Deloitte Global CIO Survey: 78 Percent of CIOs Say Aligning to Business Strategy is Essential to Their Success; 57 Percent Pick Customers as the Top Business Priority

The survey results also show that three-quarters of CIOs say aligning IT to business strategy and performance goals is the top IT capability essential to success. CIOs overwhelmingly chose strategic alignment as the top IT capability essential to their successes, followed by execution of technology projects coming in second at 55 percent, and vision and strategy third (nearly 50 percent).

Additionally, this year's survey found substantial gaps exist between business expectations and IT capabilities, in key areas including innovation and cybersecurity. Fifty-seven percent of CIOs report that the business expects them to assist in business innovation and developing new products and services, but over half state that innovation and disruption priorities currently do not exist or are in the process of being built. Similarly, 61 percent identify cybersecurity as a core expectation, but only 10 percent of CIOs report cybersecurity and IT risk management are a top business priority.

Another finding: In the face of evolving business expectations, CIOs must be able to shift between three pattern types to be effective and create value. They are: "trusted operators," who ensure operational excellence; "change instigators," who enable large business transformations; and "business co-creators." The survey found that 55 percent of CIOs report their current type as trusted operator and 34 percent as business co-creator, but 66 percent of all CIOs surveyed say their ideal state is business co-creator.

"CIOs create value by delivering capabilities that are in tune with business priorities. Rapidly shifting business priorities mean that CIOs can't afford to just react to business needs; they need to develop the business acumen to anticipate and pre-empt future business needs," said Khalid Kark, managing director, Deloitte LLP, and director of research for Deloitte's CIO Program. "While business leaders are increasingly focused on the 'front' end of digital – customer engagement – it is extremely important for CIOs to look beyond the customer to drive business value. Of course they need to connect a plethora of back-end legacy systems, processes and data with front-end customer-facing tools – but they also have a huge opportunity to harness emerging technologies. We are already starting to see technologies like cognitive computing, Internet of Things and additive manufacturing reshaping existing business models and creating new businesses opportunities and markets."

IT capabilities, business expectations of IT, and business priorities out of sync
The survey found that there are significant gaps between how CIOs perceive they are delivering value to the business and the business's stated priorities and expectations.

In addition to the reported gaps in innovation, disruption and cyber security, other gaps between business priorities and IT capabilities center on components the market considers core to "digital" —specifically, customer focus and technology-enabled business growth:

• Seventy percent of surveyed CIOs said they are expected to lower cost of operations while improving service levels to drive business performance, but only 27 percent of CIOs identified delivering complex technology projects as an important skill.
• Sixty-seven percent of CIOs reported that the business leaders expect them to reduce IT costs and drive efficiency, while 66 percent stated they are also expected to maintain the same or better availability and performance of IT systems.
• Forty-seven percent of CIOs recognized IT capabilities around disruption and innovation as essential to their success, but 52 percent said these capabilities does not exist or is currently being built, while only 21 percent chose 'understanding of markets and disruptive business forces' as a current strength.

"The survey shows that non-CIO leaders are often focused on some aspect of what we call the digital 'iceberg:' the CMO centers on the customer, the chief operating officer may center on IoT or supply chain, while the chief financial officer perhaps focuses on analytics. What many business leaders currently regard as 'digital' is predominantly the part of the iceberg that shows above the water. Legacy systems, rigid organizational structure, and antiquated processes encumbering the shift to digital often lies below," said Mark White, principal, innovation office chief technologist, Deloitte Consulting LLP. "The CIO is well positioned to influence and support the whole 'digital iceberg' and to help create the right strategy, platforms, and services to realize the holistic digital enterprise."

"In the midst of digital disruption, I see a tectonic shift in the importance of technology to the business value proposition. Timely and effective access to data is no longer about IT – it is central to the business agenda," explained Vittorio Cretella, CIO, Mars Inc. "As a result, CIOs need to be strategic co-pilots, shaping business plans alongside their peers to ensure success."

Keys to CIO success

This year's survey also found that CIO personalities are fairly similar. Seventy-five percent of CIOs share the top seven CIO personality traits/working styles. These include adapting easily to new environments (90 percent), focusing on the objective rather than the emotion when working with others (81 percent), being early technology adopters (81 percent), taking charge (78 percent), thinking big picture (76 percent), tolerating confrontation (75 percent) and tolerating risk (75 percent). Because a strong majority of CIOs share similar personality traits and working styles, the findings suggest a CIO's "nature" – his or her inherent personality and work-style attributes – does not determine a CIO's ability to create value. Instead, CIOs can position themselves for success by building IT capabilities and skills within their organization in response to changing business needs. 

"Successful CIOs have the ability to adjust their personal style based on context, and be versatile in adapting to the needs of the moment," said Karen Mazer, principal and U.S. CIO Program executive sponsor, Deloitte Consulting LLP. "Being able to understand and assess themselves and their teams in the context of driving business value will allow them to better respond to changing business needs."

The survey also indicates there are areas of opportunity related to CIO and development of necessary skills. When asked to assess their leadership competencies – the specific skills the CIO personally brings to the table to successfully cultivate IT capabilities – in comparison to what a technology leader ideally needs to succeed in the role, gaps were exhibited in several areas. The most significant gaps were found in influencing internal stakeholders (64 percent said it was an ideal characteristic, but only 47 percent identified it as a current strength), attracting and retaining talent (48 percent ideal versus 35 percent current), and steering technology vision (71 percent ideal versus 61 percent current).

Additional findings of the survey include:

• Eighty-two percent of CIOs say spend in legacy systems and core modernization will increase or hold steady over the next two years, signaling the enormous back-end transformation underway to support the front-end customer demands
• Sixty-four percent of CIOs expect technology spend in cybersecurity will increase over the next two years, but only 37 percent picked cybersecurity as an IT capability key to their success.
• CIOs report strongest relationships with CEOs and CFOs (62 percent each). Thirty-five percent of respondents said they report to the CEO and 20 percent to the CFO.

The Deloitte CIO Program bolsters the value CIOs deliver as they advance along their career journeys. Through personalized lab experiences, leadership development and career connection opportunities, targeted networking, and distinctive research and insights, Deloitte empowers, informs and connects IT leaders in order to tackle what's next, now. To read the full report, executive summary, or to find out more about Deloitte's CIO Program, please visit: http://www.deloitte.com/us/cio.

About Deloitte's Global CIO Survey
This research was conducted during May–September 2016 across 48 countries with an aim to better understand the impact and the legacy of the CIO role. The research was conducted through in-depth interviews and online surveys. Globally, 1,217 technology leaders participated in this research across 23 industry segments. Deloitte used clustering analysis to segment the respondent population into three patterns and explored the navigation between pattern types based on business need and specific triggers for change.

About Deloitte
Deloitte provides industry-leading audit, consulting, tax and advisory services to many of the world's most admired brands, including 80 percent of the Fortune 500. Our people work across more than 20 industry sectors to deliver measurable and lasting results that help reinforce public trust in our capital markets, inspire clients to make their most challenging business decisions with confidence, and help lead the way toward a stronger economy and a healthy society. For more information, visit Deloitte's U.S. website at: http://www2.deloitte.com/us/en.html.

As used in this document, "Deloitte" means Deloitte LLP and its subsidiaries. Please see www.deloitte.com/U.S./about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries. Certain services may not be available to attest clients under the rules and regulations of public accounting.

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