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Investment in New Technology is Growing at Fastest Rate in 8 Years, but Digital Skills Shortages Risk Holding Companies Back, Says Harvey Nash 2014 CIO Survey

Investment in new technology is growing faster today than at any time since 2006 as business confidence returns and companies act fast to play catch up on their digital offering, according to the Harvey Nash 2014 CIO Survey. As organizations ramp up their investment in digital, mobile and online, almost two-thirds of companies report that a lack of access to the right technology talent is holding back their digital strategy.

Seven percent of organizations now employ Chief Digital Officers, a position that until recently did not exist, rising to 16 percent for companies with technology budgets of $100 million and over. CIOs are now less likely to have a direct role in shaping the digital strategy, with 50 percent playing an active role in 2014, down from 56 percent last year. 40 percent of Chief Digital Officers report to the CEO, 22 percent report to the CIO and 16 percent report to the CMO.

“The Chief Digital Officer role is emerging as the new position to drive company growth by converting traditional business to digital, especially in sectors like advertising, marketing, information services, mobile applications and media,” said Harvey Nash Inc. President and CEO Bob Miano. “The Chief Digital Officer will most certainly continue to impact the CIO as its influence grows.”

The 16th annual global Harvey Nash CIO Survey represents the views of more than 3,200 Chief Information Officers (CIOs) and technology leaders from across more than 30 countries, with a combined technology spend of over $160 billion. The Survey is one of the largest and most comprehensive polls of technology leaders in the world.

“After six years of sluggish activity, this report clearly shows that 2014 is a watershed year,” said Dr Jonathan Mitchell, chairman of Harvey Nash’s global CIO practice. “CIOs and Technology leaders are seeing growing budgets and growing prominence in their organization as CEOs are turning to technology to drive growth. However, significant challenges lie ahead. This year has seen a worrying increase in the number of leaders citing concerns about skills shortages. To be successful, organizations will not only need a clear technology strategy, but they will also need the right people to deliver it.”

Record Optimism

Technology budgets are growing as Chief Executives increasingly favor investing for growth over cost reduction and efficiencies. Newly created roles within companies are evolving to lead digital growth, such as the emergence of the Chief Digital Officer and the increasing influence Chief Marketing Officers have over technology related spend.

  • Budget growth: Forty six percent of CIOs and technology leaders experienced budget growth in the last twelve months, up from 42 percent last year, and the highest level of budget growth since 2006 (where 47 percent of technology leaders experienced budget growth).
  • CEO priorities changing: Almost two-thirds of CEOs (63 percent) now prioritize projects that generate cash (such as digital marketing, customer oriented systems and innovation led projects) over projects designed to deliver cost savings or improve operational performance. As business confidence improves, CEOs are shifting their attention away from cost savings (their top survey priority for five years between 2009 and 2013) to using technology to improve the effectiveness of their operations (top priority in 2014).

Skills Shortages

Concern about the skills shortage is up 15 percent from last year (global average). In Asia, for example, the problem is particularly acute. Retaining, developing and acquiring the skills to drive the growth program are now major priorities for leaders all over the world.

  • Big jump in skills shortage: Faced with new projects and shifting priorities, sixty percent of technology leaders (60%) are experiencing a skills shortage within their teams preventing their company keeping up with its competitors. This is up from 45 percent last year, and represents the biggest increase since the survey started tracking this area in 2005. In the U.S., 55 percent believe the skills shortage is impacting ability to deliver (5 percent lower than the global average).
  • Regional differences: Leaders in Asia are most worried about skills shortages; however, in every region at least half the leaders polled voiced a similar concern.
        Asia       76%
Northern Europe 61%
West / Rest of Europe 60%
UK 59%
Eastern Europe 57%
North America 56%
Australasia 50%
  • Retention of talent a concern: Ninety percent of CIOs and technology leaders were concerned about retaining their best people, while 35 percent were ‘greatly’ concerned. Larger companies (250 technology staff or more) are 46 percent more likely than smaller companies (less than 50 technology staff) to be ‘greatly’ concerned; suggesting that in the technology sector smaller, high growth companies are more attractive to talented technology professionals.
  • Emphasis on ‘doing’ skills: Change management and project management skills are in greatest demand followed by hands-on software development skills and IT strategy.

U.S. Compared to Global Average

Compared to the global survey findings, the United States results vary slightly in several categories:

  • 46 percent plan to increase IT headcount, 4 percent higher than the global average
  • 9 percent currently have a Chief Digital Officer, 2 percent more than the global average
  • 11 percent of respondents are female IT leaders, 4 percent higher than the global average
  • 24 percent have faced a major IT security attack in the last year, 2 percent higher than the global average
  • 44 percent expect to increase outsourcing, 5 percent lower than the global average
  • 55 percent believe the skills shortage will prevent their organizations from keeping up with the pace of change, 5 percent lower than the global average
  • 64 percent see the role of the CIO becoming more strategic, 2 percent below the global average

About the Survey

The Harvey Nash 2014 CIO Survey collected data between 6th January and 19th April 2014 and represents the views of 3,211 technology leaders from more than 30 countries, with a combined IT spend of $160 billion. Of the respondents, 34 percent identified themselves as CIOs, 8 percent as CTOs, 36 percent as director/VP in technology and the remaining 22 percent were spread across a broad range of other roles including CEOs and COOs. For more information about the survey and to request a full copy of the results, please visit www.harveynash.com/ciosurvey or email [email protected].

About Harvey Nash Inc.

Harvey Nash Inc. is the U.S. division of the Harvey Nash Group, a global professional recruitment firm and IT outsourcing service provider, traded on the London Stock Exchange since 1997. Harvey Nash has helped over half the world’s leading companies recruit, source and manage the highly skilled talent they need to succeed in an increasingly competitive, global and technology-driven world. With 7,000 experts in 40 offices across Europe, Asia and North America, Harvey Nash has the reach and resources of a global organization, and it fosters a culture of innovation and agility that empowers all employees across the world to respond to constantly changing client needs. Harvey Nash Inc. works with clients, both big and small, to deliver a portfolio of services: IT recruitment, IT outsourcing/offshoring and executive search. To learn more, please visit www.harveynashusa.com. Follow us: www.twitter.com/harveynashusa and www.facebook.com/harveynashusa.

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