While debate is ongoing on the state of the economy — on the rebound or still on cautious mode — there is no doubt enterprise ICT is still feeling, if not reeling from, the effects of the recent recession. ‘Doing more with less’ has always been a familiar theme for CIOs in New Zealand. But for CIOs in the MIS100 — the country’s top ICT-using organisations — this message was firmly embedded in their plans and strategies in the past 12 months, and for the rest of the year. Click here to see who is in the 2010 MIS100.
For the second year now, the majority of CIOs in the MIS100 have been reporting static or reduced staff numbers, while project numbers remained the same or increased, and budgets were steady or cut back.
Amidst a challenging economic backdrop, what is the working environment for the ICT teams in this year’s MIS100?
The average number of screens continues to grow annually. This year, the total number of screens for all MIS100 companies is 455,845, compared to 425,695 in 2009. These screens were managed by a total of 14,314 ICT staff.
This year, the average number of screens for those in the top 25 was 9960, a jump from 9201 in 2009. Across the board, ICT staff managed more screens, with each ICT staff member supporting an average of 32 screens, compared to 30 from the previous year.
The MIS100 has traditionally been dominated by the public sector and this year is no different, with government organisations (including educational institutions and health boards) filling more than half the ranks of the top-100 list.
This year, 22 educational- related organisations are in the list. Two of them — the University of Auckland and the University of Otago are in the top 10, taking the first and third slots respectively. Health and community services, the third largest sector, comprise 12 percent of the total. The organisations in the finance category now include Vero, which was in the ‘bubbling under’ category, or organisations just under the 100 list, in the 2009 report. Other organisations in the 2009 list of those just under the MIS100 list that made it to the 2010 report are Housing New Zealand, Television NZ, Kristin School, Bunnings, Statistics NZ and Bay of Plenty Polytechnic. Fisher & Paykel Healthcare makes it to the top-100 list for the first time this year.
Within major cities, Auckland (with 40 organisations) leads the list, as it did in 2009. This is followed by Wellington with 35 organisations. Christchurch, Dunedin and Palmerston North have been steady for the past two years with eight, four and three organisations respectively.
MIS100 tracks the reporting lines of the CIOs — and the past four surveys have confirmed a rise in the number of those reporting to the head of the organisation. This year, 43 CIOs say they report to the chief executive or managing director, a move up from 38 in 2009, and 34 in 2008. At the same time, there were 19 heads of ICT who report to the chief financial officer or the chief finance executive in the organisation, up from the previous year’s tally of 16.
In the next 12 months, the top projects CIOs and their teams will be working on are around business continuity/disaster recovery, mobility, virtualisation, business intelligence, e-business and cloud computing/software as a service.
A number of CIOs in the MIS100 reported upgrades and transformation projects. Like most ICT investments this year, upgrades often come down to boosting financial returns. Software upgrades appear to be more prevalent than hardware, however, especially as a focus on server and desktop virtualisation takes shape (See sidebar article on 'the Top 10 trends for 2010').
Social media has moved up the radar, particularly for CIOs of tertiary institutions with younger and/or tech savvy users. The next year should find more enterprise CIOs finding business uses for social media that are already part and parcel of the users’ landscape — with or without the ICT departments’ imprimatur or knowledge.
Calculating the top 100
The MIS100 is a study of New Zealand’s biggest ICT using organisations based on screen count, turnover and staff numbers. The screen number is given 50 percent of the final weighting, and turnover and employees get 25 percent each. The screen numbers include PCs, servers, laptops and hand-held devices like Blackberrys and other web-enabled PDAs. Please note, for universities and other educational institutions, the number of equivalent full-time students are added to the equation. This way, we are putting ICT in the context of the organisation and the number of people reliant on it internally.
Sidebar: Top 10 trends 2010
The business trends we have noted in our MIS100 research.
1) Recovery – the recession is on its way out
In contrast to 2009, many CIOs claim that the economic climate will have no effect this year on ICT budgets or staffing, though pressure on discretionary budgets is still evident.
Achieving key business objectives through the utilisation of ICT is paramount and, for most CIOs, this will not stop despite financial restrictions to their organisations as a whole. Achieving cost savings through ICT and reinvesting those savings back into the business has become a common way to achieve overall budget reductions, without actually reducing ICT budgets.
2) Mergers – let’s get together
Consolidation is the name of the game, particularly for public service organisations. Minimising the time gap between merger and business, as usual, will be critical in all cases. City Councils and District Health Boards (DHBs) in particular are collaborating more, with several major mergers due to be completed in 2010, most notably the merger of the Auckland Regional Council and the six Auckland councils into one new ‘super city’. DHBs, in general, are looking to save money and increase effectiveness by collaborating where possible, while Otago and Southland DHBs have merged completely.
3) Sustainability – green isn’t gone
It may only be peeping its head out of the shadows, but sustainability looks like it is coming back this year. While “green” initiatives were some of the first to go in the troubling financial environment of 2009, organisations are once again placing a focus on the way they are viewed publically in terms of the effect their practices have on the environment. Many CIOs mentioned sustainability as a business objective requiring ICT support in the coming months.
4) Compliance bites
Both private and public sector CIOs are feeling pressure from regulatory changes and compliance issues, much as they did last year. The Public Records Act, in particular, is affecting ICT budgets as formal audits are set to begin in mid-2010 by Archives New Zealand, with 40 and 50 offices undergoing audits each year from 2011. Banking institutions are facing the challenge of balancing innovation with increasing compliance regulations, placing pressure on limited resources.
5) The show must go on: Business continuity
Ensuring that business continues as usual in the event of a disruptive event is not new to the CIO’s agenda, but can be seen this year as proactive penny pinching.
Business continuity and disaster recovery seem to be garnering comprehensive attention this year, with a focus on keeping business moving ahead so that there is no downtime and resulting loss of money, should something go wrong.
6) Virtualise me
With few exceptions, virtualisation projects are on the budgets and agendas of CIOs across New Zealand for 2010. Server numbers are down again this year, with more CIOs planning to move from physical to virtual servers or to virtualise entire fleets of desktops across their organisations. Confidence in the benefits of virtualisation is evident in the data collected this year.
7) Access to information
CIOs this year show an interest in providing their stakeholders, staff and businesses with better access to information, through increased knowledge management and business intelligence. Broader focus appears to be on enhancing customer service/support, increasing security, supporting budgetary restrictions and enabling efficiency and productivity.
8) The silver lining – cloud computing stands out
The way virtualisation and unified communications before it looked set to change the ICT landscape for CIOs, cloud computing is becoming more viable among the many ICT sourcing options available, with many CIOs discussing a new focus toward the cloud as part of their upcoming project plans.
An emerging choice in 2010, cloud computing is allowing forward-thinking businesses to stabilise systems, foster greater collaboration, increase security and accessibility and save money – all at a time when ROI remains more critical than ever.
9) Help not wanted
While significantly fewer CIOs reported decreased staffing budgets this year as opposed to last year, only a marginal number mentioned recruitment as a priority.
In fact, most CIOs expect staffing budgets and numbers to stay flat in 2010, and will be tasked with completing an increased number of projects without the associated increase in staff. The economy is levelling out, but the return to skills shortages predicted in the media is still not a reality for most CIOs in the MIS100.
10) It is all up for review
A majority of the top-100 organisations this year are in the process of reviewing objectives, processes, budgets and/or systems. In every case, CIOs and their teams will be affected, and ICT engagement with business will be critical. Additionally, CIO roles and reporting structures are shifting. Jess Meyer
This overview was prepared with additional reporting from Jess Meyer, who wrote the profiles of the MIS100 organisations, and collated the top 10 trends. Sheila O’Brien (firstname.lastname@example.org), manager of Fairfax Business Research in New Zealand, provided the analysis of the MIS100 data and graphs.
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