Improving the Bottom Line is the Key Focus for Indian CIOs in FY13-14

by April 28, 2013 0 comments

27 April 2013: Improving the bottom line is the key focus for Indian CIOs in FY13- 14, according to an industry study conducted by Ernst & Young and the CIO Klub. In its 5th edition, the annual report “Enterprise IT trends and investment 2013” is based on the survey of over 180 Chief Information Officers (CIOs) from various companies across major industries.

The findings of the survey over the last five years highlight how CIO priorities have changed in response to the fluctuating economic scenario globally and in India. In 2009, cost reduction was a priority with shrinking markets and declining demand and in 2010, the mood was cautiously optimistic in tandem with visible growth for the year ahead. In 2011, in spite of the slow down, the mood was optimistic and organizations planned to take the plunge for large IT investments. However, due to continued uncertain economic environment, the focus in 2012 shifted to create a lean, agile and resilient IT function.

This year the focus has shifted outward and CIOs are concentrating on brining value to the business. While CIOs generally help businesses improve the top line, the current economic volatility is pushing them to look within and help businesses increase their bottom line. Devendra Parulekar, Advisory Partner, Ernst & Young said “Balance of Power is shifting to customers as consumerization of technology gains momentum. More than 60% of CIOs plan to focus on customer- centric initiatives thereby enhancing the customer experience and providing them with easy and effective interface to collaborate with the business. Customer-centricity in turn is closely linked to customer relationship management, social media and enterprise mobility.”

Says Shirish Gariba – President, CIO KLUB. “The CEO cockpit view of the business is expected to drive mobility evolution. 62% of organizations are likely to implement, upgrade or evaluate mobile applications in the coming year.”

The survey results indicate the following top priorities for CIOs in 2013-14:
– Being customer-centric and enhancing customer experience by providing customers with easy and effective interface to collaborate with the business
– Transforming IT and enabling business processes to create efficient operations
– Building resilience in IT to ensure business continuity
– Investing in enterprise mobility to provide flexibility to personnel in executing business processes
– Investing in business intelligence to leverage structured and unstructured information for decision making
– Securing the IT environment by investing in information security technologies and protecting the organization from internal or external threats

CIOs are working more and more towards enhancing the customer experience.. Additionally, this IT enablement agenda is likely to be driven by business intelligence, analytics, budgeting, planning, consolidation, business workflows and mobile-based applications.

Cloud is expected to bridge the gap between consumerization of technology and the traditional enterprise application world. Increasing number of businesses are moving into the virtual world, supported by
new technologies and driven by the need to lower their IT infrastructure and administrative costs while adopting a flexible and scalable model for IT. Though adoption of cloud services has gained impetus, the progress is still slow. This is not surprising, as the number of risks and challenges identified by respondents have remained fairly consistent over the years. Like any other transformational initiative, adoption of cloud also faces internal resistance as handing over the IT infrastructure and data security
controls is an inherently uncomfortable situation for most senior managements. Another decisive factor for the slow adoption is the increased bandwidth and network costs that somewhat neutralizes the savings in internal infrastructure costs.

Improving effectiveness of the IT function to enhance the experience of internal customers and IT-enable their requirements is another important area that is expected to occupy the CIO mind-share. This has been on the participant CIOs’ agenda for the last three years. However, the focus is greater this year, with 52% of the respondents citing this as a priority, as compared to 42% in the previous year. Focus on improving IT internally is consistent across the size of the organizations and sectors.

In FY13-14, information security continues to feature in top priority list. However, the security investments are oriented towards reducing data risk posted by the consumerization of technology. The survey reveals that organizations have already taken steps to address external threats, such as external hacking and are now focusing security investments in protection from internal threats.

Mobile applications deployment is expected to gain momentum in 2013-14. 62% of respondents are likely to implement, upgrade or evaluate mobile applications in the coming year. More than 35% of the respondents, who have either implemented or are evaluating enterprise mobility with BYOD, are expected to consider mobile device management (MDM) and network access control (NAC) technologies to protect corporate data and mitigate the risk of unauthorized disclosure. The survey also reveals that business leaders are extremely cautious with their investment plans this year, especially with the current uncertainties in the policy and regulatory environment and the spiraling costs. IT spend increase will be restricted to address inflation and rising costs. However, the outlook differs from sector to sector. For example, the automotive sector is not expected to witness high capital expenditure; 47% of the respondents from this sector expect the capex to decrease as compared to the previous year and 33% expect it to remain constant. On the other hand, the pharmaceuticals and life sciences sector respondents have overwhelmingly voted to increase the capital and operational expenditure; 83% of the respondents have cited an increase in capital expenditure while 67% of the respondents have cited an increase in operational expenditure. It is surprising to note that this sector had adopted a very cautious approach the previous year. Respondents from the retail and consumer products sector have recognized business continuity as their priority, and 60% of the respondents have confirmed this.

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