A focus on outsourcing and cost saving awaits the CIO

News by Dan Raywood

A shift in budgets and spending will put a renewed focus on getting the best value from IT investments and evaluation of outsourcing relationships.

A shift in budgets and spending will put a renewed focus on getting the best value from IT investments and evaluation of outsourcing relationships.

In a global survey on the agenda of the chief information officer (CIO) by KPMG, 81 per cent of CIOs claimed that they are putting a renewed focus on getting the best value from IT investments as they seek to forge a more transformational role for themselves by using IT to drive innovation.

Notable for CIOs is the relationship with outsourcing partners, as the report claims that over two-thirds of CIOs expect to increase the focus on the outsourcing price:quality ratio that they currently experience, and will continue to review and squeeze existing outsourcing relationships.

Bryan Cruickshank, a partner with KPMG Advisory in the UK, said: “CIOs are pursuing value by reviewing outsourcing arrangements and retaining a firm focus on cost optimisation for example. At the same time though, they are demonstrating their willingness to move the CIO role from its typically operational home into something more transformational.

“With that in mind, the days when IT was seen merely as a way of improving efficiency seem behind us. These days, CIOs expect IT to contribute directly to realising the business strategy and to have a central role in management.

“The transformational shift is evidenced by the fact that sixty five per cent of respondents felt that IT could assist in enabling and driving business innovation while a similar number felt it could assist with increased productivity. Over half also saw IT's potential for enabling competitive advantage and improving external customer satisfaction. These are not the responses of CIOs who still see IT's predominant role as an operational cost centre.”

ArcSight CEO Tom Reilly commented that many CIOs are now future proofing to make security investments better.

He said: “I met with the CEO of a company who suffered ‘the largest breach in history' and he said that he could not have stopped the breach but I said that he could have stopped it going on for 18 months.

“It is all about spending less, but try to improve risk management. In this industry you have to show cost savings, improved security and brand protection. Compliance is not discretionary, CIOs dread audit cycles as they are expensive and time consuming but there is regulation and there is more regulation coming.”

Commenting on outsourcing, Reilly called it the ‘enterprise of the future', he said: “Business is going to be distributed, outsourced and that is where innovation is, it is more outside than back in. Being a cloud company has so many advantages, if you outsource storage you can get rid of the database by turning it over to an IT vendor and get storage on demand. It is inevitable.”

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