Rise in business-led IT spend increases risks and opportunities

Issues from the IT-business disconnect

However, 43% of the CIOs polled said they are not being consulted in technology decisions led by the business. This throws up challenges, such as a limited ability to build consumer trust effectively, cited by 23% of respondents, as well as increased security risks.

But despite commanding larger budgets for technology, CIOs also seem to be losing influence, with the percentage of CIOs sitting on the board falling from 71% to 58% in two years, according to the research.

However, Bates does not think fewer CIOs sitting on the board will have a negative impact on business-led IT projects – or even IT projects in general.

“CIOs continue to exert a strong degree of influence and are being joined by a new generation of technology-savvy executives like the chief technology officer, chief digital officer and chief data officer,” he said. “As organisations mature into this new paradigm of a coalition of technology leaders, there will be more effective governance at all levels.

“We are at a moment in time where the CIO is still best positioned to advise the board and senior business leaders on technology and will increasingly have deep subject matter expertise from fellow executives to inform decision-making.”

Beyond the disconnect between business and IT, another issue highlighted by the study is the slow progress in diversity and inclusion, with 74% of IT leaders polled saying related initiatives are, at most, “moderately successful”, with only minimal growth in women on tech teams – rising to 22% this year, compared with 21% last year.

The study shows that over the past year, there has been no change in the percentage of female technology leaders at 12%.

Lack of sufficiently skilled professionals to drive tech projects is still an ongoing issue, with the skills gap reaching its highest level since 2008, according to the survey.

The areas of expertise that are hardest to find in the marketplace are big data and analytics, cited by 44% of respondents, followed by cyber security (39%) and artificial intelligence (39%).  

According to Harvey Nash’s Ellis, there are early signs of a move towards supporting technical apprenticeships as a way to address the skills issue. Citing his company’s own initiative, he said one way to go could be to look for other character traits in candidates and then provide training for additional requirements.

“We look for characteristics of determination to succeed, ambition and ability to stick [to objectives], then train them for the technical skills that clients need,” said Ellis. “What clients need is mostly people who will stay in their jobs and be part of the future.

“So we are looking for people who are unskilled and therefore have a much longer ramp up into their careers, so clients can get anything between three to seven years out of them.”

The problem with making initiatives such as apprenticeships a way to alleviate the skills gap is the short-term mindset usually seen in companies, said Ellis, and this lack of long-term vision has been compounded in the UK by Brexit.

“We are seeing a lot of eastern Europeans go home now, even though Brexit has not even happened,” he said. “So that [Brexit-related] uncertainty is putting talented IT professionals off [coming to or staying in the UK], so there could be even greater skills shortages. Apprenticeships are a way of addressing that and thinking longer-term, as this [issue] is not going to go away.”

AI adoption and quantum interest

As regards technology trends, the survey noted that the adoption of artificial intelligence (AI) is having a significant impact on business leaders, with many being tasked to use it to improve efficiency (up 17% as a board priority).

The overall expectation of leaders surveyed is that one in five jobs will be replaced by tech within five years, but new roles will make up for job cuts caused by AI and automation (cited by 69% of those polled).

Organisations leading in the adoption of automation technologies such as AI, advanced analytics and robotic process automation (RPA) can obtain real financial benefits, but Bates said the pace of scaling is not fast enough for many organisations to see the gains they had hoped for. 

“There are going to be major jumps in capabilities as organisations mature their data management capabilities and enhance their abilities to teach machines more complicated tasks,” he said.

The rise in AI adoption is also adding more responsibilities to CIOs’ remit as they will need to understand how AI will displace jobs in their organisations, said Harvey Nash’s Ellis.

“It is likely that jobs will be displaced by systems that the CIO has presented to the company,” he said. “So the CIO has to understand elements of human resources [HR] to handle that and work with HR departments to prepare the workforce and think about preparation, transition and communication around how that is going to happen.” 

Another trend highlighted in the report is quantum computing, which, despite its early stages of development, has been adopted by 107 global organisations (4% of respondents), including large pharmaceuticals, energy and financial services firms.

While quantum technology is a potential game-changer – particularly for financial services, pharmaceuticals and biotech businesses, because they require highly complex processes with large quantities of data input and results in seconds – KPMG says organisations are still several years away from broad commercial application of the technology.

“There are significant risks when considering quantum computing,” said Bates. “There are researchers that believe that quantum could make all current cyber and encryption technologies obsolete in the next five years.”

One-fifth (22%) of organisations polled by Harvey Nash and KPMG that reported investment in quantum computing are UK-based, with 19% in the US, followed by 7% for both Australia and the Republic of Ireland.