Jerry Luftman. Executive Director & Distinguished Professor SIM VP Chapter Relations & Academic Affairs, Emeritus
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1 Jerry Luftman Executive Director & Distinguished Professor SIM VP Chapter Relations & Academic Affairs, Emeritus
2 8 HEADLINES 1. State of IT is Resilient 2. Cautious Improvements in IT Spending 3. Judicious Increases in Hiring & Salaries; Minimum Downsizing 4. Progressing Towards Pre-Recession Levels 5. Working Effectively With Business Partners 6. HR Not a Major Focus Area 7. Do IT Professionals Possess the Right Skills? 8. Offshore Outsourcing Trending Upward
3 Top IT Management Concerns 1 Business productivity and cost reduction 2 Business agility and speed to market 3 IT and business alignment 4 IT reliability and efficiency 5 Business Process Reengineering 6 IT strategic planning 7 Revenue generating IT innovations 8 IT Cost reduction 9 Security and privacy 10 Globalization
4 Top IT Management Concerns IT Management Concerns Business productivity and cost reduction Business agility and speed to market IT and business alignment IT reliability and efficiency Business Process Reengineering IT Strategic planning Revenue generating IT innovations IT cost reduction Security and privacy Globalization Change management Outsourcing/vendor management Enterprise architecture IT human resource considerations Knowledge management Project management Sourcing decisions CIO leadership role IT organization design Societal implications of IT
5 Priority of Time Allocated for IT Business Alignment Considerations IT-business communications regarding understanding strategy, risks, opportunities, etc 35% (25%) IT-business partnership (e.g. trust, relationship, shared perceptions) 26% (30%) Measurements demonstrating IT contribution to business 16% (12%) Architecture and technology standards, integration, flexibility 4% (11%) Skills (business, technical, interpersonal) 9% (7%) IT Governance & prioritization 10% (15%) (2009)
6 Priority of Time Allocated for IT HR Considerations Developing business skills 27% (35%) Developing technical skills 3% (8%) Developing interpersonal skills (e.g. communications, collaborating) 48% (45%) Retaining 10% (7%) Recruiting 12% (5%) (2009)
7 Top 5 Application & Technology Investments Business intelligence 2 Virtualization* 3 Enterprise resource planning (ERP) systems 4Continuity planning/disaster recovery 5 Cloud computing* * New to top 5
8 2010 IT budget in comparison to 2009 (Actual) 66% ( 75%) (52%) (25%) (23%) 65% (48%) (2009)
9 2011 IT budget will be in comparison to 2010 (Projected) 62% (66%) 73% (65%) (*Getting back to pre recession range of 45%) (2010)
10 2010 IT Budget Allocation (Actual) Outsourced Staff - Domestic 7% (8%) Outsourced Staff - Offshore 5% (4%) Consulting Services 10% (12%) Hardware, Network, Software, Depreciation 32% (33%) Internal Staff - Domestic 43% (39%) Internal Staff - Offshore 3% (4%) (2009)
11 2010 IT Staff Turnover Rate 2010 Average Average: Average: Average: Average: 7.20
12 2011 IT Budget Allocation (Projected) (2010)
13 IT Budget allocation for Offshore Outsourcing (Projected)
14 IT budget divided between running existing systems and building/buying new systems (Projected) 2011 (Projected) Percentage allocated to running existing systems Percentage allocated to building/buying new systems
15 Anticipated percent of your IT budget allocated for education/training (2011) 1% or less of IT Budget 39% (42%) 2% of IT Budget 15% (15%) 3% of IT Budget 10% (8%) 5% of IT Budget 15% (17%) 4% of IT Budget 2% (3%) 10% of IT Budget 12% (10%) IT Budget > 10% 5% (4%) 7% IT Budget 2% 2011 Avg: Avg: Avg: 3.19 (2010)
16 IT Budget As Percent of Corporate Revenue % 48% (2009: 58.3%) (2009: 41.7%) Average: 3.87 (2009: 3.83) (2005-9: 3.67)
17 2010 IT Staff Salaries in Comparison to 2009 (Actual) (2008: 19%) (2009 : 66%) 58% (2009: 34%) (2009: 47%) 83% (2009: 81%)
18 2011 IT Staff Salaries in Comparison to 2010 (Projected) 39% (2010: 9%) (2010: 46%) 91% (2010: 45%) (*Back to pre recession range)
19 CIO or Senior IT Executive Reports to CEO/President 44% (49%) [3.26] Business Unit Executives 4% (10%) [3.20] COO 11% (15%) [2.97] CFO 31% (25%) [2.79] Other 10% (7%) Other: Board of Directors, CAO, Deputy CEO, Provost, Executive Vice President, VP Strategy) (2009) [Alignment Maturity]
20 How long has your CIO (or senior IT executive) held their position? 52% > 3 Years (2009: 48%) 48% =< 3 Years (2009: 52%) 2010 Average: 5.1 Years 2009 Average: 4.6 Years 2008 Average: 4.3 Years 2007 Average: 4.1 Years 2006 Average: 3.6 Years
21 How CIOs spend their time Architecture 7% (7%) Human Resources* 7% ( 8%) IT Governance* 9% (10%) Operations 12% (11%) Strategy* 13% (15%) Software development 6% (6%) Relationship Management with vendors*# 6% Relationship Management with IT staff* 11% (12%) Non-IT* 11% (10%) Relationship Management with Business* 18% ( 19%) *75% time non-technical (2009 >74%) #new entry in the list
22 Your current CIO was hired from IT: 92% Outside your company from an external IT organization 54% Within your company's IT organization 38% Outside your company: 58% Outside your company from an organization outside of IT 4% Within your company from an organization outside of IT 4% Outside of IT (8%): General Management 3%, Marketing 2%, CFO 3%
23 2010 IT Organization Centralized 68.0% *2.87 Federated/Hybrid 28.0% Decentralized 2.0% *2.64 Networked 2.0% [ 18.4%;22.2%; 18%; 15.7%] *3.03 [2009;2008; 2007; 2006 findings] * Alignment Maturity
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