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05:20 PM
Marianne Kolbasuk McGee, InformationWeek
Marianne Kolbasuk McGee, InformationWeek
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Old and New Worries Keep CIOs Awake at Night

Aligning IT and business, and attracting and retaining IT talent are among the top CIO concerns, according to the Society for Information Management.

What's keeping CIOs up at night? Issues involving IT alignment, staff, security and speed are among the challenges that many business technology leaders are most likely to lose sleep over, according to a new survey by the Society for Information Management (SIM, Chicago).

The top three IT management concerns of CIOs in 2006 are the alignment of IT and business at their companies; attracting, developing and retaining IT talent; and security and privacy issues, according to SIM's latest annual survey, which polled 139 CIOs.

But that's not all CIOs are anxious about. While many of the top concerns named in 2006 are the same issues that CIOs have struggled with over the last few years, new challenges also are rising to the top. New to the top 10 concerns of business tech leaders this year are speed and agility.

"Speed and agility are the new buzzwords we all struggle with," says June Drewry, global CIO of the Chubb Group of Insurance Companies (Warren, N.J.). "IT has been known for taking a long time to define, build and deliver, but that's not an acceptable approach today," she adds. [Ed. note: Drewry was an I&T Elite 8 honoree in 2001 as EVP and CIO of Chicago-based Aon Corp.]

Other top IT management concerns include IT strategic planning, project management capability, introducing rapid business solutions, true return on individual IT investments, measuring the value of IT investments and IT governance.

Falling off this year's top 10 list of IT management concerns is business process reengineering, which isn't necessarily a good thing, says Jerry Luftman, SIM's VP of academic community affairs, who oversaw the survey. "This says CIOs are focusing more on technology than business," says Luftman, who is also a professor and associate dean of graduate IS programs at Stevens Institute of Technology. "You must focus on both to be successful."

As for technology priorities, half of the top six applications and technology developments on CIOs' plates in 2006 are new to this year's list. Debuting on the list are Web services, business process management and customer portals. Business intelligence, security technologies and systems integration remained on the list.

At Chubb, Web services, service-oriented architecture and reusable software components are being looked at or deployed as technologies that can help the company tackle speed and agility issues, according to the firm's Drewry. These technologies help business units change rules within applications without IT's involvement, providing the units with more agility, she says. "There's always a backlog [of IT work]. With the new tools, IT is no longer the backlog" to business agility, Drewry says.

The attraction, development and retention of IT talent also are top of mind for CIOs. When recruiting entry-level IT staff, the top traits CIOs look for are communications skills, followed by functional area knowledge, systems analysis, user relationship management and systems design. The top requirements for midlevel hires also are solid communications skills, project leadership and functional area knowledge. Other traits on the list are experience in business process design and reengineering, managing expectations, change management, and systems analysis.

For Chubb, project management, business skills and subject expertise currently are key talents, says Drewry. But in the longer term, "we worry about when the baby boomers retire," taking with them years of industry, business and legacy system expertise, she adds. Now, the company uses contract staff when needed, as well as some offshore development work for projects, Drewry explains.

About 37 percent of the surveyed CIOs expect their IT staff to increase in 2007 from 2006. About 28 percent expect to have fewer IT staffers, and 35 percent expect head count to be the same. About 70 percent of CIOs project that their staff salaries will increase next year, with about 9 percent predicting salary budgets to be less and 20 percent expecting salaries to remain flat.

The average IT budget this year was 3.6 percent of company revenue, according to the survey. The biggest chunk of the IT budget (35.2 percent) was allocated to internal staff. Only 9.5 percent was earmarked for domestic outsourced staff, 2.7 percent for offshore staff and 8.9 percent for consultants.

Interestingly, the top six "vehicles" CIOs are using to retain their staff don't include money. Rather, the top factors were open and honest communications, good worker-supervisor relationships, trust among coworkers, challenging work experience, opportunities for advancement, and balance between work and personal life.

As for CIOs themselves, they've been in the job an average of 3.6 years. And compared to last year, more of them report to CFOs and CEOs, and fewer report to COOs. This year, 45.2 percent of CIOs said they report to their company's CEO, compared to 42.6 percent last year.

There also was a rise in the number of CIOs reporting to CFOs, to 25.4 percent this year from 21.8 percent last year. In general, the relationships between CIOs and CFOs have become tighter in recent years because of the focus on Sarbanes-Oxley and other compliance issues, says Craig Smith, a managing partner at executive recruitment firm Christian & Timbers (Boston). "We're seeing more CIOs reporting to CFOs because of the role that technology plays in compliance," he says. "There are a lot of controls that are part of internal systems."

Courtesy of InformationWeek, a CMP Media property.

IT Management

For more on what keeps CIOs up at night, including staffing issues, see related articles.

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