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The State of the CIO 2015: The digital mindshift

The State of the CIO 2015: The digital mindshift

Our annual research shows how New Zealand CIOs are playing critical roles as organisations evolve and reinvent themselves in the fast-changing world.

When Dhaya Sivakumar became CIO of Paymark, New Zealand’s largest payment network two years ago, he looked at every dimension of the technology team – including its budget and infrastructure – and asked, “Why do we do the way we do?”

“In any CIO role now, part of the challenge is to change what we have and not accept the status quo,” explains Sivakumar.

“The best way of disrupting is to figure out how to disrupt yourself,” he states. “How can we disintermediate ourselves or displace ourselves?”

“Everyone has done a great job in the past, this is how things work and we are very reliable. But continuing to do that is not going shift us. So we are asking all the team to step up.”

Today, with the support of a “transformative” CEO, Mark Rushworth, the company is “going on a journey beyond a utility switch provider and into a payment solutions provider", he says.

“The basic fact is Eftpos reigns supreme at the moment, but in 10 years' time, people will [also] be paying via mobile, P2P [person to person] or whatever new technology is going to make life easier for them.”

Read more: CIOs unprepared for the ‘digital dragon’

Part of the challenge is to change what we have and not accept the status quo.

Dhaya Sivakumar, Paymark

Thus, a recent Paymark project with Xero, for instance, aims to allow electronic receipts (eReceipts) to flow directly into the cloud-based accounting software.

Paymark illustrates how today’s organisations – along with their ICT teams – are working through the rapid pace of change impacting all industries.

His insights highlight a key finding in our annual State of the CIO report, which is the need for CIOs and other IT executives to step up and play a major role in helping their organisations radically evolve and reinvent themselves in a fast changing world.

Read more: How I became a CIO: Jason Millett and Kevin Angland share their journey

Highlights of the 2015 New Zealand State of the CIO survey

The 14th State of the CIO survey covered 558 top IT executives across the globe, including 51 from New Zealand.

Across the globe, 44 per cent of IT leaders report to the CIO, but in New Zealand, this number is lower at 31 per cent. The next most common reporting line globally is to the CFO, at 20 per cent, and 29 per cent for the New Zealand respondents. This is consistent with the figures from last year’s survey.

Globally, 64 per cent of respondents belong to the executive committee, and in New Zealand, this is 41 per cent, and 57 per cent in the Asia Pacific region.

The CIOs were asked how they spend time in their current role in four areas.

For transformational, the biggest focus for New Zealand CIOs were cultivating IT/business partnership (53 per cent compared to 43 per cent globally), leading change efforts (49 per cent compared to 42 per cent globally) and implementing new systems and architecture (49 per cent compared to 44 per cent globally).

In the functional areas, the top two focus were improving IT operations (51 per cent compared to 50 per cent globally) and cost control/expense management (43 per cent compared to 41 per cent globally).

Security management came in third, cited by 20 per cent of New Zealand respondents, and 31 per cent globally.

In the business strategy area, the biggest focus was on driving business innovation (33 per cent in New Zealand, and 29 per cent globally; and developing and refining business strategy (22 per cent in New Zealand, and 24 per cent globally).

Respondents were asked where they would like to spend more time on in the next three to five years in the areas of business strategy, transformation and function. The top responses, respectively, in these three areas were: driving business innovation (61 per cent compared to 55 per cent globally), redesigning business processes (41 per cent compared to 31 per cent globally), and improving IT operations/systems performance (24 per cent compared to 20 per cent globally).

New Zealand respondents said mobile technologies, application modernisation, customer experience technologies, big data and cloud services are the top five technology initiatives that will drive most IT investments.

Business initiatives that will drive the most significant IT investments for New Zealand are increasing productivity, optimising business processes, introducing new/improved products or services, improving customer acquisition and retention; and improving omni-channel orchestration of customer engagement.

More than half (56 per cent) of New Zealand respondents are expecting IT skills shortages this year, and this compares with the global figures (56 per cent) and in the Asia Pacific region (58 per cent).

Globally, big data came out as the most difficult skillset to acquire (39 per cent), but this is second in New Zealand (29 per cent). The New Zealand respondents said application development/programming will be the most difficult skill set to find. The local respondents also cited challenges in finding staff for security/risk management and enterprise architecture.

So how do their business peers perceive the IT organisation?

The highest ranking was given to service provider (37 per cent), followed by business partner (35 per cent), business leader (16 per cent) and cost centre (12 per cent).

As to where they see their personal career heading in three to five years, nearly half (45 per cent) of respondents for New Zealand and globally see themselves continuing as CIO. Following that is to be more operationally focused, like becoming a chief operations officer or running shared services; followed by working on customer facing digital strategies.

In part two of the State of the CIO 2015 report, Sivakumar and other business technology leaders talk about the changes in the remit of not only their role but also that of their teams.

Send news tips and comments to divina_paredes@idg.co.nz

Read more: Unfazed by rapid change

Follow Divina Paredes on Twitter: @divinap

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