Security tops CIO worries; IT budgets, turnover on the rise

Security tops CIO worries; IT budgets, turnover on the rise

CIOs are spending more on IT, worrying most about security and privacy, and staying on the job a little longer, according to the latest data from the Society for Information Management (SIM).

The 2015 SIM IT Trends Study isn't available in its entirety, but researchers released preliminary findings in advance of the full release in early November.

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A key theme of the research is the need for speed -- how IT groups are under pressure to keep pace with the business and deliver new technologies faster. "The business is changing, technology is changing, the pace of change is increasing, and IT is changing in order to keep up with it," says Leon Kappelman, lead researcher for SIM's annual poll of IT professionals.

This year marks the 35th anniversary of the SIM IT Trends Study, which surveyed 1,002 people (including 451 CIOs) from 717 organizations. Among surveyed companies, the average annual revenue is $5.6 billion and average annual IT budget is $288 million.

For the last several years, the focus in IT has been on optimizing technology, reducing spending, and helping the business cut costs, Kappelman says. "Now it's more about strategy, innovation, value."

SIM also notes a trend away from centralized IT and toward more a more decentralized or hybrid approach.

"IT is becoming more federated. It's more about the business, it's more customer focused," Kappelman says. "As IT becomes more federated, it becomes less focused on optimizing IT and more focused on optimizing the whole of the enterprise."

This isn't a trivial change, Kappelman says. "You don't change the structure of an organization on a whim. There's serious culture change involved in this. This is a slow moving but pretty clear trend that we've seen over the years."

The trend for CIOs to focus more on the business and less on pure tech is evident in how their success is measured. According to respondents, the top 10 performance measures for CIOs, ranked from 1-10, are: the value of IT to the business; IT's contribution to strategy; customer satisfaction; innovative new ideas; availability; projects delivered on time; IT cost controls; productivity improvement; business cost reduction controls; and revenue growth.

SIM also asked how CIOs spend their time, and their answers reinforce a business-focused agenda.

According to the study, CIOs spend 41.5% of their time on business activities, including evangelizing IT, addressing the needs of IT and business customers, and managing change; 36.1% of their time on IT activities, including project management, resource allocation, IT governance, and technical research; 18.3% of their time on IT and business strategies; and 4.1% of their time on career activities, in particular managing personal networks.

On the numbers front, a majority of IT leaders are reporting modest growth in budgets. The percentage of revenue allocated to IT rose to 5.14% in 2014, up from 4.95% in 2013 and 4.94% in 2012. The five-year low was 3.55% in 2011.

Meanwhile, turnover is on the rise. The average IT employee turnover rate hit 9% in 2014 a nine-year high. That's up from 6.6% in 2013 and 5.2% in 2012. To combat employee turnover, leaders are investing more on training and education. The percentage of IT budget allocated to training and education was 5% in 2014, up from 4.7% in 2013 and a six-year low of 2.9% in 2012.

While IT workers are more inclined to change jobs, CIOs are staying longer. The study found average job tenure of CIOs in 2014 to be 5.4 years, above the nine-year average of 4.8 years.

When asked about the most important IT management concerns for the organization, the most pressing issue cited is a familiar one: alignment of IT with the business. IT pros also said the organization is concerned about security and privacy; business agility and flexibility; business productivity; and IT time-to-market or speed of delivery.

Meanwhile, when CIOs were asked about their own IT management concerns, security and privacy ranked first. The next most worrisome issues for IT pros are IT talent and skills shortage, followed by alignment of IT with the business; IT time-to-market; and IT's value proposition to the business.

Ranked from 1-5, organizations' five largest IT investments are: analytics and business intelligence; data center infrastructure; ERP; application software development; and cloud computing.

At first glance, Kappelman says he didn't expect data center infrastructure to be the second-highest spending priority. "At first it seemed surprising, but when you think about it, with all the investment in internal cloud, shared services, big data and analytics, and the fact that, according to our data, 83% of all IT is delivered through in-house capabilities (17% through external, public cloud-type things), it's no wonder we need more capability to deliver it," he says. "In reflection it makes perfect sense."

SIM, which counts 4,500 CIOs and senior IT executives among its ranks, will hosts its annual SIMposium conference in Denver in early November.

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Tags Data CenterIT spendinghardware systemsConfiguration / maintenanceSociety for Information Management

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