production, creating mass production and automating it, the fourth industrial revolution is building on the third – the digital revolution.
This digital revolution is characterised by a fusion of technologies that is blurring the lines between the physical, digital, and social ecosystems.
So what does that actually mean for companies?
In conjunction with Harvey Nash, KPMG conducts an annual survey of senior IT professionals globally. This year over 3,300 CIOs and IT leaders from 82 countries, who have a combined IT budget spend of US$200bn+ participated. And if there was just one message from the results from this year’s report, it is how the CIO role has fundamentally changed and what we’re asking of them to deliver to respond to this revolution.
In my regular conversations with CIOs, and if you’ve been a CIO for any length of time, the last five years have probably felt like 100 years of progress compressed into just a few.
The world has changed.
Backed by the wave of the digital revolution, and a board increasingly seeing technology as a means of protecting the business and outrunning competitors, we are seeing the evolution of a ‘Creative CIO’ at the forefront of digital change, both driving it and responding to it with new technologies, delivery models and governance approaches. They are also both a technology and business strategist, and a business model innovator. The Creative CIO can’t just ‘keep the lights on’ on anymore, they have to help the business to enable value at lightning speed.
Customer interaction and expectations of digital, cloud computing, the consumerisation of IT, and businesses’ now absolute reliance on technology has escalated the demands on nearly every CIO I speak with. Everything has to move faster, do more and happen right now. And what about all that money we’re spending on maintenance? Well, you need to cut the budget, but everything still needs to work, because we have a list of new things that need to get done – and it needs to be done yesterday, to get ready for tomorrow.
However, at the same time, the regular operational priorities still remain very significant, indeed in areas like cyber security the challenges appear to have intensified. CIOs know that no amount of outward looking is going to help them explain to the board why internally their IT infrastructure is not fit for purpose, or why their organisation’s reputation has been damaged by a cyber attack.
The skills and demands required of a Creative CIO extends to the broader technology function. The feedback I regularly hear is that CIOs are being hindered by the great technology skills shortage. Almost two-thirds of the CIOs who responded said they believe a lack of talent will prevent their organisation from keeping up with the pace of change. These gaps are with data analytics, which are the most in-demand skill and the biggest requirement in skill demand is currently digital and security. Companies are craving the newest and latest digital and IT strategy skills.
In Australia, there is clearly a maturing view of digital within organisations. Organisations are taking a more holistic view of the importance of establishing a pervasive digital-first mindset and skillset across their enterprise, but we must adapt and enhance the skills of employees in many areas and also apply a greater focus to the cultural dimension of digital transformation.
Key findings from the survey include:
- Digital has firmly found a place on the Board and C-Suite agendas: 58 percent of respondents reported that their organisation has a clear digital vision and strategy, with Board or C-Suite executives owning 36 percent of these strategies. Increasingly organisations are expecting their CIO to lead the delivery of the digital strategy.
- CIOs are struggling to free up funding to drive innovation: Only 31 percent of respondents have a formal process to allocate resources to drive technology-enabled innovation across IT and the business.
- Cloud is no longer a choice: IT is not the sole purchaser of cloud solutions and 59 percent of large organisations plan to make a ‘significant’ investment across Infrastructure, Platform and Software as a Service in the next one to three years.
- Less than a quarter of CIOs feel ‘Very well positioned’ to deal with IT security / cyber-attacks: In addition, only 40 percent of respondents cited ‘Insiders’ as a significant concern, however an increasingly higher proportions of cyber incidents are originating from within the organisation.
- CIOs must look to increase the depth of their relationships outside of their traditional ‘comfort zones’ of Finance and Operations: Only one third of CIOs reported having ‘very strong’ relationships with HR, Sales and Marketing. This can lead to a fragmented approach when implementing a digital strategy.
- Big Data continues to be a priority: But there is a clear skills gap with 39 percent of respondents suffering from a lack of skills in this area.
Looking headfirst into the industrial revolution, it is a very good, if not incredibly busy time to be a CIO, especially a creative one.
Guy Holland is Head of Digital Consulting, KPMG Australia.