Challenges and trends for CIOs

Over the last couple of weeks I've had 5 or 6 in depth conversations from CIOs from various sectors and despite the differences in sector(s) there's no doubt the unanimous challenges that CIO's across the board are facing which we thought would be useful to summarise here.  

• The challenge of new technologies.
  2023 will always be remembered for the year that catapulted chatgpt and generative AI technologies to c-suite with the added pressure of understanding how best we should utilise this in our respective businesses. AI has opened the mindset of executives to challenge how this can create efficiencies and reduce pressure on budgets. 
• Peak inflation and budget constraints 
  2023 has also been the year when inflation has really started to bite, having to take forward into budgets this year the impacts of price and wage rises the year before. This has meant less budget in some sectors for transformation and has influenced the tightening of operating budgets moving forward.
• Cloud technology 
  Many businesses and existing clients have done some great work with new and ongoing projects in moving workloads into the cloud (SaaS), reducing reliance on on-premise hosting and 3rd party arrangements.
• Business cases 
  We've seen customers continuing to form business cases for, review and implement central application systems that aim to drive greater joined-up activity across an organisation, particularly in healthcare.
• More data and reporting 
  Lastly, we've seen an increase in the number of projects from a data analytics and reporting perspective, with execs having a strong focus on enabling greater value from data through reporting and centralising data across systems to improve operational insight.

All of these trends don't come without increased pressure though, which typically for a CIO is linked to:

Budget - flexing operations budgets (pairing back to core spend rather than discretionary spending) to maintain levels of service previously offered has come into play for most clients. However, the demand for change has continued from business service owners and directors, helping to drive efficiencies and capability to offer services to their consumers. Indirect business value from the likes of upgrades and refreshes or migrations to (IAAS) cloud services continues to be difficult to represent and make the case for, with often, the need to move to the cloud to offer flexibility and innovation, despite increases in costs cloud is shown to bring over the long term.

Apps and Tech Sprawl - operating with the level of complexity of technology and applications is seen to be unsustainable by many of the clients we've spoken to. In organisations where there are large numbers of departments or there a number of complex or niche business processes, it can mean that applications are purchased to fulfil a niche in that moment. People get used to those applications but when projects such as digital transformation come along and consolidate functionality into a central system, those niche applications can become obsolete but without successful retirement planning, they remain in the environment for a long time. This propagates an under-the-iceberg technology stack that proves inefficient and difficult to support. Getting rid of these legacy apps can be difficult from the perspective of retiring the data they hold and the commercials around them, creating a tail of complexity that's difficult to address.

Talent and capability - demand from the business's IT service hasn't decreased, if anything tech departments are increasingly looked upon to innovate and deliver business efficiencies. Increasingly organisations with modest budgets, also struggle to hire the required talent, often losing out to more affluent players in the market. It means being creative with delivery and we've seen an increase in fractional CTO and CIO roles in 2023, moving away from consultancy and 3rd party managed services to reduce cost and stop the knowledge drain from the organisations.

 So what do we expect to see in 2024? 

There's no doubt 2024 is going to be another economically challenging year for businesses, however, new technology is paving the way for increased visibility and quick decision making meaning more C-suite decisions than ever are routed into data and fact. CIO's have told us they'll be looking at:  

• Operating model adjustments - with continued pressures on budgets and with an increase in organisations moving to and implementing cloud services, operating model changes will have to be made to realise the savings promised from those technologies. Skills in data, cloud, dev ops and continued use of agile project management techniques will play a role in instilling a start-up mentality in the larger organisations, enabling creative change on a shoestring. This doesn't necessarily mean headcount adjustments but there'll be more pressure to do more with the same / less resources available and maximise investments made.
• Data, AI, Cloud and Innovation - we believe 2024 will continue to be the year of changes in behaviours in gaining more value from data organisations own and applying technologies like machine learning and AI technologies to create efficiencies across business operations. Because of this, we'll continue to see a shift to cloud services for analytics, integration and connectivity whilst AI will continue to be built into market-leading applications and systems people use daily.
• Consolidation of 3rd party vendors - reacting to spending pressures, we believe customers will have no alternative but to reduce 3rd party spending unless it's core to the IT service. Spending on discretionary services like consultancy and advisory services will likely see a reduction and people will be looking for cheaper alternatives to improve their capabilities whilst avoiding expensive long-term services.

If you're looking ahead to 2024 and find yourself facing some of these challenges keep your eyes peeled for our CIO Virtual Round Table series which aims to connect CIOs sharing data, insight and best practice.  

A bit about CoPerceptuo:

CoPerceptuo is a SAAS tool that helps IT leaders make decisions in a better way. It helps IT leaders balance the budget and demand of the organisation, reduce complexity and drive increased capability across their team. It helps provide a different approach to advisory services that avoids the expensive day rates and upskills the team to be more autonomous, guiding you in the evidence you need to collect to drive an outcome.