IBM: ASEAN CIOs are More Closely Aligned to CEOs

Makati, September 1, 2011 – IBM launched to local clients and business partners key findings from a newIBM study of more than 3,000 global Chief Information Officers (CIOs), including 168 CIOs in ASEAN, that shows that their role is seen as fundamental from top management: 68% of the companies interviewed rank technology as totally critical to the success of the business and 58% of them have largely integrated business and technology to innovate.

At the same time, CIOs are aware of the priorities of CEOs and aligned to the business agenda. Their shared, top three focus areas are strengthening relationships with customers, developing the skills of employees, and gaining insight and intelligence from data. In all three focus areas, ASEAN CIOs are more closely aligned and more focused on insights (89%; Global 79%), clients (76%; Global 71%) and people skills (79%; Global 66%) than their global peers. This finding is one of dozens of new insights and trends learned from CIOs worldwide.

IBM’s 2011 Global CIO Study is an analysis of face-to-face interviews with CIOs of organizations of every size, across 71 countries and 18 industries Titled “The Essential CIO,” the findings reinforce the increasingly strategic role that CIOs are playing as leaders of innovation and growth. The study is being released inIBM’s centennial year as the company marks the historic role it played in both establishing the need for CIOs in the 1950s and 1960s — the early days of business computing — and elevating the position over the ensuing decades to help it get a seat at the C-suite table.

A shared executive agenda with a clear mandate is empowering CIOs worldwide to help the business get the most out of technology, and as the ability to extract insights from structured and unstructured data increases in value, CIOs are also moving closer to the locus of power in their organizations.

“With technology becoming both an enabler of competitive advantage and embedded in every facet of the enterprise, the role of the CIO has never been more essential,” said Giuseppe Bruni, Lead, Strategy & Transformation, Global Business Services,IBMASEAN. “This study provides key evidence of how the capabilities of IT are finally aligned with the aspirations of business leaders”.

IBM’s research suggests that CEOs better understand the importance of technology. They increasingly rely on CIOs to turn data info usable information, information into intelligence and intelligence into better decisions. As a result, CIOs are assessing multiple means to make better use of burgeoning data stores.

TheIBMstudy found that four out of five global CIOs (ASEAN 86%; Global 83%) see business intelligence and analytics as top priorities for their businesses, as they seek ways to act upon the growing amounts of data that are now at their disposal. When asked how they will translate data into intelligence, CIOs named master data management (ASEAN 73%; Global 68%), customer analytics (ASEAN 72%; Global 66%), data warehousing (ASEAN 74%; Global 64%), and visual information dashboards (ASEAN 69%; Global 64%) as the key means.

Although it was already on the 2009 list of priorities, cloud computing took a giant leap. Now that it has come of age, it is rising more than any other CIO priority with 60 percent (ASEAN 57%) of CIOs ready to embrace cloud computing over the next five years as a means of growing their businesses and achieving competitive advantage – nearly double the number in the same study two years ago. Specifically, ASEAN CIOs cited rationalization of application portfolio (ASEAN 20%; Global 23%), and utilizing cloud services (ASEAN 23%; Global 12%), as top activities to control and reduce legacy costs.

CIOs are also increasingly turning their attention to mobile computing to keep pace with the fast-changing marketplace. As the proliferation of mobile devices with enhanced functionality and mobile applications that support business productivity and new market opportunities continue to grow, mobile computing and mobility solutions are now seen by nearly three-quarters of CIOs (ASEAN 68%; Global 74%) as a game-changer for their businesses.

As the role of the CIO itself transforms, so do the types of projects they lead across their enterprises.  Simplification is a driving issue for CIOs as more than 80 percent said they plan to lead projects to simplify internal processes (ASEAN 86%; Global 84%). This allows CIOs to focus less time and resources on running internal infrastructure, and more time on transformation, innovation and business value to help their companies grow revenue, rather than simply running IT. In the 2009 study, CIOs reported that getting closer to clients was on the horizon, but now they say, this is very much top of mind.

“It is a positive affirmation that the CIO is no longer looked upon as a technologist but is now recognized for bringing value to the business beyond IT infrastructure and processes,” said Rodney Regalado, Global Technology Services Executive, IBM Philippines.  “While cost cutting is here to stay as CIOs strive to do more with less, and drive creativity and innovation, there are still much opportunities and value to be leveraged from the cloud, business analytics and optimization technologies to help businesses infuse technology into products, services and processes.”

“This study is invaluable in tracking the evolution of both the CIO and the role of IT in driving business growth,” said Bruni “The thoughts and aspirations, challenges and insights shared in this report provide compelling evidence that IT is no longer simply an enabler of business. Increasingly, it is the business itself, as evidenced by the dramatic rise in importance of the CIO as strategic thinker and partner in business growth.”

Perhaps the most useful insight to emerge from this study, however, is not what makes CIOs similar, but what makes them different. Getting the IT fundamentals right is essential for credibility and trust and CIOs everywhere spend at least a portion of their time on basics like managing their organizations’ digital infrastructure. Beyond managing these pre-requisites, the study identified four distinct “CIO Mandates,” based on how each organization views the role of IT: Leverage, Expand, Transform and Pioneer. These mandates identify clear areas where IT must excel to support and enable the organization, and determine the required competencies IT needs to obtain and develop.

“High performing companies distinguish themselves in their ability to keep the CIO team focused on the business-aligned IT priorities,” said Bruni “They do that by clearly articulating and communicating the CIO team mission, or “Mandate” and using it as a prioritization mechanism for the IT investments”.

The differences in the four mandates also help to explain why CIOs in certain industries and geographies prioritize similar goals. For example, the “Leverage” mandate, predominant in heavy industries such has chemical and petroleum, sees the main role of IT in streamlining operations for greater organizational effectiveness, whereas the “Expand” mandate, typical of industrial products, life sciences and pharmaceuticals, focuses on the optimization of end to end business process management. The “Transform” and “Pioneer” mandates are seen most often in financial services, media and entertainment and telecommunications: while “Transformers” aim at enhancing collaboration of the company with its suppliers and clients, “Pioneers” attempts at enabling new sources of revenue by leveraging leading edge technology

Some key trends observed for the “CIO Mandates” include:

  • In ASEAN, the “Expand” mandate is the dominant mandate for CIOs in ten of eighteen industries, and “Expand” CIOs in ASEAN are more focused than their global peers on the benefits of global integration
  • Outperforming “Expand” CIOs place 45 % (ASEAN 24%) more importance, versus underperformers, on internal collaboration and communication, and (ASEAN 33%; Global 110% more) integration of business and technology for innovation
  • In ASEAN, the “Leverage” mandate is applicable to only Government (15%), Automotive (25%) and Consumer Products (11%)  industries, while it applied across industries for the global sample
  • Outperforming “Leverage” CIOs focus 63% more, versus underperformers, on sharing information with internal clients and 45% more on having the right IT and business talent team
  • The “Transform” mandate is most common in Financial Services industries in ASEAN and touts “Simplify, simplify, simplify” as its mantra
  • Outperforming “Transform” CIOs are, versus underperformers, driving better real-time decisions (33% better) and simplification for external partners (23% better)
  • Risk management frameworks is one of the most important priority and visual dashboards are also part of the plan in outperforming “Transform” mandate organizations
  • The “Pioneer” mandate comprise the majority of ASEAN CIOs interviewed and include industries such as Financial Markets, Telecom and Healthcare
  • Outperforming “Pioneer” CIOs are even more focused than underperformers on creating new sources of revenue, including adding new sources of revenue (ASEAN 7%; Global 94% more) and changing channel partners work relationships (ASEAN 33%; Global 30% more)
  • CIOs in outperforming “Pioneer’ mandates are also using key analytic techniques to assess and improve performance

The Essential CIO – Midmarket CIO Study 2011

“The Essential CIO – Midmarket CIO Study 2011,” isIBM’s largest face-to-face survey of midmarket CIOs to date, reflects the increasingly important role played by CIOs of midsize companies today as the global economy continues to recover. The results show that 83 percent of midmarket CIOs surveyed identified analytics, the ability to extract actionable insights from “big data” as their top-priority investment area, while there was a 50 percent increase in the number of midsize companies that plan to invest in cloud computing, compared to the Midmarket CIO Study 2009.

Midsize businesses together with small enterprises are responsible for nearly 65 percent of the global gross domestic product, representing more than 90 percent of all businesses and employing over 90 percent of the world’s workforce. TheIBMstudy looked at what constitutes the fundamental tasks of the CIO and what traits define the outperforming CIOs as they infuse technology into products, services and processes to transform their business, drive profitability and expand into new areas.

Top trends from the Midmarket CIO Study 2011:

  • Midmarket CIOs are focused on gaining deeper insight and intelligence (77 percent), people skills (68 percent) and client intimacy (67 percent) over the next five years.
  • 72 percent of CIOs at midsize companies are focused on integrating business and technology to drive innovation.
  • CIOs of midsize companies are harnessing the following tools and methods to turn data into actionable information: data warehousing (64 percent), visual dashboards (64 percent), master data management (63 percent), client analytics (63 percent).

About the IBM 2011 CIO Study

The 2011 CIO Study is part of theIBMC-Suite Study Series. Published by theIBMInstitute for Business Value, the C-Suite Study Series publishes in-depth studies for Chief Executive Officers, Chief Finance Officers, Chief Human Resource Officers and most recently, Chief Supply Chain Officers. The CIO Study included more than 3,000 face-to-face interviews, conducted over a four month period from October 2010 to January 2011. In addition to the detailed personal feedback,IBMalso utilized financial metrics, detailed statistical and textual analysis into the findings.

Marco Dennis

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