By Aimee Chanthadavong

Businesses are waking up to the digital age with the latest Deloitte CIO Survey revealing 80 per cent of businesses have either increased or kept their IT budgets the same this year.

Driving digital strategy through new technologies and trends such as mobile, cloud, social media and analytics, is seen as the next highest priority by over 50 per cent of respondents.

The 2013 global survey gathered responses from over 700 CIOs and senior IT leaders across 36 countries, including Australia where almost 30 CIOs participated.

“It seems as if IT budget cuts are largely behind us, with companies investing more in IT, innovation and key areas such as digital,” said Deloitte Consulting Technology partner and leader of the CIO program Kurt Proctor-Parker.

“Forty per cent of the Australian CIOs reported that they had not experienced any movement in their budgets over the past year and their current IT priorities are around strengthening risk and security and developing IT staff and skills.”

At a time when business transformation is a top priority for organisations, it is positive the majority (75 per cent) of CIOs understand how IT functions could support their organisation’s innovation strategies. This increased focus on digital and new business requirements places a greater demand on the IT department to be a centre of innovation. However, challenges remain as only 35 per cent of respondents believe their IT function is considered a credible hub of innovation by the business.

“Business transformation today is both fundamentally driven by and reliant upon the fast changing world of technology,” Proctor-Parker said.

“It is therefore no surprise that the CIO’s role will be transformed over the next few years into a more strategic advisory role, especially in terms of developing and delivering business strategy. Some IT leaders are already playing a far stronger role at executive level; this is underpinned by the finding that over a third of CIOs consider their next role to be that of COO or CEO.”

The survey also details how it is up to the Information, Communications and Technology (ICT) industries to weigh up the unique strengths and capabilities of each business, and consider where the opportunities lie so they can refocus their investment dollars on the global growth sectors.
“The low risk way to do this is to reallocate resources and people,” Proctor-Parker said.

“The ICT industry is in fact best placed of all industries to embrace the flexibility of digital, to undertake the transformation programs around areas of innovation, to move the best performers to the newer parts of the business that promise growth. Flexibility, transformation and digital is the coding of the ICT sector.”

The study also showed there is a disconnect between what technology leaders believe they can achieve through IT and innovation – and how they think the business views their capability to do this. As a result, many IT functions are still struggling to partner with the business, with over 60 per cent of global respondents rating their business partnering capabilities as either “fair” or “poor”.

In Australia it appears CIOs require help with business partnerships, either because the business does not understand what they do or because they do not understand what the business wants from them.

According to Proctor-Parker, for this reason, developing and implementing a dedicated business partnering function should be a top priority.

“We are confident there are many untapped opportunities lying ahead for the CIO,” he said.

“They have never played a more prominent role in the boardroom, nor have they had more opportunities to get closer to the business strategy than they have now.

“While we still have some way to go, especially in terms of improving the IT business relationship, the perception of IT is changing as more organisations realise the strategic importance of this function. This is a positive move in the right direction.”

This relates to the next big challenge identified in the survey; a shortage of good talent, as CIOs struggle to find the right blend of technology expertise and business skills to support business demands. This is directly linked to IT business partnering barriers, as this process requires people who not only have the technological skills, but can also think strategically and communicate effectively.

“It is crucial CIOs use their secured seat at the boardroom table well. They need a strong working knowledge of their organisation’s goals and objectives and are also able to articulate the role technology can play in achieving them,” Proctor-Parker said.