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IT functions in Southeast Asia find the alignment between IT and the business to be their greatest challenge

SINGAPORE, 9 December 2013 - In Southeast Asia, the CIOs who participated in the Deloitte CIO Survey 2013 indicated the alignment between the role of the IT function and the business to be the most challenging in the coming year. The survey gathered responses from over 700 CIOs and senior IT leaders across 36 countries and also revealed that for IT leaders to be successful they must learn how to understand the businesses needs better, find and retain people with business insight and determine how to provide innovative solutions for their business customers’ needs.

At a time when business transformation is a top priority for organisations, it is positive that the majority (75%) of CIOs understand how IT functions could support their organisation’s innovation strategies. This increased focus on digital and new business requirements places a greater demand on the IT department to be a centre of innovation. However, challenges remain as only 35% of respondents believe their IT function is considered a credible hub of innovation by the business.

Business transformation today is both fundamentally driven by and reliant upon the fast changing world of technology. It is therefore no surprise that the CIO’s role will be transformed over the next few years into a more strategic advisory role, especially in terms of developing and delivering business strategy. Some IT leaders are already playing a far stronger role at executive level; this is underpinned by the finding that over a third of CIOs consider their next role to be that of COO or CEO.

The business imperative is innovation, expansion and market differentiation. If IT does not support this transformation, then other areas of the business will step in.

However, there seems to be a real disconnect between what technology leaders believe they can achieve through IT and innovation – and how they think the business views their capability to do this. As a result, many IT functions are still struggling to partner with the business, with over 60% of respondents rating their business partnering capabilities as either “fair” or “poor”. For this reason, developing and implementing a dedicated business partnering function should be a top priority.

This relates to the next big challenge; a shortage of good talent, as CIOs struggle to find the right blend of technology expertise and business skills to support business demands. This is directly linked to IT business partnering barriers, as this process requires people who not only have the technological skills, but can also think strategically and communicate effectively.

Eric Peffer, Director of Deloitte SEA Technology Advisory, says, “We are confident there are many untapped opportunities lying ahead for the CIO. They have never played a more prominent role in the boardroom, nor have they had more opportunities to get closer to the business strategy than they have now. While we still have some way to go, especially in terms of improving the IT business relationship, the perception of IT is changing as more organisations realise the strategic importance of this function. This is a positive move in the right direction.”

Key findings include:

  • IT and budget priorities: IT budget cuts largely seem to be behind us, as the majority (78%) of budgets have increased or stayed the same since last year. Almost half (42%) of budgets are being put towards change or growth activities. Business as usual still receive the majority (60%) of IT budgets.
  • Business partnering: Over half of all respondents acknowledge there is still more to be done to improve the IT function’s effectiveness in facilitating business change and growth. More than 60% rate their business partnering effectiveness as merely “fair” or “poor” and business partnering now sits at the top of the priority list. Furthermore, almost half (45%) believe their data and insight capabilities within the IT function need improving.
  • Innovation: Many respondents struggle to change business perceptions of IT as a mere provider of routine IT services and educate business leaders on where it can add real value. For example, 75% of the IT leaders in our survey feel there are significant opportunities for IT to support business innovation, yet only a third (35%) believe their IT function is considered a plausible centre for innovative development within their organisation.
  • Talent: The above disconnect between the business and IT is due in part to a shortage of the right skills within the IT function. Almost 60% of CIOs indicated that they are experiencing problems recruiting staff – in particular those that can think like the business, think strategically and communicate effectively.
  • CIO careers: Almost 40% of IT leaders consider their next career that of COO or CEO, with a third (33%) not believing their current role provides them with development and job opportunities for a fulfilling career in IT. These leaders are eager to make a more strategic
    impact on their organisations and will look externally for roles that offer this opportunity. The main reasons for moving roles are a greater contribution to the business (27%) or a new challenge (26%).

To view the full results and analysis of The Deloitte CIO Survey 2013: Southeast Asia version, please click here.

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Deloitte Singapore
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