Over 700 IT leaders respond to Logicalis’ fourth annual Global CIO Survey

Businesses worldwide are undergoing dramatic digital transformations in an effort to respond to the threats posed by digital disrupters like Uber and Airbnb in their own industries. To find out how these changes are affecting IT departments and their top IT professionals, Logicalis surveyed over 700 CIOs around the globe – and the results may surprise you.

According to the fourth annual Logicalis Global CIO Survey, businesses’ digital transformation is gathering pace, with 73 percent of firms worldwide, to some extent, now calling themselves “digitally enabled.” This rapidly changing environment poses significant challenges for the world’s leading IT pros. Today’s CIOs have, for instance, less control over IT spending than ever before – 40 percent now say they make half or less than half of their companies’ spending decisions.

This trend is also reflected in the frequency with which CIOs are bypassed altogether – with line of business (LoB) buying technology without involving IT at all. The proportion reporting that this happens often, very often or most of the time has risen from 29 percent in 2015 to 39 percent in 2016.

Distributed IT: A New Kind of IT Environment
One result of this loss of control is a move away from centralized IT, with more CIOs now operating in “distributed” IT environments.

Perhaps surprisingly, this decentralization of IT, which is a natural extension of “shadow IT,” is no longer seen as subversive, however, and is instead viewed as a positive and essential element of digital transformation that must be supported in order to enable traditional IT departments to become digital enablers.

Are CIOs Embracing Shadow IT Departments?
While the vast majority of CIOs (83 percent) report that LoB departments now employ IT people whose role is to support business function-specific software, applications and cloud services – essentially acting as shadow IT departments – CIOs seem content to work with them. In fact, more than one-fifth of the world’s IT leaders (22 percent) report working with these “shadow IT departments” on a daily basis, while 41 percent report doing so at least weekly.

As Logicalis US CEO Vince DeLuca points out, the challenge for both CIOs and their IT departments is to find ways to support these specialists effectively, securing the infrastructure, applications and vital data without stifling the “shadow innovation” their skills support.

Security is Always Top of Mind
The combination of the Internet of Things (IoT), distributed IT, and the increased pervasiveness of applications into the very core of the business – along with an ever-evolving threat landscape – represents a perfect security storm.

As a result, the CIOs surveyed cited security as far and away the biggest challenge related to the increased use of cloud services:

• More than three quarters (78 percent) pointed to security as a challenge, with related issues like data sovereignty (47 percent) and local data regulations (37 percent) coming in second and third.

• A majority of CIOs (61 percent) expect the prevalence of increasingly sophisticated threats to be the No. 1 issue for the next 12 months, while issues like ransomware and corporate extortion were highlighted by more than half (56 percent).

Meeting the Challenge
The sheer range of issues facing CIOs as a result of their organizations’ digital transformation means the pressure to hand off day-to-day technology management, to focus on strategy, and to reframe IT departments as internal service providers is now greater than ever.

In response, CIOs are increasingly seeking partner-led and partner-delivered services. This year, one-fourth (24 percent) of the CIOs surveyed say they outsource most (more than 50 percent) of their IT, while the number outsourcing none or just 10 percent of their IT has dropped dramatically – falling respectively to 9 percent (compared to 13 percent in 2015) and 19 percent (compared to 26 percent in 2015).

Mark Rogers, Chief Executive Officer for the Logicalis Group notes that CIOs and IT leaders can play a leading role in enabling digital innovation, drawing on skills from insightful partners to help shape their businesses and lead their sectors through the application of digital technologies. Those partnerships will allow organizations to release the creativity that runs through their workforces and to use digital technology to deliver outstanding results.

Want to learn more? Compare this year’s results to the third annual 2015 Logicalis CIO survey, “The Shadow IT Phenomenon” here: http://ow.ly/tJgm3057hwP. And, if you’re looking for trends, explore Logicalis’ 2014 CIO report, “Establishing the Internal Service Provider,” as well as the 2013 report, “Embracing a New IT Reality.” Learn more about the service-defined digital transformation organizations worldwide are undergoing in this WatchIT video featuring Logicalis US CEO Vince DeLuca: http://ow.ly/IJ0Y3057pQC. And finally, read a Logicalis white paper: “Why Every CEO Wants to Lead a Service-Defined Enterprise and Why the CIO Needs to Make It Happen”: http://ow.ly/rp6e3057hMN.