CIOs seek to maintain relevance through service-led transformations

CIOs must act now to take on a more strategic role or risk being pushed aside by line of business managers, an international survey carried out by Logicalis has found.

Of the almost three quarters (72%) of CIOs who expressed a view, 60% agreed that line of business managers will gain more power over IT decision making over the next three to five years – a trend driven by the growing availability of externally available cloud services and expectations of technology and application consumerisation.

In response, CIOs are more acutely aware than ever of the need to take on a key strategic role, the Logicalis survey found. They are actively seeking to confront the challenge of legacy operational costs and drive services-led technology and operational transformation, to reshape the IT function as a pseudo service provider. But most are still struggling to resource day to day management tasks:
· Three quarters (73%) of CIOs and IT Directors want to spend at least half of their time on strategic activities
· In reality, 53% of CIOs and IT Directors currently spend 70% or more of their time on day-to-day management of technology, while 80% spend at least half of their time on low value, non-strategic activity.

The international survey found that a consensus appears to be emerging as CIOs seek to effect the dramatic shift in focus on which their long-term relevance may depend. Internal technology and operational optimisation, aligned to more extensive and efficient use of managed services partners and cloud services are emerging as key priorities for the CIO and their organisation:
· 63% see streamlining and optimising their technology infrastructure as vital to freeing up time to focus on strategic goals
· 31% would consolidate the use of managed services, selecting single vendors to manage specific technologies and/or services across multiple territories
· 30% want to hand more day-to-day management activities over to specialist managed services vendors
· 19% point to an increased adoption of the cloud consumption model.

Commenting on the findings, Mark Starkey, Managing Director of Logicalis UK, said: “These findings confirm the reality we see on the ground. IT leadership is now actively looking to drive a services-led transformation strategy to re-align from a technology-defined function to one that is service-defined. But CIOs are not only looking to transform their IT systems.

“We interpret these common themes as CIOs striving to change the way IT is perceived by the wider organisation. Who wants to run a business function that line of business managers think is less agile and less relevant than external providers? Clearly these CIOs are taking a proactive approach to staying relevant, focused on a transformation agenda across all aspects of IT infrastructure, operations and the end user experience.
“Creating a service defined enterprise, in which IT and line of business are working towards shared priorities is now a crucial mandate for the CIOs we surveyed. It seems clear that CIOs will now focus their teams on delivering an IT experience comparable with external services providers, and will also engage with services partners to assist them in achieving the service maturity and agility necessary to compete for internal business in the coming years.”

In response to the survey, Logicalis is continuing to align its own services offerings to give customers a single point of engagement across three critical transformation journeys; bringing its Systems Integration, Managed Services and Cloud Service offerings under a single portfolio brand, Optimal. The Optimal services portfolio enables CIOs to create a balanced approach to owning, operating and funding the infrastructure and IT services their businesses need.

With over 2300 services professionals in 24 countries, Logicalis is actively investing in expanding its services skills, capabilities, platforms and processes, to address its clients’ key infrastructure, operational and consumption challenges – including a recently announced initiative to explore the future impact of Software Defined Networks on a range of customer sectors, and recent investments in ITSM skills in all major regions.
Chris Gabriel, CTO at Logicalis Group, said “Overall, it is clear from the survey that tackling both technology and operations transformation to deliver efficiency, maturity and agility is where our customers are looking for most assistance today.

“CIOs increasingly want partners like Logicalis not simply to help in one area. They want maturity and agility in how they build a new virtual data centre, but also how they automate services, connect into their service management environment, and then how they provide a service catalogue internal customers can consume at a price point and experience comparable with external providers. But, they also want us to deliver instant maturity by providing new business solutions directly, in the form of managed or cloud based services.

“But, while the customer is now looking for us to blend our role as Systems Integrator, Managed Services Provider and Cloud Solutions provider to support the service defined enterprise, the survey also suggests that CIOs recognise they may have too many services partners today. Services provider sprawl is an issue many CIOs clearly want to avoid or remedy by consolidating on a select number of service partners who can work across the services lifecycle, and that is very much part of the rationale behind the Optimal services portfolio.”

Chris Barnard, Associate Vice President at IDC, added: “We predict that business innovation focused on creating a wider variety of solutions targeted at new business opportunities and challenges will drive a profound shift in the role of the IT organisation.

“Enterprise IT groups cannot afford any longer to be just watching, studying, exploring, or experimenting with cloud services, mobile devices, social technologies, or the other core elements of what we call the 3rd platform. They must develop deep competence in all of these technologies, often with the help of third parties with expertise in ‘as a service’ strategies.”