Security at the top of the CIO agenda
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Security at the top of the CIO agenda

Jim Mortleman — June 2018
The annual Harvey Nash survey reveals IT leaders are focused on security but feeling unenthused by the performance of their digital strategies.

Cybersecurity is racing up organizations’ list of IT priorities, according to the latest annual research by recruitment giant Harvey Nash and KPMG. The CIO Survey 2018, which interviewed almost 4,000 global IT leaders in the first quarter of this year, found almost half of organizations (49%) now consider it a key priority, a jump of 23% compared to last year.

This is not surprising given the past year’s geopolitical tensions and high-profile cyber-attacks, the report notes, but fortunately it seems IT leaders are also confident their boards are behind them and they are able to implement effective defenses. More than two-thirds (68%) believe their executive is giving them the necessary support and the vast majority (86%) believe they are either ‘very well prepared’ (22%) or ‘quite well prepared’ (64%) to identify and deal with any attacks.

Harvey nash 17 Graph 3

The second-fastest growing priority for CIOs this year is the connected issue of managing operational risk and compliance, cited as key by 38% of respondents (up 12% from last year). Much of this rise can probably be accounted for by the increased public focus on data protection in the wake of high-profile breaches and stories such as the Cambridge Analytica scandal, as well as recent preparations for the EU GDPR.
Digital drives priorities

But although security and compliance were the fastest-growing concerns, CIOs’ top strategic priorities are largely being driven by the need to become more efficient and competitive in the wake of ongoing digital transformation. ‘Improving business processes’ was listed by 5% more respondents than last year, which pushed it up to the position of joint top priority alongside ‘increasing operational efficiencies’ (no change) and ‘delivering consistent and stable IT performance to the business’ (down 2%).

There is also evidence to suggest that as organizations progress along their digital journey, and gain the ability to innovate more effectively, so exploiting this ability rises to the top of their priority list. Among those companies that considered themselves particularly effective at using digital technologies and/or creating compelling customer experiences, ‘developing innovative new products and services’ was cited as the top priority (among total respondents, this was only ranked sixth). “The most influential and successful CIOs are focusing on revenue creation much more than any other priority,” the report notes.

That said, there are signs the path to becoming a digitally transformed, customer-centric organization isn’t as smooth as many would like. Almost eight out of 10 CIOs (78%) say their digital strategy is only moderately effective or worse, and over a third (35%) of firms can’t find or develop people with the necessary digital skills. In addition, only around a quarter of companies seem to be creating engaging customer experiences (according to how they rate themselves in terms of five key competencies).

Harvey nash 17 Graph 3

‘Big bang’ projects go pop

One interesting finding is that fewer companies than last year are pursuing enterprise-wide digital strategies (32%). The reasons for this are unclear, but it could reflect the more general move away from large-scale, centralized IT. As one CIO quoted in the report says: “There is an industry-wide shift towards agile operating models and ways of working, designed to make technology and the business one and the same. Multi-year IT projects that take years to deliver any value are dead.”

This seems to be borne out by some of the other survey data. For example, the growth of outsourcing has slowed dramatically (just 32% plan to increase spending on outsourced services, the lowest proportion since the financial crisis of 2008), while the use of cloud services and shadow IT continues to grow – two-thirds (67%) of all respondents said a proportion of their IT spend (from 5% to more than half) is now managed outside their department. 

But the good news is IT budgets and headcounts are also on the rise, with around half of CIOs noting increases in both – the highest proportion in the survey’s 20-year history. This likely reflects a growing recognition of IT’s critical importance to business success not just in terms of keeping systems protected and working, but of building and exploiting the digital frameworks that will be necessary to innovate and become more competitive.

Harvey nash 17 Graph 3

CIO influence unlikely to wane

In terms of the changing role of the CIO, on the surface it seems there is a slight levelling off in the CIO’s influence, with 8% fewer than last year reporting that their influence is growing. It could be a reflection that some organizations are spinning off some CIO responsibilities to other senior IT roles – security to the CISO, digital to the CDO, etc. Nonetheless, the CIOs’ strategic influence remains high. “Successful CIOs are swapping control for influence and finding new ways to navigate through an uncertain environment. Many are taking an active role in embracing shadow IT, leading it out into the ‘light’ of active governance and support,” says the report.

The role of the chief digital officer (CDO) is also growing in stature, with more than half of all respondents having a dedicated or acting CDO, and an even higher proportion among firms that consider themselves very effective at digital. In the majority of cases, though, the acting CDO is the CIO. “CIOs serving as CDOs dwarf the number of dedicated CDOs by over two to one,” the report notes. Nonetheless, making the distinction clear (even if both roles are being performed by the same person) seems to improve a company’s digital effectiveness.

And it is the digitally effective, customer-centric organizations that clearly stand out in this survey. As well as being more focused on innovation, customer-centric organizations are 38% more likely to report greater profitability than those that are not. That, if nothing else should keep the rump of organizations still struggling to attain digital nirvana firmly focused on their end goal.
First published June 2018
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