09 Oct Gartner outlines CEO concerns for CIOs, highlights social networking
Orlando, Fla. – Why should CIOs care about what CEOs think?
The question, posed by Jorge Lopez, managing partner for Gartner, generated a smattering of laughter from the collection of CIOs at Gartner Symposium/ITxpo 2007, but in reality they know it’s no laughing matter.
As Lopez explained, CEOs and their worries can serve as a good indication of what CIOs should be thinking about as they make plans for 2008 and beyond.
Given what Gartner surveys indicate about the CEO mindset, CIOs will be thinking long and hard about potential economic storm clouds, global expansion, and even how social computing concepts can be applied to the enterprise.
If history is any indication, CIOs should pay very close attention to this. In 2004, analysts could tell that for first time after dotcom bust, CEOs were focusing on growth, Lopez said. Yet CIOs were still focused on cutting costs and doing things more efficiently, which is why they should try to get into their CEO’s head, if they haven’t already.
“Those CEOs are a leading indicator of what your budget will look like in the next few months,” he said.
So just what are CEO’s worried about these days?
Economic conditions, for one. Liquidity issues arising from the United States mortgage downturn could impact global liquidity, and that could impact an organization’s plans to move into emerging markets, where those who are late to the game are ready to rush in.
This is a firmly established trend. General Electric, for example, says 60 percent of its growth will come from its emerging market over the next decade. When CEOs look around, they discover the likes of Brazil, Russia, India, China, and South Africa, experiencing torrid economic growth, Lopez said. While that’s a positive sign from a global business perspective, it will only ratchet up the pressure on CIOs to deliver a technology infrastructure that can smoothly enable geographic expansion.
As an adjunct to that, they wonder where they will find the international talent they will need, a challenge that will likely be on the CIO’s doorstep as well.
The global economy, once static in nature, is undergoing shifts that no CIO can ignore, especially with business organizations interested in going where labor and knowledge are readily available. “This sort of growth has implications because we expect greater demand on the resources that you’ve already put in place,” Lopez told CIOs.
Believe it or not, Web 2.0 is finally on the CEO radar screen. What many people once considered a technology discussion now is showing up in business discussions, Lopez said. Eighty-five percent now see sharing and collaboration tools as an opportunity to increase revenue and/or margins, and some of that is generational.
“We’re coming into a new generation of CEOs that grew up with the technology, that have an iPod or a Blackberry, and wonder why it can’t be employed in the business,” Lopez explained. “We’re going to keep watching this to see if this grows as CEO demographics change. We’re bound to see more CEOs who are more technology friendly.”
That will serve as a counterweight to cost-cutting pressures, but it’s still important to talk to CEOs not in terms of technology, but in the context of the benefits technology brings to the business, Lopez said.
With talent shortages seen by CEOs as a future restraint on growth, one area where social computing concepts can be applied in business is to address skill gaps. They can be used to reach “alumni” of your company that may want to migrate back, or retirees who still want to make a contribution on their own terms.
Lopez said 21 percent of small and midsized U.S. company CEOs have made an interesting confession – they have searched for job candidates on MySpace, Facebook, or Google. On the surface, this would strike some as an act of desperation, but Lopez said such practices should be institutionalized because this is how to connect with the talent that is out there, delve deeper into different communities, and leverage online social networks for the purpose of recruiting and retention.
Taking this on is not something IT can do alone. To accomplish it, Lopez said IT departments must help human resources become more strategic. It’s a different page from the same playbook, but IT and HR should be engaged in discussions about socio-technical changes in work, society, and labor markets. The joint enlightenment that can result should gradually lead to new HR strategy formulation and policy development.
CIOs should respond to potential threats of cost cutting by changing the subject to things that drive the business forward. To ensure that IT spending survives any cost-cutting drives, make sure the budget is geared to the valued-added parts of business and to applications that will be the growth engine of tomorrow, not yesterday. The management tools that CEOs are the happiest with, according to Gartner, include those related to strategic planning and customer segmentation.
It’s important to do that because as expectations rise for IT departments, CEOs measure IT projects the most. IT has become the most scrutinized part of business organizations, and CIOs now are scrutinized almost as intensely as the CEO.
“Now, they [CEOs] are saying, `No, I want to spend the amount of money it takes to run my business, but no more,’” Lopez said. “They think they have not held IT accountable.”
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• Paul Gibler: Virtual communities make online connections
• Businesses are slow to adopt Web 2.0 concepts
• Are businesses getting what they need from IT?
• CEOs and CIOs must be ‘joined at the hip’