Almost half the UK’s top CIOs claim that key skill shortages within their IT departments are hitting performance and collectively costing their organisations millions of pounds.
This is just one of the key findings of a report, ‘Supporting Business: The CIO Challenge’, commissioned by Xantus. When we talked to CIOs of large companies with a turnover £250m - £1bn, over a third told us they want more business and management skills in their department, the lack of which, they say, is costing more than 10 per cent in departmental productivity and performance.
Almost all of the rest agreed that the skills issue is affecting performance by anything up to 10 per cent, which equates to an annual organisational cost of tens of millions of pounds.
It’s not about the budget
At a time when there is increased pressure on budgets and when adding headcount or training costs is as welcome as a virus in an email, it seems the opposite is true. In almost every case, CIOs expressed a need to strengthen the business relationship and management skills of their IT staff, but they also agreed that these skills are hard to find.
Equally, the skills shortage isn’t a result of a lack of money, as almost three quarters of CIOs we spoke to believe their departmental budgets will rise over the next 12 months, and more than half expect an increase greater than 10 per cent.
Clearly ‘traditional’ IT skills - such as strategy and architecture - remain critical, but almost half (43 per cent) of respondents felt they were still hard to source. Equally, the ‘softer skills’, which place IT departments in the wider business context, showed a deficit between need and availability in every case, the most extreme being good leadership and communication skills.
For most organisations, IT is a critical part of the core infrastructure, so CIOs recognise that IT decisions are strategic for the whole business and not just their department. Critically, they need teams around them that also recognise their strategic importance and have the skills to be able to articulate and deliver this. To achieve this, the role of the CIO as leader and champion of change is paramount.
A strategic business role for IT
So when corporate attention is likely to be focused on recovery and post-slump growth, what does it take for CIOs to play a key role in this process?
1. Question the importance of CEOs and non-IT directors understanding technology
There is a big difference between designing microprocessors and designing a CRM system. CEOs do not need to know the nuts and bolts of what the IT team are doing. They do need to understand and empathise with the challenges faced by the IT team, in the same way they have to with the sales or product design teams.
Equally, the IT team needs its finger on the pulse of the whole business. A business partner role is ideal for this, but requires an individual with specific business analysis skills and a sound understanding of all aspects of the organisation.
2. Communication is key
Whilst there can be a communication issue between IT and other parts of the business, there are often similar inter-departmental communication challenges elsewhere in the organisation, either regarding the same issues or because of the company’s general approach to communication.
If a business operates globally, local culture plays an important role and this is not unique to IT. Developing clear communication structures and processes between the IT team and the commercial part of the business will help overcome communication issues and bridge gaps.
Again, a business partner can help bridge those communication gaps, as can seconding people from other areas of the business to run or work within the IT team.
3. Aligning IT strategy and business strategy
For CIOs and the IT team it is important to recognise that IT can provide a better understanding and more context around strategy so the organisation can make more effective business decisions.
In other words, treat the whole IT infrastructure as a service and focus on what makes a difference to that service, rather than simply focusing on the technology itself - even if there are some new fancy, shiny gadgets that Board members are desperate to have.
By focusing on service and developing new skills around cause and effect, CIOs can identify bottle necks and successful processes in the same way as the director of any other department in the business. An IT strategist is a key departmental resource, although individuals with both specific organisation and broader sector and supplier knowledge are difficult to find.
4. Focusing on the dichotomy between reducing cost and delivering innovation
There also appears to be an increasing focus on the gap between reducing cost and delivering innovation. Can CIOs do both or just one? Before the downturn, there were a lot of people very excited about what could be achieved with new technology. With an increasingly sharp swing towards reducing costs, there is a clear need to focus on approaches that innovate and take costs out of the business.
Xantus’ research indicates that the biggest obstacle for growth appears to be legacy hardware and systems, although for many CIOs (43 per cent) the application of new technology, such as cloud computing, will be key to overcoming these issues. A strong IT architect in the department can offer significant help to both the CIO and the rest of the business in developing this area.
5. Bridging the skills gap to make IT a trusted adviser
More CIOs are now able to articulate how IT makes a difference to the business as a whole, rather than treating it simply as a manufacturing department. However, while technically skilled individuals are fairly readily available, CIOs are finding it difficult to recruit or up-skill IT department members with the softer skills needed to help manage the broader relationship with the business.
Working with good, reliable recruitment agencies, head hunters or external consultancies can help, as well as simply ‘keeping an ear to the ground’ or networking. If CIOs already have the resource in-house, do everything possible to keep them
The bottom line
In essence, by creating a team that cannot only deliver cost-effective IT solutions, but also explain and deliver the broader benefits of IT as part an overall business strategy, IT departments can cement their position as both trusted adviser and a key business player.
In the new economic environment, organisations will be treading a careful path between managing costs and investing for growth. There is a clear role for IT teams to help define this, providing they have the skills.