Cio Survey2010 Us

in association with

NOW IN

OUR 5

th YEAR

Harvey NasHCIO survey 2010

New decade, New opportuNities?

2 Harvey Nash CIO Survey 2010

Contents

1. Executive summary 62. CIO spotlight 103. Leaders in technology: salary review 134. Survey results 174.1. Global results* 184.2. United States results* 284.3. Europe results* 425. European country and regional profiles 555.1. Belgium 565.2. France 585.3. Germany 605.4. Ireland 625.5. Netherlands 645.6. Scandinavia 665.7. Switzerland 685.8. United Kingdom 706. Conclusions by PA Consulting Group & Harvey Nash 72

* Key areas covered by this survey

Job roles, Reporting lines and board presence, Geography and industry,

Budget responsibility, Key issues, Skills, Innovation and collaboration,

IT budgets, Outsourcing and offshoring, Career and compensation

Copyright harvey Nash plc 2010

3Harvey Nash CIO Survey 2010

Foreword

Welcome to the 2010 CIO Survey

In the fifth year of producing our detailed survey in the U.S. and 12th year of producing it globally, harvey Nash is extremely proud to have delivered a research report that is more insightful and expansive than ever before.

An incredible 2,655 respondents from every corner of the globe invested their time, experience and opinions into helping us produce the 2010 CIO Survey. It has been a phenomenal undertaking, and we are indebted to all the participants and contributors for making this report one of the most extensive studies of its kind in the world.

As such, I would like to thank our ongoing partners at PA Consulting Group for providing their expertise and helping our audience better understand the challenges facing today’s CIO.

In this year’s report, you will be able to see analysis presented on a global basis, compare trends across continents and explore country-by-country overviews.

the results show that the CIO community is currently wrestling with significant pressures as the Great Recession fades into history and a new decade, with a new competitive landscape, emerges.

Offshore destinations for outsourcing, the emergence of new technology models like cloud computing, a redefined skills shortage and even the strategic role of the CIO itself have all been fundamentally changed by the economic crisis.

Regarding CIO career development, evidence suggests that the recession has had a disproportionate impact on remuneration and job satisfaction for some CIOs. the gap between the "haves" and "have-nots" appears to be widening and could point to a significant migration of CIO talent in the coming years.

this report is truly our best yet, and I am sure you will find the results both enlightening and valuable in your own career development and business operations.

Bob MianoPresident & CEOharvey Nash USA


David Bickerton, CIO, British Gas, UKIt’s all about improving customer service. We’ve made a lot of progress, but there’s more to do. Our biggest challenge is satisfying the appetite for business change, but that’s a great challenge to have because we have the people who rise to that challenge.

John Donnarumma, Global CIO, Group M, U.S.there are two 'musts' for a CIO: being able to thrive in a chaotic environment and being able to anticipate the absolute unknown.

Debra C. Robinson, Global SVP/CIO, Hearst Magazines, U.S.Outsourcing/offshoring is one of hearst Digital Magazines' strategic directions to increase productivity and delivery of products. It has allowed us to scale up and down quickly and efficiently.

Karen Forte, CIO & Head of Services, Allianz, Irelandto be able to help your organization batten down and survive the current climate is just as rewarding as delivering the award-winning projects. Being creative in this environment is just as stimulating because the stakes are in fact higher than during the general economic climate that prevailed for the past decade.

Tom Verhulst, CIO, Ziggo, Netherlandsto grow as a department, we need business consultants; people who know the business and who understand It processes and the organization. the priority for CIOs is to

integrate the business and It capabilities.

CIO viewpoints from around the world

Harvey Nash CIO Survey 2010

5Harvey Nash CIO Survey 2010 5

Frans Haverkamp, CIO, Eneco, Netherlands As the economy transitions from recession to recovery, my most challenging topic for 2010 and beyond will be to continue to derive benefit from the cost cuttings of 2008/9, while at the same time supporting the business as it transforms from efficiency-focus to value-creating productivity.

Gary Arthurs, CIO, HMV Group, UKOur markets are undergoing a fundamental shift, so it's essential we drive out value from existing systems to fund accelerated innovation in loyalty and digital offers —the pure hMV and Waterstones loyalty programs are key investments for learning about our customers and interacting with them through social media and direct marketing.

David Henderson, CIO, Daily Mail General Trust Group, UKDaily Mail Group is operating in very challenging business conditions. the It strategy relies on unlocking the potential of the entire team, recognizing delivery, positive attitudeand creativity. talent Management is increasinglybecoming a critical issue for executives globally, andthe ‘war for talent’ does not abate.

Edward Johnson, IT Director, Falcon Bank, SwitzerlandWe hired some of our brightest staff during the recession by successfully communicating the 'brand' of our It vision, which included an aggressive commitment to a fully virtualized global banking environment, working with a CEO who understands the value of a client focused and cost-aware It department, and the idea that technologists need to work with a 'here to serve' attitude, rather than doing 'It for the sake of It'.

CIO viewpoints from around the world

Countries indicated are where the CIOs are primarily based.Harvey Nash CIO Survey 2010


1. Executive summary

New insights

In 2010, the harvey Nash CIO Survey with PA Consulting ‘went global’ with thousands of CIOs from around the world contributing their insight and opinions. to analyze and compare responses on a global basis has created a fascinating report that examines how CIOs and other global leaders in technology view themselves, their function and the challenges they face.

Global salary analysis

the report reflects on as many similarities within the CIO community as differences. the vast majority of global respondents, over 60 percent, experienced a salary freeze in 2009 with about one in 10 seeing a salary cut. Conditions are improving in 2010, and, despite a challenging year for salary inflation, most CIOs are realistic about the need to reflect the fragile economic environment.

Fifty-nine percent of CIOs believe executive remuneration should be restrained until the economic recovery is more stable while 72 percent said they would consider freezing or cutting their own salary to improve the financial stability of their organization.

In analyzing base salaries of CIOs from around the world, it becomes clear that a significant divide exists. Germany and the U.S. come out strongest on remuneration with Belgium and Ireland struggling to retain parity in compensating top It talent. With the new Base Salary Matrix, we have created a comparison tool for the spectrum of leadership roles in technology. the matrix contrasts the average remuneration in each country with peers on a global basis.

All about the CIO

According to most respondents, technology played an important role in the survival of many organizations during the last 12 months. Seventy-four percent of CIOs were asked to focus on cutting costs and 75 percent on increasing operational efficiencies as the recession raged across the globe.

the CIO's reward for their recession-busting performance seems to be a stronger strategic voice and, in many cases, a seat on the operational board. the strategic focus of the CIO is growing; 71 percent of global respondents foresee a greater role in strategy decisions in 2010. to fulfill a wider set of responsibilities, many CIOs are focusing on advancing their skillset through advanced education. Communication and influencing skills are the most important to CIOs according to 81 percent of them while leadership skills, 76 percent, and strategy and planning skills, 57 percent, are also prioritized.

however, career development signals for CIOs are not all positive. Careers were certainly stunted by the recession, and CIOs are now more wary about moving to their next role until the economic environment stabilizes further.

According to most respondents technology played an important role in the survival of many organizations.


Priorities for 2010

As the global economy emerges from recession, there are also a wide range of priorities for CIOs to address in their organizations. Germany, the U.S. and the UK appear to be more proactive in their approach to 2010 and have adopted a greater focus on investment, innovation and overtaking competitors weakened by the recession. In contrast, CIOs in Belgium and France plan to focus on a more cautious strategy of cost control and internal efficiency improvements. Swiss CIOs are planning to put greater energy into clearing the backlog of projects postponed by the recession.

A smaller world

During the course of this research a number of significant differences have been identified about CIOs from around the world. Just as important, however, are the many similarities that were discovered. For example, 44 percent of CIOs now report to the CEO or CFO, more than any other senior executive. the expanded influence CIOs have as a result of their reporting line provides them with a greater understanding of the wider business environment and how technology can be used as a competitive tool in global markets.

Additionally, the impact of the global recession was, well, global. Every organization was affected in one way or another and every CIO faced challenges associated with the recession. Fifty-five percent of the respondents occupy a role with global responsibility and can relate to the difficulties faced by peers on the other side of the world.

Skills for growth

the wider community of CIOs surveyed this year generally agrees that communication and influencing skills are the most important for advancement in a post-recession world. this is balanced with a feeling that a formal MBA or other advanced degree will enhance their ability to compete for more senior positions. Many CIOs used the recession to explore expanding their skills with 59 percent believing an MBA would improve their strategy and planning abilities.

this year the skills shortage has returned to prominence. Fifty-eight percent say they will suffer from a technology skills shortage at some point, up 4 percent on last year. Compared to the global average, the skills shortage is more pronounced in Scandinavia at 72 percent, Switzerland at 71 percent, the U.S. at 68 percent, the Netherlands at 65 percent, Belgium at 67 percent and Germany at 62 percent.

the UK at 56 percent and France at 30 percent appear to be less severely impacted by the skills shortages, which are below the global average. the skills most in demand by CIOs from around the world are business analysis, project management and architecture. the intensity of demand differs by country and region.


This year the skills shortage has returned to prominence.


Innovation and collaboration

Innovation success is improving in all regions analyzed, but 55 percent of CIOs still don’t set innovation targets, creating a significant opportunity to increase success in future.

During the recession, innovation projects were used by many CIOs as a weapon to deliver the cost savings demanded by the organization. however, now many CIOs, 60 percent, are shifting their innovation focus into growth activities and using innovation projects to enhance the quality of products and services. Additionally, 58 percent of global respondents are innovating to speed up the delivery to market of their offering to capitalize on re-emerging growth trends.

two developing innovation models are gaining prominence as CIOs face the world in 2010. Software as a Service (SaaS) will become more important to 35 percent of global respondents this year. In Germany, it will be adopted by 83 percent while in Scandinavia 42 percent of CIOs will be increasing their use of SaaS. Cloud computing is on the agenda of 51 percent of CIOs globally, which is a positive trend. Yet in France, the expected acceptance of a wider cloud model is at a far more positive 78 percent.

half of the respondents this year will collaborate more than last year. It appears that many CIOs realized during the recession that their organizations were somewhat on their own, but that in order to grow this year they will need to collaborate with others. the main barrier to collaborating is now a lack of agreed behaviors between organizations whereas before the recession the key obstacle was the physical dispersion of teams.

Outsourcing

CIOs invested in outsourcing throughout the recession to remain as cost effective and responsive to their organizations' rapidly changing priorities. this year, 87 percent of CIOs will maintain or increase their investment in outsourcing projects, up 11 percent on last year’s sentiment. Globally, the top outsourced functions remain software application development, 62 percent, software application maintenance, 53 percent, and It infrastructure, 53 percent.

the role of India in offshore outsourced programs remains dominant, but the dominance is waning and the rise of Eastern Europe as a preferred hub, especially for European-based CIOs, is undeniable. More than one in 10 global CIOs now undertake offshore activity in Eastern Europe. that figure is significantly higher within those European countries closest to the region.

Job satisfaction: the biggest casualty of the recession

the pay freezes and salary cuts seen in the analysis this year have had a significant impact on the motivation of CIOs around the world. CIOs have seen fewer career opportunities as organizations implemented recruitment freezes and many expressed a sentiment that running projects to save costs is just not as personally rewarding as innovating with technology to pursue growth.


Two developing innovation models are gainingprominence as CIOs face the world in 2010.


these trends have combined to depress job satisfaction on a global basis, which is down 4 percent this year at 76 percent. the situation is worse in selected countries. For example, career fulfillment among CIOs is at 60 percent in Germany and 68 percent in the U.S., down significantly on previous years.

however, the result may not be a mass exodus of dissatisfied CIOs from their current employers. Respondents remain cautious about changing jobs due to the wider economic fragility, but there is also a greater emphasis on non-monetary benefits. CIOs who shared foxholes with their CEOs and CFOs as they led their organizations through the worst of the recession have a greater sense that they’ve earned the right to help shape the next phase of growth.

If employers realize that a greater sense of loyalty exists—at least for now—and invest in the development of their CIOs, they will be able to retain key talent over the next 24 months.

Please note: The 2010 CIO Survey from Harvey Nash is global in nature and was undertaken across many different countries, languages and currencies. For ease of production the currency used is the U.S. Dollar. At the launch of the survey the conversion rate of U.S. Dollar to UK £ Sterling and Euro was $1 = £0.62 and €0.69.


Respondents remain cautious about changing jobs due to the wider economic fragility.


CIOs are unique creatures who are often viewed singularly in the context of their own organizations rather than as a member of a global community of technology leaders. In this new section, we aim to shine a spotlight on the CIO and identify some of their similarities and key differences.

One of the most profound differences concerns the compensation that CIOs receive. this report includes the following section that is dedicated to comparing remuneration by a range of variables. the difference between the highest and lowest average CIO salaries is a significant $46,932. Beyond remuneration, there are key differences in the role and mindset of CIOs around the world. this section compares their strategic influence, job satisfaction, leadership skills and career aspirations in the top 10 regions surveyed.

2.1. CIO strategic influence

At a global level, the CIO is a strategic figure. Fifty percent of CIOs report to the CEO while 26 percent report into the CFO, ensuring they have influence at the highest level. Additionally, 59 percent of CIOs globally sit on the operational board giving technology a prominent voice within their leadership team.

Table 1. CIO strategic role vs. job satisfaction

Rank CountryCIO becoming more strategic Job satisfaction

1 Germany 100% 60%

2 Belgium 83% 98%

3 Scandinavia 81% 97%

4 Netherlands 74% 88%

5 Global average 71% 84%6 UK 71% 83%7 U.S. 68% 78%8 Ireland 67% 82%

9 France 50% 66%

10 Switzerland 46% 73%

there is unanimous agreement from CIOs in Germany that their role is becoming more strategic. Both Belgian and Scandinavian CIOs are also far more likely than the average CIO to adopt a more strategic role this year. Worryingly for CIOs in Switzerland, only 46 percent believe they will be more strategic this year.

With job satisfaction for C-level executives so closely linked to their strategic relevance, it is clear to see that those with a greater appreciation of a more strategic role this year are also more satisfied in their careers. In Germany, the one major exception to this rule, the CIO community agrees that their role is becoming more and more strategic, but CIOs remain unsatisfied with their position.

2. CIO spotlight

We aim to shine a spotlight on the CIO.


Conversely, despite having the lowest strategic input of the countries surveyed, CIOs from Switzerland remain more satisfied in their jobs than French and German peers. UK and U.S. CIOs have a job satisfaction that corresponds with their below-average strategic input.

2.2. CIO skills to succeed

the skills deemed most important by CIOs for career advancement are compared in the table below and are ranked in comparison to their rating given by the global CIO average. the different emphasis on skills given by CIOs in each country can be easily tracked by row.

Table 2. CIO skills rating

CountryCommunication and influencing Leadership

Strategy and planning

Change mgt

ROI oriented

Outsourcer mgt

IT awareness

Belgium 50% 58% 58% 42% 42% 8% 17%

France 70% 60% 50% 30% 80% 30% 0%

Germany 89% 75% 56% 44% 22% 56% 22%

Global average 81% 76% 57% 40% 33% 23% 10%Netherlands 72% 71% 47% 40% 20% 23% 10%Ireland 78% 73% 57% 35% 47% 13% 20%Scandinavia 67% 74% 69% 36% 38% 26% 5%Switzerland 72% 72% 44% 40% 8% 24% 16%UK 87% 73% 61% 43% 37% 23% 10%U.S. 85% 88% 56% 37% 33% 25% 9%

While CIOs globally rate communication and influencing skills highest in importance, this is not the case in Belgium, Scandinavia or the U.S. Leadership is the most highly regarded ability by CIOs in those countries. Swiss and Dutch CIOs place less emphasis on strategy and planning skills than most while French CIOs have a far higher regard for the importance of an ROI focus than their peers. It awareness is the least relevant skill according to the global average, but CIOs in Ireland and Germany still rate it twice as important as the average.

2.3. CIOs on the move

As CIOs around the world emerge from the recession and assess the damage wrought to their project pipelines, their organizations’ growth and their own career prospects, there is a considerable variance in their eagerness to leap into new career prospects.

2. CIO spotlight

The different emphasis on skills given by CIOs in each country can be easily tracked.


Table 3. CIO intent to change jobs

Country Less 1 yr 1 - 2 yr 2 - 5 yr 5 - 10 yr 10 yr +Germany 60% 20% 20% 0% 0%France 44% 12% 22% 0% 22%Switzerland 30% 13% 35% 13% 9%UK 21% 30% 38% 9% 2%Global average 19% 24% 39% 12% 6%Netherlands 19% 26% 39% 12% 4%U.S. 18% 20% 39% 15% 8%Ireland 17% 21% 26% 15% 21%Scandinavia 3% 15% 50% 21% 11%Belgium 0% 11% 56% 33% 0%

CIOs are less likely to pursue a new role than they were pre-recession. German CIOs are the most strategic but also less satisfied with their careers so it is perhaps unsurprising that they are the most likely to move jobs in the next 12 months. French, Swiss and UK CIOs are also more likely than the global average to want to move this year. At the opposite end of the spectrum, Belgian and Scandinavian CIOs have emerged from the recession as the most risk averse regarding career prospects with far fewer CIOs intending to move jobs in the next two years.

CIOs are less likely to pursue a new role than they were pre-recession.

2. CIO spotlight


In this new section to the report for 2010 the base salaries of CIOs and other technology leaders from around the world are analyzed together to provide a snapshot of remuneration trends. the average base salary is compared by geography and by job title. this report also introduces the harvey Nash Base Salary Matrix, which identifies salary hot spots for various countries.

3.1. Average base salary by country

Average salaries are assessed at the country level and the top 10 are provided below in a ranked table. the base salary is calculated using the mean point within the salary range and the total number of respondents per region.

Table 4. Average base salary by country

Rank Country Average base salary1 Germany $175,0002 U.S. $164,1193 Switzerland $158,1404 Scandinavia $152,1635 Netherlands $148,2646 Global average $144,7347 France $137,5008 UK $137,1129 Ireland $129,928

10 Belgium $118,269

those countries that sit above the global average of $144,734 are the Netherlands, Scandinavia, Switzerland, the U.S. and Germany, which leads the salary table by a solid margin. With an average base salary of $118,269 Belgium occupies the number 10 slot with a base salary that is $56,731 below Germany. Ireland, the UK and France also sit below the global average. there is no doubt that a significant difference can exist in your base remuneration depending on which country you operate in.

3.2. Average base salary by job function

the average salary by country, outlined in table 4 above, was categorized generally with a ‘leader in technology’ being determined by a level of management or budget responsibility above a defined threshold. In this sub-section respondents are categorized into the following four groups reflecting their job roles, seniority and scope of responsibility: CIO/CtO, It director/VP, It manager and It professional. the average base salary for these categories is outlined in table 5 on the next page.

A significant difference can exist in base remuneration depending on country.

3. Leaders in technology: salary review


Table 5. Average base salary by job function

Job function Global average base salaryCIO/CtO $166,440

It director/VP $138,711It manager $106,604It professional $106,429

the global average base salary for CIOs is understandably in the upper tier of all technology leaders. Somewhat surprisingly, It professionals without significant management responsibility have an average base salary only $175 less than It managers. One likely reason for this parity is the influence of senior technology consultants in the survey response. While they do not always have a team of direct reports, consultants working for some of the world’s biggest firms can also be some of the best paid individuals in the sector.

3.3. Average base salary matrix

the table below shows where technology leaders within four key categories are placed in the global matrix of core remuneration.

Table 6. Average base salary matrix

Country CIO/CTO IT director/VP IT manager IT professionalBelgium $151,389 $138,542 $88,393 $56,250France $143,750 $143,750 $125,000 N/AGermany $187,500 $150,000 N/A N/AGlobal average $166,440 $138,711 $106,604 $106,429Netherlands $166,667 $139,973 $103,846 $125,000Ireland $159,052 $133,333 $102,574 $87,500Scandinavia $152,334 $164,063 $112,500 N/ASwitzerland $156,522 $156,944 N/A N/AUK $160,256 $126,986 $100,581 $116,667U.S. $190,682 $162,736 $123,512 $108,594

the base salary matrix shows that CIOs and CtOs are best served operating from the U.S. where these leaders can earn an average base salary of $190,682. Germany is also an attractive destination in terms of salary with a slightly lower $187,500 average.

The global average base salary for CIOs is understandably in the upper tier of all technology leaders.



Interestingly, in Scandinavia and Switzerland It Directors/VPs actually have a higher base salary than CIOs. this suggests many of the duties attributed to a CIO in other regions are undertaken by It directors in these countries.

It managers have a six-figure global average base salary and this is the case for all countries where data could be collated except Belgium. the UK, the Netherlands and Ireland joined Belgium below the global average for It managers. France best compensates this group of technology leaders at $18,396 above the global average.

It professionals without management responsibility vary greatly in their base salary. With an average of $56,250, it is realistic to suggest that It professionals from Belgium are more junior team members. Earning $125,000 in the Netherlands and $116,667 in the UK, It professionals in these countries receive a larger base salary than their It managers suggesting these professionals include a greater percentage of highly paid

technology consultants.

IT professionals without managementresponsibility vary greatly in their base salary.



All the latest CIO insight is available now at our new online resource for IT leaders.

www.harveynash.com/CIOSurvey

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4. Survey results


2010 is the first year that harvey Nash has surveyed the CIO community on a global basis. It was a tremendous success with over 2,655 diverse responses from as far afield as London, Warsaw, New York, Cape town, Lahore, Buenos Aires and practically every destination in between.

4.1.1. Job roles: global

Consistent with previous harvey Nash reports, the survey is dominated by CIOs and senior technology managers (Vice President/Director), who accounted for a combined 85 percent of the respondent community.

Figure 1. Breakdown of respondents by job function: global

C-level

Senior management

Mid management

Professional

4.1.2. Reporting lines and board presence: global

the respondent community overwhelming reports to the top executives in their organization with the CEO taking direct management responsibility for almost one-third (29 percent) of CIOs.

Figure 2. Reporting lines of respondents: global

CEO

CFO

COO

CIO

Other

4.1. Global results

2,655 diverse responses from as far afield as London, Warsaw, New York, Cape Town, Lahore, Buenos Aires.

37%

48%

12%

3%

15%

12%

29%

27%

17%


While they are senior executives in their own right, only 42 percent of the global respondent community currently sit on the operational board of their organizations. however, this finding is in line with 2009 results from both Europe and the U.S. and has remained fairly constant since 2007.

4.1.3. Geography and industry: global

Fifty-five percent of respondents have either a global or multinational remit while only 10 percent have responsibility limited to their local markets. Due to the senior level of the audience, this finding is in line with expectations and previous years.

Similarly, the range of industries that respondents represent is consistent with previous harvey Nash studies. Information technology and financial services represent one-third (33 percent) of the total respondent population.

Figure 3. Top industry sectors: global

4.1.4. Budget responsibility: global

While 2 percent of CIOs are responsible for a budget in excess of 1bn dollars, the majority manage budgets in the millions. Fifty percent are responsible for a budget of $10m or less while a further 28 percent manage budgets of $10m to $50m. the remaining 20 percent operate budgets of $50m up to $1bn.

4.1. Global results

2 percent of CIOs are responsible for a budget in excess of 1bn dollars.

0%

5%

10%

15%

20%

Enginee

ring

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Construct

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Broad

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film

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interac

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Pharma

Tran

sport

and lo

gistics

Telec

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Retail

Govern

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Health

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Busines

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servi

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Man

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Other

Finan

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Info

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ion

tech

nology

17%

16%

8%

6%

5% 5% 5%

4%

3%

2% 2%2% 2%

5% 5%


Figure 4. Shifts in strategic responsibility: global

Perhaps unsurprisingly with the scale of It budgets they manage, almost two-thirds (64 percent) of respondents feel the role of the CIO is becoming more strategic within their organizations. this is a similar result to last year’s European research which found that more than 60 percent of respondents felt the role was becoming more strategic. 2009 and 2010 figures reversed the decline of influence perceived between 2006 and 2008, which suggests the recession has not eroded the strategic role of the CIO.

4.1.5. Key issues for technology to address: global

Compared to last year, when cost saving was indubitably the most prominent issue, the key issues the company board is asking the CIO to address in 2010 are less pronounced. As shown in table 7 below, priorities are balanced between keeping costs under control and activities that drive new business opportunities, such as increasing operational efficiency for new orders.

Table 7. Key issues for IT to address: global

Rank Global key issues %1 Increase operational efficiencies 75%2 Cost saving 74%3 Improve business processes 71%4 Innovation 38%5 Developing new products 35%6 Entry to new markets 28%7 Improving price competitiveness 23%8 Green It 15%9 Responding to globalization 15%

10 Mobile commerce 14%11 Other 5%

Two-thirds of respondents feel the role of the CIO is becoming more strategic.

More

Less

Same

64%12%

24%

4.1. Global results


the top three priorities listed are still given significantly more attention compared to what might be considered more long-term ambitions, such as innovation, new product development and entry into new markets. this suggests that a healthy level of caution remains among the global CIO community.

4.1.6. Skills: global

A shortage of key skills is re-emerging as the global economy recovers from the recession. Fifty-eight percent of global respondents this year said they expect to face a skills shortage, which is up 4 percent from 2009 European figures.

Global respondents prioritize a similar spread of skills compared to research from last year, as Figure 5 demonstrates. Business analysis skills are the highest priority, sought by 44 percent of respondents. Project management and architecture skills are also in high demand. Although business analysis has shifted into the number one position, the top three skills from 2009 remain the top three most desired skills in 2010.

Figure 5. Skills most in demand: global

the financial impact of skill shortages is becoming more evident. Sixty-five percent of global respondents said their growth will be impacted or significantly impacted as a result of skills shortages.

When asked how their technology team rated on specific skills, almost two-thirds (65 percent) feel their teams are good or excellent at building and maintaining relationships with the business. Sixty percent are also rated highly for project management skills.

A shortage of key skills is re-emerging as the global economy recovers from the recession.

0%

10%

20%

30%

40%

50%

Other

Securit

y

Service

man

agem

ent

Testi

ng

Developm

ent

IT st

rategy

Business

relationsh

ip

man

agem

ent

Archite

cture

Project

man

agem

entBusin

ess

analy

sis

44%

37%35%

31%

28%

23%22%

21%

16%

6%

4.1. Global results


Table 8. Percentage of staff rated good or excellent in key skills: global

Rank Good or excellent in key issues %1 Building and maintaining relationships with the business 65%2 Managing and prioritizing the It project portfolio 60%3 Planning future It architecture and infrastructure 56%4 Managing and prioritizing demand from the business 54%5 Setting and managing It sourcing strategy 50%6 Envisioning and re-designing business processes 43%

4.1.7. Innovation and collaboration: global

It was seen in section 4.1.5. that innovation remains one of the top priorities for CIOs around the world. Consistent with previous results, a large majority of global CIOs, 83 percent this year, are being asked to provide technology innovation to improve competitive advantage.

While it is encouraging to see technology innovation drive organizations out of recession, it is concerning that over half, 55 percent, of global CIOs are not setting targets for innovation. this may be the reason that 85 percent of the same community only enjoy limited or reasonable success with their innovation projects.

On the global stage this year, it can be seen, in Figure 6, that innovation investment provides the framework for innovation success.

Figure 6. Proportion of IT budget allocated to innovation: global

Innovation investment provides the framework for innovation success.

0%

5%

10%

15%

20%

25%

30%

> 15%9 - 15%4 - 8%1 - 3 %< 1%

15%

26%27%

17%

15%

4.1. Global results


Collaborating to achieve innovation success has also been a hot topic during the recession and into the recovery. Eighty-nine percent of global respondents feel they are successful at encouraging innovation collaboration within their technology teams.

the purpose for collaborating can be related directly to the priorities set by the business (as outlined in section 4.1.5.). Sixty percent collaborate on innovation projects to enhance the quality of projects and services while 58 percent use it to speed up development and delivery of products and services.

Collaboration partners are similar throughout the different regions researched. Figure 7 below shows that suppliers and customers are the two groups favored by most CIOs for collaboration.

Figure 7. Collaboration partners: global

Over one-third of global respondents (35 percent) state there was no trigger to their innovation collaboration activity. however, over half (50 percent) indicate that a change in the market or a change in business focus, such as the recessionary pressures being exerted on most organizations in the past 12 months, triggered their innovation collaboration.

While many global CIOs took advantage of the recession to drive new innovation activity, there are still many barriers to collaborating on innovation projects.

There are still many barriers to collaborating on innovation projects.

0%

10%

20%

30%

40%

50%

60%

Yes,

other

Yes,

with co

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itors

None

Yes,

with pro

fessi

onal

servi

ces f

irms

Yes,

with cu

stom

ers

Yes,

with su

ppliers

56%

34%

30%

21%

12%

5%

4.1. Global results


Table 9. Barriers to collaboration: global

Rank Barrier %1 Lack of agreed behaviors for collaborating 28%2 Resistance among potential users 18%3 Physically dispersed teams 16%4 Concerns about security 13%5 Not being able to find the right people 9%6 technology tools are ineffective 9%

the most severe barrier to collaborative innovation, as identified by global leaders, is a lack of agreed behaviors for collaborating. this has become a more pronounced barrier in the past 12 months and ranked ahead of having physically dispersed teams, which was identified by many last year as the most significant barrier. Resistance from users remains a potent barrier to collaboration as well.

4.1.8. IT budgets, outsourcing and offshoring: global

Although more than a quarter of global CIOs, 28 percent, actually saw an increase in It budget during the recession last year, the majority, 43 percent, saw a budget decline. Looking ahead to the next 12 months, a smaller portion of respondents, 29 percent, anticipate further budget cuts.

Figure 8. 2010 expected IT budget change: global

Although the pressure on It budgets is expected to ease in 2010, a strong focus on cost savings and efficiency remains. the survey findings show that outsourcing and offshore development will play an increasing role in these ongoing efforts.

In this global survey, almost half of the respondents, 48 percent, spend more than 10 percent of their It budget on outsourcing. this is a minor decline from 52 percent last year but remains significant and the majority.

Outsourcing and offshore development will play an increasing role.

Stay the same

Decrease

Increase

43%

29%

4.1. Global results

28%


Expectations for the next 12 months show that over one-third, 36 percent, will increase their spend on outsourcing. this reflects a higher proportion of respondents planning to increase outsourcing activity as recessions end and recoveries emerge. In addition to those increasing their spend in 2010, 51 percent, will maintain their current outsourcing spend, while a minority 13 percent will cut back their outsourcing activity.

the It activity most outsourced continues to be software application development, cited by 62 percent of respondents. It infrastructure outsourcing also remains highly utilized with 53 percent of respondents citing it as part of their outsourcing portfolios.

Figure 9. IT functions outsourced: global

Reflecting previous studies in Europe and the U.S., respondents to this global survey placed cost control at the heart of their outsourcing strategies. thirty-nine percent of respondents make this their highest priority while 35 percent argue that accessing new skills not possessed by the internal It team is the most important reason to outsource.

Outsourcing to offshore locations has never been more popular with 90 percent of global respondents maintaining or increasing their investment in offshore activity this year. the favored destination continues to be India where two-thirds, 66 percent, of global CIOs outsource activity.

however, the dominance of India appears to be eroding while other regions, such as Eastern Europe, are becoming more prominent. Eastern Europe is growing in popularity again this year with 11 percent of respondents locating projects there. the UK held the third position at 10 percent. Meanwhile, emerging destinations such as Vietnam, the Philippines and Brazil are growing in popularity year over year.

the percentage of global respondents whose expectations were not met by offshore work has fallen for the second consecutive year. While those dissatisfied with their offshore partners remains over one-third of the total, at 35 percent (down from 38 percent last year). thirty-seven percent of global CIOs say that offshore work remains a key part of their recession-busting strategies.

Outsourcing to offshore locations has never been more popular.

0%

10%

20%

30%

40%

50%

60%

70

80

KPO

IT dep

artm

ent

HR BPO

IT BPO

Other

System

s inte

gration

IT in

frastr

ucture

Software

applic

ation

main

tenan

ce

Software

applic

ation

develo

pmen

t

62%

53% 53%

22%

14%8% 8% 6%

1%

4.1. Global results


4.1.9. Career and compensation: global

the global recession has forced CIOs to review their career and compensation expectations. Early evidence of this trend was seen in the 2009 harvey Nash survey and the 2010 global survey now confirms it.

CIOs are staying with their employers for longer: 43 percent have been at the same organization for five years or more. the number who have been in their current role for less than a year has dropped to 11 percent from 17 percent last year.

When looking to the future, there is a significant amount of career caution. those global CIOs who are looking to move in the next 12 months are at a historic low of 25 percent. however, within the next two years almost half, 48 percent, plan to be in new jobs.

there is also a slight dip in job satisfaction this year with 77 percent claiming to be fulfilled or very fulfilled in their current role. this figure has historically been above 80 percent in previous years and in all surveyed regions.

Figure 10. Level of fulfillment: global

One in five global CIOs (19 percent) are actively looking for their next job while another 43 percent are open to talking with headhunters about new opportunities.

the top two reasons CIOs give for looking for a new role are the need for a new challenge, stated by 35 percent of respondents; and greater involvement in business strategy, outlined by 24 percent.

Global base salary: Despite the recession, the base salary for CIOs around the globe remains healthy with 82 percent earning more than $100,000 and almost one in five earning over $200,000.

The global recession has forced CIOs to review their career and compensation expectations.

Very fulfilling

Quite fulfilling

Not very fulfilling

Not at all fulfilling

32%

45%

18%

5%

4.1. Global results


The recession has had an impact on the size of bonuses.

Figure 11. Base salary: global

When asked about the impact of the recession on their base salary almost two-thirds, 62 percent, of CIOs say their base salary was frozen in 2009. Another 11 percent received a base salary cut. Seven percent of global CIOs had a base salary cut of less than 20 percent while 4 percent had cuts of more than 20 percent. Over a quarter of respondents, 27 percent, were fortunate enough to have a base salary increase during the last 12 months.

In addition to base salary, the range of benefits offered to CIOs from around the world still includes pensions, car allowances, stock options and bonuses. Bonuses have been in the news often in 2009 and 2010, mainly as a result of the banking industry. however, a bonus remains the benefit of choice for most employers with 81 percent offering one. Sixty-seven percent of CIOs are offered a contributory pension while share options are provided to 40 percent of global respondents.

the recession has had an impact on the size of bonuses with 36 percent of global CIOs having their bonuses reduced this year and a further 19 percent having their bonuses eliminated entirely.

Dissatisfaction with remuneration is higher this year compared to last year with a quarter of respondents, 25 percent, unhappy with their financial package. this is up from 20 percent last year. however, the majority of global CIOs are content and conscious of the fragile economic position their organizations are operating in.

When asked if executive remuneration generally should be restrained until the economic recovery is more robust, a resounding 59 percent agree that salary inflation should remain tightly controlled for the immediate future. In addition, 72 percent say they would consider freezing or reducing their own remuneration to help improve the financial stability of their organizations as they emerge from the recession.

0%

5%

10%

15%

20%

25%

30%

35%

More

than

$200,000

$150,000 - $200,000

$100,000 - $150,000

$75,000 - $100,000

$50,000 - $75,000

Less

than

$50,000

1%4%

13%

34%

29%

19%

4.1. Global results


There has been a subtle shift in U.S. reporting line towards the CEO.

4.2. United States results

4.2.1. Job roles: U.S.

the U.S. contributed a significant number of the respondents to the global survey in 2010. In total, 467 leaders in technology from the U.S. participated, which represents 23 percent of the total respondent population. the number of CIOs from the U.S. contributing to the study is up 31 percent compared to 2009.

Ninety percent of all C-level respondents from the U.S. are senior technology executives describing themselves as either a CIO or CtO.

Figure 12. Breakdown of respondents by job function: U.S.

4.2.2. Reporting lines and board presence: U.S.

With the level of seniority in the U.S. respondent pool, it is not surprising to find that over half, 56 percent, have responsibilities that stretches beyond U.S. shores. A further 31 percent of U.S. respondents have responsibility for technology across North America.

Reporting lines also reflect the seniority of participants with almost one-third of U.S. respondents, 31 percent, reporting to the CEO or CFO. A further 13 percent report to the COO.

there has been a subtle shift in U.S. reporting lines towards the CEO, 15 percent in 2009 to 21 percent this year, and the CFO, 7 percent in 2009 to 10 percent this year. It would appear that during times of recession CEOs and CFOs from the U.S. are determined to manage technology more closely.

C-level

Senior management

Mid management

Professional

30%

49%

16%

5%


U.S. CIOs have greater budget responsibility compared to the global average.

4.2.3. Industry sectors: U.S.

Respondents from the U.S. are scattered across a range of industries.

Figure 13. Top industry sectors: U.S.

Information technology and financial services are the dominant sectors for U.S. respondents, much as they are in the global respondent community. In the U.S., a slightly larger percentage of respondents are from information technology, 20 percent compared to 17 percent globally. healthcare is also more widely represented in the U.S., 8 percent, compared to 5 percent globally.

4.2.4. Budget responsibility: U.S.

U.S. CIOs have greater budget responsibility compared to the global average. Globally, 2 percent of respondents manage a budget in excess of $1bn; however, 5 percent of U.S. respondents have billion dollar-plus budgets to oversee. At the other end of the budget spectrum, 36 percent of U.S. CIOs are responsible for a budget of $10m or less compared to 50 percent globally.

there is more similarity in the middle tier of budget size between U.S. and global respondents. In the U.S., 29 percent manage budgets of $10m to $50m U.S. and globally 28 percent of respondents do. the remaining 30 percent of U.S. respondents operate budgets between $50m and $1bn, compared to 20 percent globally.


0%

5%

10%

15%

20%

Utilitie

s

Publishing

Legal

servi

ces

Hospita

lity

Enginee

ring

Educa

tion

Busines

s ser

vices

Broad

cast,

film

and

interac

tive m

edia

Adverti

sing

and PR

Retail

Pharma

Telec

oms

Man

ufactu

ring

Health

care

Other

Finan

cial s

ervic

es

Info

rmat

ion

tech

nology

20%

15%

10%

8% 8%

6%

4% 4%3% 3%

2% 2% 2%2% 2% 2% 2%


Maintain a vice-like grip over technology spending.

With greater financial responsibility than their global CIO peers, it is somewhat surprising that U.S. respondents don’t enjoy greater strategic influence. Less than one-third, 28 percent, are members of their operational board, far lower than the 42 percent global average.

When asked directly about the strategic influence of the senior technology executives in their organization, almost two-thirds, 64 percent, say they expect the influence to grow in the coming 12 months. however, this is 5 percent lower than 2009 figures from the U.S.

Figure 14. Strategic responsibility: U.S.

4.2.5. Key issues for technology to address: U.S.

Despite the U.S. economy emerging from the global recession faster than many other countries, U.S. CIOs are still being asked to maintain a vice-like grip over technology spending. At the same time, U.S. respondents are being asked to contribute to cost reduction efforts in other areas of the business through the use of innovative It strategies.

Table 10. Key issues for IT to address: U.S.

Rank U.S. key issues %1 Cost saving 77%2 Increase operational efficiencies 74%3 Improve business processes 62%4 Developing new products 44%5 Innovation 43%6 Entry to new markets 26%7 Improving price competitiveness 25%8 Mobile commerce 18%9 Responding to globalization 16%

10 Green It 14%11 Other 6%

More

Less

Same64%

13%

23%



Mobile commerce receives more attention in the U.S.

Cost saving remains the top issue for U.S. CIOs with 77 percent focusing on it this year. Increasing operational efficiencies through technology is an objective for 74 percent. Innovation activities are more important to U.S. respondents with 43 percent naming it a key issue compared with a global average of 38 percent. Mobile commerce receives more attention in the U.S. with 18 percent marking it important compared with 14 percent globally. Green It initiatives are a low priority for both U.S. CIOs and their global peers.

4.2.6. Skills: U.S.

In a repeat of previous U.S. results, the ability to lead, communicate and influence outcomes is almost universally recognized as important or essential for CIOs. Strategy and planning skills remain valued by almost 30 percent more respondents than in-depth It awareness.

Table 11. Skills needed to advance to main board

Rank Skills needed to advance %1 Communication and influencing skills 97%2 Leadership skills 97%3 Strategy and planning 95%4 Market understanding/knowledge 93%5 Customer service 88%6 ROI oriented 88%7 Change management experience 79%8 In-depth It awareness 69%9 Ability to manage relationships with outsourcers 62%

Attaining an advanced degree, such as an MBA, is considered important in enhancing those skills outlined above. For example, 59 percent of U.S. CIOs felt an MBA would enhance strategy and planning skills while over half, 52 percent, felt their ability in financial management, leadership and communication would be improved with an MBA or other advanced degree.

there was a significant increase in the number of U.S. CIOs who believe their organization is suffering from a technology skills shortage. In 2009, 49 percent of respondents agreed that their It function lacked the skills needed to compete. this year that number has jumped to 62 percent–a 13 point hike.

Perhaps as a result of surviving the recession and entering the beginning of the next growth cycle, 68 percent of those who said there was a skills shortage believe it is now influencing the organization’s ability to grow.

the skills most in demand, including business analysis and project management, relate strongly to how technology interacts with the business. Additionally, skills in technology architecture are in short supply according to more than one-third, 37 percent, of U.S. CIOs.



U.S. CIOs are seeing strong innovation outcomes.

Figure 15. Skills most in demand: U.S.

4.2.7. Innovation and collaboration: U.S.

the innovation culture has long been part of the DNA of U.S. technology teams. In fact, 84 percent of U.S. CIOs put innovation at the core of their strategy. this remains in line with peers from around the world who have also embraced technology innovation.

Innovation investment is also consistent when comparing U.S. and global trends. As can be seen in table 12 below, most U.S. respondents, 55 percent, invest 4 percent or more of their It budget in innovation activity. Globally that number is 59 percent.

Table 12. Investment in innovation: U.S. vs. global

% IT budget invested U.S.< 1% 17% 15%1 - 3 % 28% 26%4 - 8% 25% 27%9 - 15% 15% 17%> 15% 15% 15%

Despite investing slightly less in technology innovation than the global average, U.S. CIOs are seeing strong innovation outcomes. Over one-quarter, 26 percent, report innovation ROI of 10 percent or above.

0%

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ng

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pmen

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IT st

rateg

y

Busines

s rela

tionsh

ip

man

agem

ent

Archite

cture

Projec

t

man

agem

ent

Busines

s

analy

sis

40% 39%

37%36%

32%

22%

20%19%

16%

7%


Global average


CIOs from the U.S. are more inclined to collaborate with customers.

Additionally, when it comes to defining the success of technology innovation, a large percentage of U.S. respondents are happy with their results. Almost one-fifth of U.S. CIOs, 18 percent, feel their technology innovation is very successful. A further 51 percent are content with the success of their innovation activity while less than one-third, 31 percent, feel their success has been limited.

Figure 16. Success from innovation activity: U.S.

the majority of U.S. CIOs use collaboration for customer-facing innovation activity. Almost two-thirds, 64 percent, collaborate to speed up the development and delivery of products and services to enhance the customer experience. Additionally, 62 percent collaborate to improve the quality of products and services. Fifty-five percent of respondents cite maximizing resource utilization as an internal uses for innovation collaboration.

Overall, the barriers to collaboration in the U.S. appear less pronounced compared to other regions. While the lack of agreed behaviors for collaborating is the top barrier in the U.S. and globally, less than a quarter of U.S. respondents, 23 percent, rate it as a significant issue compared to 28 percent of global CIOs.

Table 13. Barriers to collaboration: U.S.

Rank Barrier %1 Lack of agreed behaviors for collaborating 23%2 Physically dispersed teams 18%3 Resistance among potential users 17%4 Concerns about security 15%5 Not being able to find the right people 11%6 technology tools are ineffective 7%

When it comes to collaboration partners, U.S. CIOs are collaborating less than their global peers with suppliers. While 46 percent of U.S. respondents work with suppliers on innovation projects, the global average is 56 percent. however, CIOs from the U.S. are more inclined to collaborate with customers, 37 percent in the U.S. compared to 34 percent globally.

Very successful

Reasonably successful

Limited success

51%

31%

18%



2010 and 2011 IT budget outlook for the U.S. is marginally better than the global average.

Figure 17. Collaboration partners: U.S.

According to 39 percent of respondents, the most significant trigger for innovation will be a change in business focus. Organizational focus will continue to change in the upcoming months as the fast-moving recessionary pressures of 2009 continue to evolve into a growing recovery in 2010.

4.2.8. IT budgets, outsourcing and offshoring: U.S.

In line with most of their global peers, U.S. CIOs have seen their budgets frozen or cut in the past 12 months. Slightly more U.S. respondents had their budgets cut, 46 percent, compared to the global average, 43 percent. Just under one-third, 28 percent, of U.S. respondents operated with frozen budgets last year, which was within 1 percent of the global rate of 29 percent.

Looking forward to 2010 and 2011, the It budget outlook for the U.S. is marginally better than the global average. Although 27 percent expect further cuts this year, a wider majority, 46 percent expect flat budgets while another 27 percent in the U.S. expect a budget increase.

Investment in outsourcing by U.S. CIOs remains relatively stable despite the pressures of the global recession and an embryonic recovery. Just under one-third, 29 percent, of U.S. CIOs invest less than 5 percent of their budget in outsourced activities while just over half, 51 percent invest between 5 and 25 percent. With an outsourcing investment rate 6 percent higher than the global average, U.S. leaders seem prepared to bet slightly more on their outsourcing strategies than their international peers.

0%

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other

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mpet

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with pro

fessio

nal

servi

ces f

irms

Yes,

with cu

stom

ers

Yes,

with su

ppliers

46%

37% 37%

20%

13%

5%



A wide range of IT functions continue to be outsourced.

Figure 18. Outsourcing spend predictions over time: U.S.

the proportion of U.S. CIOs indicating they are planning to invest more in outsourcing activity this year is flat at 38 percent. however, there has been a significant drop in U.S. respondents cutting outsourcing projects. Last year 22 percent of U.S. CIOs cut projects as budgets were threatened. this year 15 percent are likely to reduce outsourcing activity, a level similar to 2007/08. It would appear that the majority of respondents are adopting a ‘wait and see’ policy for 2010/2011 with 48 percent holding spending at last year’s levels.

the most important reason to outsource for U.S. CIOs remains cost reduction. Fifty-one percent of respondents rate it as a top priority compared to a global average that is 12 points lower at 39 percent. Providing business flexibility and accessing skills not readily available internally remain important, but the unremitting focus on cost remains definitive in the U.S.

A wide range of It functions continue to be outsourced by U.S. CIOs as shown in table 14 below. By a large margin, software application development is the most commonly outsourced function with 67 percent of U.S. respondents naming it as a function that they outsource.

Table 14. IT functions outsourced: U.S.

IT function outsourced % who outsourceSoftware application development 67%Software application maintenance 57%It infrastructure 45%Systems integration 23%Other 17%It BPO 8%hR BPO 6%It department 6%KPO 1%

0%

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2009/102008/092007/082006/07

Increase

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Stay the same

48%

9%

43% 43% 44%

38%40%

38%

15%

47%

22%

13%



Rising frustration and expectations not being met.

U.S. CIOs outsource to a range of providers, both onshore and offshore. the offshore providers have become a dominant player in many regions and across industries. In fact, 88 percent of U.S. respondents said they were planning to maintain or increase their offshore activity in the next 12 months.

the growth in offshore outsourced projects goes on despite rising frustration with the quality of work undertaken by offshore providers. In the past three years, this study has identified that expectations are met less now than ever before. Projects falling below expectations have almost doubled from 21 percent in 2007 to 38 percent today.

Figure 19. Offshore expectations 2007-2009: U.S.

India still dominates the offshore outsourcing market for 77 percent of U.S. respondents, but this is down from 81 percent last year. With rising frustration and expectations not being met, 8 percent of respondents say they have now taken outsourced projects back onshore to the U.S. Another 17 percent would consider it. Eight percent of U.S. respondents have taken work to China, 6 percent to the Philippines, 5 percent to Eastern Europe and 1 percent to Vietnam.

4.2.9. Priorities in 2010: U.S.

In a new section to this report, CIOs were asked to gauge their priorities for 2010 with specific regard to the objectives to be pursued as their organizations emerge from the recession.

Table 15. Priorities for 2010: U.S.

Rank U.S. 2010 priorities %1 Further cost reduction 34%2 Actively looking to invest, innovate and overtake weakened competitors 31%3 Clearing a backlog of projects 21%4 Maintaining business as usual with minimal new initiatives 14%

0%

10%

20%

30%

40%

50%

60%

70%

80%

2009/102008/092007/08

Met expectations

Fell below expectations

Exceeded expectations

73%

21%

68%

58%

38%

4%

27%

5%6%



Only 15 percent will not be utilizing any SaaS approach in 2010.

the majority of U.S. respondents seem fairly evenly split between those looking to emerge from the recession by actively investing, innovating and overtaking recession-weary competitors, 31 percent, and those who continue to adopt a cautious fiscal approach to their business operations with additional cost cutting, 34 percent.

A further one in five U.S. respondents, 21 percent, is focusing part of 2010 on clearing the backlog of projects, which was stalled by the recession. the final 14 percent plan to continue business as usual, albeit with minimal costly new initiatives.

Encouragingly, 28 percent of U.S. CIOs say their ROI from It projects was unaffected by the recession. A further 24 percent say they expect to see ROI in the next two years from projects initiated during the recession.

With regard to the use of Software as a Service (SaaS) in 2010, the responses indicate that the approach is growing in popularity. Only 15 percent will not be utilizing any SaaS approach in 2010 while 42 percent will be delivering some products or services via SaaS. thirty-nine percent say they will be delivering more projects via SaaS in 2010 than in 2009.

Figure 20. Use of Software as a Service in 2010: U.S.

None, we run all applications in-house

Some, but not more than we do already

More than we do already

We want to move to a mainly SaaS model

15%

42%

39%

4%



60 percent of U.S. respondents are pursuing a wider cloud computing approach in 2010.

A strong majority of U.S. CIOs will develop a wider cloud computing approach in 2010.

Figure 21. CIOs considering a wider cloud computing approach in 2010: U.S.

there are a range of reasons why 60 percent of U.S. respondents are pursuing a wider cloud computing approach in 2010. Achieving greater flexibility for their organization is one reason given by 61 percent of those adopting more cloud computing initiatives. Fifty-seven percent are pursuing the same strategy to reduce costs while 40 percent are looking for cloud computing to increase operational efficiency. Finally, 26 percent are looking to cloud computing as a way to better pursue new technology developments.

the communication priorities for U.S. CIOs in 2010 reflect a more traditional, face-to-face approach for internal messaging versus heavy online and social networking usage.

Table 16. Internal communication priorities in 2010: U.S.

Rank U.S. internal communication priorities %1 Regular update meetings 72%2 Regular update e-mails 68%3 Corporate intranet 66%4 Social networks 25%5 Corporate blog 22%6 Personal blog 11%7 No internal communication plan for It 7%

Seven percent of U.S. CIOs have no internal communication plan, and fewer than 25 percent use personal blogs, corporate blogs and social networks.

Yes

No

60%

40%



U.S. CIOs 'hunkered down' in their existing roles during the past 12 months.

4.2.10. Career and compensation: U.S.

U.S. CIOs ‘hunkered down’ in their existing roles during the past 12 months to ride out the global recession. this is not unexpected and is in line with wider global trends where the churn of senior technology leaders has fallen as both individuals and businesses focused on getting through the worst economic crisis in a generation.

Figure 22. Length of time with current employer, last three years: U.S.

Only 7 percent of U.S. respondents have been employed less than one year with their current organization, compared to 11 percent last year. those who have been with their employer less than 24 months also dropped from 21 percent in 2009 to 13 percent this year.

U.S. CIOs in the midrange of tenure (two to five years) had the biggest population growth, up from 22 percent last year to 32 percent now. there are fewer U.S. respondents in the longest tenure category (more than 10 years), dropping from 27 percent to 23 percent, possibly as a result of early retirement departures due to the difficult business environment.

Although the recession continues to bite in many regions and across industries, the U.S. began to emerge from the recession at the end of Q3 last year. this has led to a relative normalization of career ambition for the next 12 months within the U.S. CIO community. Nineteen percent of respondents are planning a career move in the next year with a further 19 percent planning to move in the next 24 months. While this is slightly below the global average of 25 percent looking to move during the next 12 months and 23 percent looking over the next 24 months, it is in line with previous U.S. trends.

the recession has also impacted job satisfaction for U.S. CIOs despite the fact that it has been on a steady decline since 2006. In that year, 88 percent of U.S. CIOs said they were fulfilled or very fulfilled in their role. In 2007, it dropped to 79 percent and in 2008 to 75 percent. Last year, it fell another 6 percent to 69 percent.

0%

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2007/08

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21%

13%

27%

22%

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25% 25%

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19%



Salaries of U.S. CIOs have remained robust during the recession.

Because the trend has continued in good and bad times, it cannot be wholly attributed to running a technology function in a recession. It more likely reflects the desire of many U.S. CIOs to play a more prominent business strategy role, which was given by 28 percent of U.S. respondents as a reason for looking for a new role.

the percentage of U.S. CIOs currently looking for a new role is 6 percent higher compared to last year’s figures and is at 16 percent today. In addition, 28 percent of respondents say they are seeking a new job in order to have greater involvement in business strategy, while another 28 percent are looking for a fresh challenge. to that end, 39 percent of U.S. respondents would take a call from a headhunter with an interesting role.

Salaries of U.S. CIOs have remained robust during the recession and are also healthier than those of their global peers.

Figure 23. Base salary: U.S. vs. global

there are more global CIOs in the lower and median base salary categories, up to $150,000 per year. In the top two tiers, however, U.S. CIOs far outweigh the global average. thirty-four percent of U.S. respondents earn a base salary between $150,000 and $200,000. Finally, 33 percent of U.S. CIOs, 14 percent more than the global average, enjoy a base salary of more than $200,000.

twenty-nine percent of U.S. CIOs benefited from a base salary increase in the last 12 months, while the majority, 60 percent, had their base salaries frozen. this is broadly in line with global averages. Eleven percent of U.S. respondents had their base salaries cut during the recession, while 4 percent experienced a cut of more than 20 percent.

0%

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More than $200,000$150,000 - $200,000$100,000 - $150,000$75,000 - $100,000$50,000 - $75,000Less than $50,000

U.S.

Global

1% 1% 1%

4%3%

13%

27%

34%35%

33%

19%

29%



Fifty-eight percent agree that executive remuneration generally should be restrained.

Bonuses remain a benefit enjoyed by 85 percent of U.S. CIOs. the major difference in benefits between U.S. CIOs and their global peers is the preference for share options or equity, offered to 58 percent of U.S. respondents versus a global average of 40 percent. A company car is offered to only 12 percent in the U.S. versus a global average of 50 percent. Considering the cuts to base salary and scaled-back benefit packages last year, it is perhaps unsurprising that satisfaction with remuneration is down from 84 percent to 73 percent this year.

U.S. respondents recognize that in extraordinary economic circumstances sacrifices are needed by all. Fifty-eight percent agree that executive remuneration generally should be restrained until the economic recovery is more robust. In fact, 70 percent would consider freezing or reducing their own remuneration further to help improve the financial stability of their organization.



4.3.1. Job roles: Europe

European countries generated the largest proportion of respondents to the global CIO survey. A total of 1,491 European technology leaders took the time to analyze their priorities, their teams and their own careers by participating in this survey. this response is up 11 percent from 2009, which was also a record-breaking year.

European respondents to the survey hold high seniority in their organizations.

Figure 24. Breakdown of respondents by job function: Europe

4.3.2. Reporting lines and board presence: Europe

As a result of the seniority displayed above, it is no surprise that European CIOs report to the most senior executives in their organizations. Almost one-third, 32 percent, report directly to the CEO. Almost one in five, 17 percent, report to the CFO and a further 11 percent report to the COO.

there is no change in the board representation for European CIOs compared to figures from 2009. Previously 46 percent of European respondents sat on their operational board while 54 percent did not. this is unchanged in 2010.

Possibly as a result of a narrowing focus during the recession, European CIOs are less global in outlook than in previous surveys. In 2009, 34 percent of respondents had a global remit compared to 28 percent this year, a drop of 6 percent. European respondents are also less global in their scope of responsibility this year when compared to U.S. respondents, 44 percent of whom operate globally.

A total of 1,491 European technology leaders took the time to analyze their priorities.

C-level

Senior management

Mid management

Professional (non-managerial)

39%

46%

12%

3%

4.3. Europe results


4.3.3. Industry sectors: Europe

Much like their peers in other regions, European CIO respondents come from the dominant industries of financial services and information technology. Both have been the most profiled industry sectors year after year in the survey. With 16 percent of respondents coming from each European sector this year, this is also in line with expectations.

technology leaders from the public sector and government departments remain an important community and are boosted in numbers by stimulus spending packages. Manufacturing has dropped from representing 10 percent of the respondent population in 2009 to 6 percent today.

Figure 25. Top industry sectors: Europe

4.3.4. Budget responsibility: Europe

Fifteen percent of European CIOs have a budget of less than $1m in size, which is in line with the global average of 14 percent. the largest group, 39 percent of European respondents, has a budget responsibility between $1m and $10m, which is slightly above the global average of 36 percent.

At the higher end of the budget categories, European CIOs are less represented than their U.S. peers. While 13 percent of the U.S. respondents operate a budget between $25m and $50m, only 10 percent of European CIOs do. Nine percent of U.S. CIOs are responsible for a $50m+ budget compared to only 6 percent in Europe.

Technology leaders from the public sector and government departments remain an important community.

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At the very large budget level, twice as many U.S. CIOs operate a budget bigger than $250m, 6 percent compared to 3 percent in Europe. And while 5 percent of U.S. respondents are in the billion dollar budget club only 2 percent of Europeans have a similar responsibility.

Sixty-four percent of European respondents say the role of the CIO is becoming more strategic. this is exactly the same as U.S. CIOs as well as CIOs in other regions that make up the global average.

More importantly to European CIOs, the 64 percent of respondents who see the CIO role as becoming more strategic is a repeat of 2009’s response, which had stemmed a three-year decline in perceived importance that is charted in Figure 26 below.

Figure 26. Strategic responsibility of the CIO: Europe 2006-2010

4.3.5. Key issues for technology to address: Europe

In a surprising development, cost savings is no longer the top issue being addressed by European CIOs. As economies emerge from the recession across Europe, it appears that the work of preparing the business for growth and maximizing operational efficiencies are top of mind for European respondents.

64 percent of European respondents say the role of the CIO is becoming more strategic.

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Table 17. Top five key business issues for CIOs: Europe vs. U.S.

Rank Business issue EU % prioritize U.S. % prioritize1 Increase operational efficiencies 75% 74%

2 Improve business processes 74% 62%3 Cost saving 73% 77%4 Innovation 37% 43%5 Developing new products 32% 44%

the top five business issues for technology to address are the same in Europe and the U.S., but the focus given to each differs slightly. It would appear that U.S. CIOs remain a little more cost-sensitive to business planning in 2010 compared to their European peers. At 75 percent, the top issue for European CIOs is increasing operational efficiencies. this compares to outright cost saving, which is a priority for 77 percent of U.S. CIOs.

4.3.6. Skills: Europe

European CIOs have long recognized the importance of communication and influencing skills in their senior executive advancement. this year is no exception with 77 percent of respondents believing those attributes are needed for promotion. Similar to previous years, leadership skills are also identified as essential by almost three-quarters, 71 percent, of respondents. these responses are in line with thinking in the U.S. and the global average.

however, the role of executive education in CIO advancement identified a stark difference in the value between European and U.S. respondents. While both agree that an MBA can enhance strategy and planning skills, 59 percent of Europeans and 62 percent of U.S. respondents respectively, there is no such agreement in the ability of an MBA to improve communication or leadership ability. In Europe only 42 percent of CIOs feel executive education can promote better leadership, compared with almost double, 80 percent, in the U.S. Similarly, only 39 percent of Europeans think communication and influencing skills are improved while a whopping 82 percent of U.S. CIOs feel they are enhanced.

More than half of European respondents, 56 percent, believe their organization is suffering from a skills shortage, up 2 percent from last year. While there is certainly a growing awareness of a skills shortage in Europe, it is less pronounced than among the 62 percent of U.S. CIOs who are currently concerned about a lack of skills. When it comes to the impact on the organization that a skills shortage will have, the U.S. and Europeans differ again, albeit this time only marginally, as can been seen in Figure 27 on the next page.

The top issue for European CIOs is increasing operational efficiencies.

4.3. Europe results


Figure 27. Impact of skills shortage on organization: Europe vs. U.S.

Business analysis skills are in most demand by European CIOs, 46 percent. Project management ability is sought by 36 percent of respondents and architecture skills by 34 percent. the most significant difference in skill shortages is in It strategy where 36 percent of U.S. CIOs believe it is lacking in their organization compared to only 25 percent of European leaders.

Managing relationships with other parts of the business remains the most important skill for the It team as a whole, identified by 65 percent of European respondents. that number is down slightly from 67 percent last year.

4.3.7. Innovation and collaboration: Europe

Innovation activity is down in Europe this year. While the percentages are marginal and one could point to urgent operational focus required during a recession, the downward trend is a concern.

Figure 28. Innovation demands: Europe, 2010 vs. 2009

Innovation activity is down marginally in Europe this year.

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4.3. Europe results


the U.S. undertakes more targeted innovation, 34 percent versus 26 percent in Europe. however, when it comes to measuring successful innovation, 73 percent of European CIOs have seen success while only 69 percent of U.S. respondents give the same view.

European respondents invest a greater percentage of their It budget in innovation projects compared to their U.S. peers and slightly more than the global average. Sixty percent of European CIOs invest more than 4 percent of their It budget on innovation projects, compared to 55 percent in the U.S. and a global trend of 59 percent.

higher investment levels can partly describe the more positive outlook European CIOs have for their It innovation activity. Knowing they are committing a sizeable chunk of their It budget to innovation projects may give these leaders a sense of successful activity, even though they are undertaking innovation in a less targeted way than their U.S. peers.

Table 18. ROI from innovation activity: Europe vs. U.S. vs. global average

ROI from innovation Europe U.S.None 14% 12% 14%< 5% 28% 28% 28%5 - 10% 33% 34% 33%> 10% 25% 26% 25%

the results in the table above suggest that while European CIOs may ‘feel’ they are enjoying more success from innovation than their peers in other parts of the world, the U.S. is actually achieving slightly better ROI from innovation activity.

Innovation collaboration was an established culture in Europe ahead of the recession and 88 percent of European respondents believe they have undertaken successful innovation collaboration this year also. Innovation collaboration rates were down only 2 percent on pre-recession figures.

Almost two thirds, 59 percent, of European CIOs make collaborating with other organizations to enhance the quality of products and services a top priority. In comparison, U.S. respondents place speeding up the delivery of products and services as their top innovation collaboration activity at 64 percent.

the preferred collaboration partners for European CIOs remain suppliers, as it was last year. their popularity has grown in the past 12 months with 59 percent of European respondents working with suppliers this year compared to 54 percent last year. Customers are collaboration partners for just under one-third of European CIOs, 32 percent.

They are undertaking innovation in a less targeted way than their U.S. peers.

4.3. Europe results

Global average


Choosing to collaborate with professional services firms is a key difference between U.S. respondents, 37 percent, and European respondents, 28 percent.

For European CIOs, barriers to innovation collaboration are more significant this year.

Figure 29. Barriers to innovation collaboration: Europe, 2010 vs. 2009

With the exception of physically dispersed teams, all the barriers are more pronounced this year than during the recession. Concerns about security have increased significantly with 13 percent now citing it as a major barrier. Almost one-third now feel that lacking agreed behaviors for collaboration will limit or prevent future innovation collaboration success.

As the recession becomes recovery for many European CIOs, the main trigger for innovation collaboration has become a changing business focus. thirty-nine percent stated it was their own business focus that created the opportunity for collaboration while one in five, 20 percent, referred to changes in the market.

Concerns about security have increased significantly.

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4.3. Europe results


4.3.8. IT budgets, outsourcing and offshoring: Europe

It budgets in Europe remain under severe pressure with 43 percent experiencing budget cuts in the last 12 months. A further 29 percent had frozen budgets. Although the environment seems to be improving, and budget figures suggest this, 30 percent of European CIOs still expect to be operating with lower budgets this year and 41 percent expect no new investment.

the budgetary environment has become one of the most influential factors in the drive towards outsourcing and offshoring for European CIOs. After a period of innovation-led outsourcing, much of the activity today focuses on cost cutting.

Outsourcing remains a core strategy for many European respondents with 87 percent saying they will maintain or increase investment in outsourced activity this year. It appears that European CIOs are bullish with 11 percent investing more than 50 percent of their It budget in outsourced activity compared with only 6 percent of U.S. respondents.

thirty percent of Europeans invest less than 6 percent of their overall It budgets in outsourcing, which is in line with 29 percent of U.S. CIOs. those who invest between 5 and 10 percent of budget are the same in both regions at 22 percent.

Figure 30. IT functions outsourced: Europe

the top three functions to outsource according to European CIOs—software application development, It infrastructure and software application maintenance —remain unchanged from last year, although software application maintenance is up 5 percent this year at 52 percent compared to 47 percent last year.

IT budgets in Europe remain under severe pressure.

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While the largest group of European respondents, 37 percent, state that accessing skill sets not possessed by the internal It team is their reason to outsource this year, the need to reduce costs is never far from thought and was prioritized by 35 percent of European CIOs.

the outlook for offshore outsourced activity looks positive for the next 12 months. Almost one third, 29 percent, indicate that they will increase their offshore activity this year while a larger group, 62 percent, will maintain their investment at current levels.

however, 9 percent plan to reduce their offshore work this year either as projects come to a close or as European CIOs choose to return some activities to an onshore or in-house model.

When asked explicitly if they would consider relocating offshore projects back to onshore providers to boost local economies, only 12 percent said they would consider it. this would suggest that the cost benefit of overseas locations remains very important to European CIOs.

Figure 31. Moving offshore projects onshore: Europe

the reliability of offshore providers may affect the above decision over the coming months and years. More than one-third of European respondents, 34 percent, claim that projects undertaken offshore fail to meet expectations. And while satisfaction levels are met for 61 percent of European CIOs, only a small 6 percent have their expectations exceeded.

Similar to U.S. respondents, the majority of European CIOs offshore their projects to India. however, while 77 percent of U.S. CIOs use India as a base only 62 percent of Europeans do. the proximity of low-cost centers in Eastern Europe will certainly be a factor as 13 percent of European CIOs base offshore projects there.

the UK remains a popular outsourcing hub for 13 percent of European respondents while U.S. decision makers prefer China by an 8 percent to 3 percent margin.

The outlook for offshore outsourced activity looks positive.

Yes

No

4.3. Europe results

12%

88%


4.3.9. Priorities 2010: Europe

After a tumultuous 12 months during the global recession, harvey Nash survey experts decided to add this section to the report in order to explore how the priorities for European CIOs will evolve as their organizations emerge from the stormy clouds of recession into a brighter scene of recovery and growth.

Table 19. Priorities for 2010: Europe

Rank EU 2010 priorities %1 Further cost reduction 32%2 Actively looking to invest, innovate and overtake weakened competitors 32%3 Clearing a backlog of projects 21%4 Maintaining business as usual with minimal new initiatives 16%

Similar to their U.S. peers, European CIOs are balancing 2010 with a continuation of tight cost control (which includes further budget reductions in some cases) with more aggressive activities added to capitalize on emerging growth opportunities. In the case of the Europeans, both priorities were given prominence by 32 percent of respondents.

Clearing the backlog of projects stalled by the recession will be a priority for one-fifth of European CIOs, 21 percent, while 16 percent are planning to spend 2010 in a 'business as usual' mindset.

Encouragingly, almost one-third of European respondents claim the recession has had no impact on their technology project ROI. For others however, the recession has left a damaging legacy. Seventeen percent expect to recover the ROI lost during the recession in the next 12 months while another 22 percent of European CIOs say it will take between one and three years to recover. For 3 percent it may take more than three years to recover the ROI lost.

European CIOs also plan to use Software as a Service (SaaS) to enhance ROI in 2010.

Figure 32. Use of Software as a Service in 2010: Europe

Organizations emerge from the stormy clouds of the recession.

None, we run all applications in-house

Some, but not more than we do already

More than we do already

We want to move to a mainly SaaS model

4.3. Europe results

29%

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For 29 percent of European CIOs, there will be no SaaS activity in 2010. For the remaining 71 percent, SaaS will play a role in their strategy but not necessarily a significant one. A third of respondents will increase their activity, and within that group 4 percent plan to move to a mainly SaaS model. the remaining 38 percent will continue to use SaaS but at existing levels.

2010 will also see the role of cloud computing become more prominent for European CIOs, but the decision to adopt a cloud computing platform will lag behind U.S. peers.

Figure 33. Adoption of cloud computing platform: Europe vs. U.S.

In the next 12 months, 48 percent of European respondents will consider adopting a cloud computing platform compared to an overwhelming 60 percent of U.S. CIOs.

Added flexibility was given as the reason why 61 percent of European CIOs are considering cloud computing while 56 percent of European respondents also believe the platform will add to other cost-saving initiatives in 2010.

When asked about their internal communication priorities for 2010, European and U.S. CIOs expressed similar approaches with a higher dependence on face-to-face meetings and existing company infrastructure. Seventy percent will use a combination of the company intranet and physical meetings while 60 percent will use regular e-mails.

Blogs and social networks do not yet feature strongly in the internal communication plans for European CIOs with only 18 percent considering using a blog and 24 percent planning to communicate via social networks.

The decision to adopt a cloud computing platform will lag behind U.S. peers.

4.3. Europe results

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4.3.10. Career and compensation: Europe

2009 was not a year of great career churn for European CIOs. In fact, those respondents moving jobs within the last 12 months fell to the lowest level recorded, 13 percent. the largest group, 30 percent, has been with their current employers since before the recession, between two and five years.

this is not particularly surprising considering the environment in which CIOs have been operating. Looking forward, however, an increase in career churn is expected this year. European CIOs themselves are indicating they are ready to move.

More than a quarter, 26 percent, will be looking for their next career move in the next 12 months. this is in line with the global average, 25 percent, and slightly higher than the churn expected in the U.S., 19 percent.

Within 24 months more than half of European CIOs, 51 percent, expect the global economy to have recovered sufficiently to attract them into a new role outside their current organization. the majority of European respondents are fulfilled in their current role. While 79 percent say they are quite or very fulfilled with their job, this is unchanged from 2009 and down from highs of 84 percent in 2006.

Table 20. Level of fulfillment: Europe, 2009 vs. 2010

Rank EU fulfillment 2010 2009

1 Very fulfilling 33% 33%2 Quite fulfilling 46% 46%3 Not very fulfilling 16% 17%4 Not at all fulfilling 5% 4%

thirty-eight percent of European CIOs are seeking a fresh challenge from their next role while almost one-quarter, 23 percent, are looking for more involvement in business strategy. A seat on the board is an ambition for 9 percent while a better work-life balance is only sought by 7 percent of European respondents.

Activity levels in seeking the next role remain depressed after the recession with one-fifth of European respondents, 21 percent, actively looking for the next career move. A further 44 percent would entertain a call from a head-hunter while another quarter, 27 percent, are passively watching the market.

European CIOs are indicating they are ready to change jobs.

4.3. Europe results


Base salaries for European CIOs are closely in line with the global average but lag behind their U.S. peers at the most senior level.

Figure 34. Base salary: Europe vs. global average vs. U.S.

the majority of European respondents, 36 percent, earn within the $100,000-$150,000 base salary range. A further 28 percent enjoy base salaries between $150,000-$200,000.

What is clear, however, is that at the upper tiers the U.S. CIOs dominate the base salary rankings. there are more than double the number of U.S. CIOs than Europeans in the top salary bracket of $200,000+ per year.

Eleven percent of European CIOs have taken a base salary cut while 63 percent have had their salaries frozen. this is in line with U.S. and global figures and considering the base salary values in the previous figure, it suggests European salary inflation occurred well before the recession.

Bonuses are enjoyed by 79 percent of European CIOs. Almost one-third of bonuses, 29 percent, amounts to between 10 percent and 20 percent of base salary. this is flat compared to previous years. A contributory pension is offered to 74 percent of European CIOs and 62 percent benefit from a company car.

the recession has forced the elimination of bonuses for one-fifth, 20 percent, of European CIOs, while a further 34 percent have seen bonuses reduced. this has had an impact on compensation satisfaction with 75 percent satisfied with their remuneration, down 5 percent from last year.

Finally, when asked if they would consider freezing or reducing their own remuneration to help improve the financial stability of their organization as it emerges from the recession, 73 percent said they would be prepared to do so. this is in line with U.S. sentiment, 70 percent, and the global trend, 72 percent.

Base salaries for European CIOs are closely in line with the global average.

4.3. Europe results

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5. European country and regional profiles

55


About the respondents

Over two-thirds, 67 percent, of Belgian respondents have an international focus in their current role. One in five, 21 percent, report directly to the CEO. Sixty-seven percent of Belgian CIOs do not currently sit on the operational board, a higher proportion than the 58 percent of global respondents, suggesting lower recognition of their seniority.

Skills

Regarding their own skills, Belgian CIOs are less focused on communication and influencing skills, 54 percent, compared to the global average of 78 percent. they are more intent on developing their strategy and planning abilities, which 68 percent believe will be enhanced by an MBA or similar.

the skills shortage is more pronounced in Belgium and its impact is felt stronger here than in other regions. Figure 35 shows the level of concern. Sixty-seven percent of Belgian respondents said growth will probably be slowed by the shortage of skills this year, compared to 54 percent globally. Project management skills are most in demand by Belgian organizations, 53 percent, while architecture and business analysis are sought by 43 percent of respondents.

Figure 35. Skills shortage impacting growth: Belgium vs. global average


Encouragingly, 85 percent of Belgian CIOs continue to place innovation and collaboration at the heart of their technology strategy, up two percent on last year’s figures. Innovation success is also leading to higher investment. Eighteen percent of Belgian respondents say they will invest more than 15 percent of their It budget this year on innovation activity, which is 3 percent higher than the global average.

Only 7 percent believe their innovation collaboration has been unsuccessful while 60 percent have collaborated successfully to enhance the quality of product and services. In line with global sentiment the main barrier to successful innovation collaboration is a lack of agreed behaviors, referred to by 37 percent of Belgian CIOs.

5.1. Country profile: Belgium

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5.1. Country profile: Belgium

2010 prioritiesBelgian CIOs are going to be more focused on cost cutting this year. thirty-seven percent will make it a priority compared to 32 percent globally. the recession also has pushed ROI on technology back between one and three years for more than a quarter of Belgian respondents, 26 percent. however, focus will be given to SaaS as a means to return ROI quicker by 30 percent of respondents, while 56 percent of Belgian CIOs will also turn to cloud computing to help.

IT budgets, outsourcing and offshoringWith 73 percent of Belgian respondents expecting frozen or declining It budgets in the forthcoming 12 months, it is not surprising that cost-effective outsourcing remains important. thirty percent of Belgian CIOs will increase investment in outsourcing this year while another 54 percent will maintain investment.

Software application development remains the most popular outsourced resource for another year by 76 percent of Belgian respondents, with 54 percent also outsourcing application maintenance. Offshore It work in Belgium is overwhelmingly sourced to India, 82 percent, and Eastern Europe, 18 percent. however, Vietnam and the Philippines are both emerging offshore hubs for Belgian CIOs.

Career and compensationthe impact of the global recession is seen in the career churn of Belgian CIOs. It is significantly lower than in previous years.

Figure 36. Time expected to stay with current employer: Belgium 2009 vs. 2010

the percentage of Belgian CIOs planning to leave their current employers within the next 12 months has dropped 18 percent while those planning to stay for up to two years has risen by 20 percent. this trend is not necessarily driven by dissatisfaction. Eighty-eight percent say they are fulfilled in their role. however, 78 percent would consider roles if they were presented to them.

Base salaries of Belgian CIOs have been affected by the recession with 64 percent experiencing a base salary freeze and 13 percent accepting a base salary cut. Base salary levels sit below the global average and remuneration satisfaction dropped 10 percent to 77 percent this year. that said, 63 percent would still be willing to consider freezing or reducing their own remuneration to help improve the financial stability of their organization.

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French CIOs have a broad scope of responsibility, including 57 percent who have international roles. Board representation for French CIOs, at 38 percent, is slightly lower than the global average of 42 percent. however, 64 percent of French respondents see the role of the CIO becoming more strategic in the coming 12 months.

Skills

the need to increase operational efficiency was rated the top priority by 90 percent of French CIOs, higher than the 75 percent it received globally. As such, the skills in demand to meet these objectives fall into two categories: It strategy skills, 57 percent, and architecture skills, 43 percent.

French respondents are less concerned about a skills shortage compared to their global peers. Only 30 percent of French CIOs believe their organization’s growth will be impeded by a skills shortage this year compared to 58 percent globally, as is shown in Figure 37 below.

Figure 37. Skills shortage 2010: France vs. global average


Innovation activity remains important to It strategy for 55 percent of French CIOs, but this is significantly below the 83 percent global average. this may be the result of greater importance placed on day-to-day operational priorities during the recession, but there also appears to be a lack of innovation projects in the pipeline for 2010.

When innovation collaboration is undertaken in France, it is most often with both suppliers and customers, 44 percent each. Innovation projects are completed with a goal to speed up the development and delivery of products and services by 75 percent of French CIOs.

French respondents

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2010 Priorities

Further cost reduction will be the highest priority in 2010 for the majority, 56 percent, of French respondents. Global CIOs are more pessimistic about the impact of the recession on It projects than French CIOs. Only 11 percent of French respondents believe ROI from projects will be delayed between one and three years compared to 22 percent globally.

One reason for the greater optimism shown by French respondents for generating ROI in 2010 may be the openness with which they have embraced Software as a Service (SaaS) and cloud computing. Fifty-six percent of French respondents plan to undertake more SaaS activity this year compared to 31 percent globally. Similarly, cloud computing will play a greater role for 78 percent of French CIOs compared to 51 percent globally.

Figure 38. Use of greater SaaS and cloud computing in 2010: France vs. global average

IT budgets, outsourcing and offshoring

It budgets remain under pressure in France. Fifty-six percent of respondents experienced budget cuts last year and a similar number expects further declines this year. Despite tight budgets, more than two-thirds of French CIOs, 67 percent, will increase outsourcing spend this year. Cost reduction benefits, 33 percent, and accessing a wider array of competitively priced skills, 38 percent, are the outsourcing objectives of French respondents.

Software application development, 44 percent, and software application maintenance, 67 percent, are among the top outsourced It functions alongside human Resource outsourcing, 56 percent.

Career and compensation

Although more than half, 56 percent, of French CIOs have been with their organizations for more than 10 years, there is a willingness to consider moving to a new role once economic stability returns. two thirds would potentially change jobs in the next two years. Job satisfaction is 10 percent lower than the global average at 67 percent. Over one in five, 22 percent, of French CIOs earn more than $200,000 in base salary and a further 67 percent earn more than $100,000. Base salary freezes have affected more French respondents than the global average, 89 percent compared to 62 percent. however, salary cuts are far higher in regions other than France.

In a reversal of the global trend, only 22 percent of French CIOs would consider freezing or reducing their remuneration to help improve the financial stability of their organization compared to 72 percent of CIOs globally.

IT budgets remain

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51%



German respondents to the 2010 survey are from a variety of industries and are senior in nature. One-quarter of German CIOs, 25 percent, have a global outlook and a further 42 percent have some level of international responsibility.

Forty-two percent of German CIOs report directly to the CEO, higher than the global average of 29 percent. Seventy-five percent of German respondents also have a seat on the operational board and 83 percent see the role of the CIO becoming more strategic in the next 12 months, significantly higher than the 64 percent global average.

Figure 39. Strategic influence of CIO in 2010: Germany vs. global average

Skills

Communication and influencing skills are deemed essential for career progression by 89 percent of German respondents, while leadership skills are important to 75 percent. Executive education, such as an MBA, will also advance career progression and enhance strategy and planning skills according to 78 percent of German CIOs.

A skills shortage is noted by 62 percent of German CIOs, in line with the global average of 58 percent. the impact of this shortage could significantly impact the growth of 40 percent of German organizations according to respondents. Architecture skills are in demand by 71 percent of German CIOs, far higher than the global average of 35 percent.


Innovation with technology is important to 83 percent of German CIOs with over two thirds, 67 percent, reporting reasonable success with projects. Investment in innovation projects is in line with global trends. Seventeen percent of respondents invest more than 15 percent of their It budget in innovation activity compared to 15 percent globally.

Collaboration on innovation projects is widely used in Germany. Sixty-seven percent use collaboration with suppliers and customers to speed up development and delivery of products and services, while 50 percent say it is used to enhance the quality of products and services as well as to attract and retain talent.

Collaboration on

innovation projects

is widely used

in Germany.

5.3. Country profile: Germany

0%

10%

20%

30%

40%

50%

60%

70%

80%

90% NoYes

Global averageGermany

83%

64%


2010 priorities

German CIOs appear to be more aggressively looking to invest, innovate and overtake weakened competitors in 2010. Fifty percent are adopting this approach compared to only 31 percent globally.

the use of Software as a Service (SaaS) will be on the agenda of 83 percent of German CIOs in the coming 12 months, compared to 75 percent globally. however, the use of cloud computing has German respondents split evenly with 50 percent saying they will consider the platform in future while half have other priorities.


Spending on outsourced projects is forecast to increase by almost 80 percent of German CIOs in the coming year. Overwhelmingly this is seen as an investment in longer-term cost savings; however, accessing skill sets not possessed by the internal It team is important for 50 percent of respondents.

Software application development and software application maintenance are the most popular processes to outsource and 75 percent of respondents plan to offshore more of this activity in 2010. In line with global trends, India remains the offshore destination of choice but, as in other regions, its dominance is waning with Eastern Europe now used by almost half, 49 percent, of German CIOs. this is significantly more than the global average of 11 percent and the European average of 13 percent.


Although German CIOs have, like most of their global peers, decided to ride out the economic storm with their current employers, 60 percent are now considering a move in the next 12 months. In a worrying trend for German employers, 40 percent of German CIOs are unfulfilled in their current role. that number is far higher than the 18 percent global average, despite the higher levels of board representation and strategic influence seen in Germany.

German CIOs occupy the highest base salary brackets, as shown in Figure 40 below. Despite 60 percent of respondents experiencing a pay freeze last year, there is also a greater willingness from German CIOs to consider freezing or reducing their remuneration to help improve the financial stability of their organization, 80 percent compared to 72 percent globally.

Figure 40. Upper bracket remuneration levels: Germany vs. global average

German CIOs

appear to be

more aggressively

looking to invest

in 2010.

5.3. Country profile: Germany

0%

10%

20%

30%

40%

50%

Global AvGermany

More than $200,000$150,000 - $200,000$100,000 - $150,000

Germany

Global average

20%

34%

41%

29%

39%

19%



Over half of CIOs surveyed in Ireland, 54 percent, oversee technology departments with an international outlook. however, despite these senior indications, 60 percent of Irish respondents do not have a seat on the operational board of their organization. Furthermore, when asked if the role of the CIO is becoming more strategic, 57 percent agreed, which is lower than the 64 percent global average.

Skills

Cost saving is a priority for 75 percent of CIOs from recession-battered Ireland. to achieve those cost savings, highly skilled technologists are needed. the skills most in demand in Ireland to achieve this goal are business analysis, 45 percent, and project management, 30 percent.

the skills shortage emphasized by 58 percent of global CIOs is only affecting 45 percent of Irish respondents, suggesting the recession has reduced the demand and increased the supply of skilled technology people.


Irish respondents overwhelmingly look to innovation to drive competitive advantage, with 83 percent undertaking regular innovation activity. Seventy-nine percent can point to successful innovation projects. Investment in innovation runs higher in Ireland with 38 percent of respondents investing more than 10 percent of their It budget in innovation compared to 32 percent globally.

Collaboration to achieve innovation success is also a main element of the Irish CIOs strategy. In line with their global peers, 58 percent collaborate to speed up the development and delivery of products and services while 51 percent seek to improve resource utilization. In a change to last year, the main barrier to innovation collaboration is now the lack of agreed behaviors for collaborating rather than the physical dispersion of teams.

Figure 41. Barriers to successful collaboration: Ireland

Irish respondents

overwhelmingly

look to innovation

to drive competitive

advantage.

5.4. Country profile: Ireland

0%

5%

10%

15%

20%

25%

30%

Resist

ance

among

potentia

l use

rs

Tech

nology tools

are in

effec

tive

Physicall

y disper

sed

team

s

Not bein

g able

to fi

nd

the r

ight peo

ple

Concern

s about s

ecurit

y

Lack

of agre

ed beh

aviors

for c

ollaborat

ing

27%

17%

14%13%

12%

8%


2010 prioritiesIrish CIOs are more bullish about 2010. thirty-eight percent are actively looking to invest, innovate and overtake weakened competitors compared with only 31 percent globally. however, 27 percent of Irish respondents believe ROI in technology projects will be delayed between one and three years because of the recession. the global average for a similar delay is 22 percent. Software as a Service (SaaS) is seen as one option to recover lost ROI quicker but is only a priority for 26 percent of Irish CIOs compared to 35 percent globally.

IT budgets, outsourcing and offshoringhalf of Irish CIOs, 50 percent, had their budgets cut in 2009 with another 26 percent operating with frozen resources. With the situation easing and only 34 percent expecting further budget cuts, outsourcing investment will increase for almost one third, 27 percent. Key projects exist in software application development, 62 percent, and It infrastructure, 46 percent.

Irish respondents undertake their outsourced activity quite differently compared to their global peers. there is less dependence on India, although it is still the top destination by some margin. A greater emphasis is placed on Eastern Europe and a stronger balance exists between an onshore, Irish-based, outsourcing model and offshore activity. the U.S., 8 percent, and Vietnam, 5 percent, are also growing offshore outsourcing hubs for Irish CIOs.

Figure 42. Top four offshore outsourcing destinations: Ireland vs. global average

Career and compensationEmployment churn within the Irish CIO community is lower than the global average. Only 3 percent have been with their current employer one year or less compared with 11 percent globally. Irish respondents also plan to stay with their current employer longer. Fifteen percent plan to leave for a new role this year compared with 25 percent globally.

Remuneration for Irish CIOs remains fairly healthy despite the recession. Seventy-five percent earn a base salary of over $100,000 and 7 percent earn over $200,000. however, the recession has impacted remuneration growth in Ireland. thirty-five percent had base salary cuts this year compared to only 11 percent of global CIOs. Despite base salary cuts, 72 percent of Irish CIOs would consider an additional freeze or reduction to their own remuneration to help improve the financial stability of their organization.

Irish CIOs are more

bullish about 2010.

5.4. Country profile: Ireland

0%

10%

20%

30%

40%

50%

60%

70%

80%

Global Av.Ireland

UKIrelandEastern EuropeIndia

Ireland

Global average

52%

66%

17%15%

10% 10%

3%

11%



CIOs from the Netherlands overwhelmingly reflect a senior figure at their organizations. Sixty-one percent have an international remit and their reporting lines also reflect senior status with 56 percent working directly for the CEO or CFO, a higher percentage than the global average.

Fifty-five percent of Dutch respondents have a seat on the board compared to a significantly lower global average of 42 percent. their perception of growing strategic authority is also strong with 72 percent agreeing that the role of the CIO is becoming more influential. that number is notably higher than the global average of 64 percent.

Skills

Seventy-three percent of Dutch respondents believe communication and influencing skills are essential to advancement. Fifty-seven percent of local CIOs say they are concerned about a wider skills shortage. this is down 4 percent on last year’s findings, which suggests the supply of skilled labor in the Netherlands has eased slightly due to the recession.

Almost two-thirds, 65 percent, of those who identified a skills shortage believe it will have a material impact on organizational growth this year. the skills most in demand in the Netherlands are very closely aligned to global averages. Business analysis is the top priority for the Dutch at 45 percent and globally at 44 percent. Architecture skills are needed by 35 percent of respondents locally and globally.


Innovation remains centrally important to the majority of Dutch respondents with 82 percent claiming it is key to their strategy. Investing in innovation projects is marginally higher in the Netherlands than the global average, which also explains the slightly higher levels of success at 75 percent.

Innovation collaboration is growing in prominence in the Netherlands. Ninety-two percent of Dutch CIOs have successfully collaborated on innovation projects this year with particular focus given to speeding up the development and delivery of products and services. In line with global trends, the most significant collaboration barrier remains a lack of agreed behaviors, 26 percent, but the process continues apace and especially with suppliers.

Figure 43. Innovation collaboration partners: Netherlands vs. global average

Innovation remains

centrally important to

the majority of Dutch

respondents.

5.5. Country profile: Netherlands

0%

10%

20%

30%

40%

50%

60%

70%

80%

Global AvNetherlands

OtherCompetitorsNoneProfessionalservices firms

CustomersSuppliers

Netherlands

Global average

68%

56%

35% 34% 33%30%

15%

21%

10% 12%

5% 5%


2010 priorities

Priorities for 2010 reflect a sharp contrast with global trends. Figure 44 below suggests a more cautious strategy for Dutch CIOs this year, focusing on further cost cutting and clearing stalled technology projects rather than investing in overtaking competitors weakened by recession.

Figure 44. 2010 technology priorities: Netherlands vs. global average

Almost one-third of Dutch CIOs, 33 percent, plan to adopt more Software as a Service (SaaS) this year. Forty-four percent are looking to add value with cloud computing solutions, which is 10 percent lower than the global average.


Outsourcing partners will be important to much of the above strategy with 36 percent of Dutch CIOs planning to increase investment in outsourcing. In line with the global averages, software application development, 62 percent, and software application maintenance, 58 percent, are the two most outsourced activities.

Offshore partners are meeting or exceeding the expectations of more than two-thirds, 67 percent, of CIOs from the Netherlands. Aside from India, Eastern Europe is again a popular destination to offshore. Eighteen percent of Dutch CIOs send outsourcing projects to Eastern Europe, which is higher than the 11 percent global average.


Career churn among senior CIOs in the Netherlands is down compared to previous years, much like the rest of the global respondents. Seventy-nine percent have been with their employer more than two years. While 23 percent would look to move organization this year, a majority of 57 percent plan to stay with their current employer for up to five more years. Job satisfaction is down 11 percent this year, 72 percent compared to 83 percent last year.

Eighty-nine percent of Dutch respondents have a base salary of more than $100,000 per annum compared with 82 percent globally. Sixty-four percent experienced salary freezes last year and 4 percent had their base salaries cut, but this is less than the global average. Finally, a large majority, 79 percent, said they would consider an additional freeze or reduction to their own remuneration to help improve the financial stability of their organization.

Priorities for 2010

reflect a sharp

contrast with

global trends.

5.5 Country profile: Netherlands

0%

10%

20%

30%

40%

50%

60%

70%

80%


OtherCompetitorsNoneProfessionalservices firms

CustomersSuppliers

Netherlands

Global average

0%

5%

10%

15%

20%

25%

30%

35%

40%


Busines

s as u

sual

with

minim

al new

initi

ative

s

Inve

st, in

novate

and ove

rtake

wea

kened

com

petito

rs

Clearin

g a bac

klog

of pro

jects

Furth

er co

st

reduct

ion

Netherlands

Global average

40%

33%30%

21%

15% 15% 15%

31%



By extending the survey into new regions this year the survey has been able to deliver some insight into Scandinavia, specifically trends from Denmark, Norway and Sweden. Scandinavian CIOs have an international outlook with 52 percent having responsibilities internationally.

More Scandinavian CIOs sit on the board, 58 percent compared to 42 percent globally. they also have positive expectations for the future role of the CIO. Eighty percent say they feel it will become more strategic this year.

Skills

Scandinavian CIOs believe communication and influencing skills are key to advancement, which is consistent with their global peers. however, local respondents place less emphasis on these skills with only 62 percent deeming them ‘essential’ compared to 78 percent globally.

Seventy-two percent of Scandinavian CIOs say they suffer from a skills shortage on their technology team, which is far higher than the global average of 58 percent. the skills shortage also takes a different format with more emphasis on architecture and business analysis in Scandinavia and less on business relationship management, development and security, as show in Figure 45 below.

Figure 45. Skills in demand: Scandinavia vs. global average


Most Scandinavian CIOs rely on innovation projects to keep their technology strategy relevant in fast-moving environments. however, 77 percent place a high level of importance on innovation compared with 83 percent globally. Collaboration as an innovation tool is seen as valuable with more than half, 52 percent, of Scandinavian CIOs actively collaborating with suppliers. the main barrier to collaboration in Scandinavia reflects the global trend that a lack of agreed behaviors often leads to innovation collaboration failure. this is the case for 30 percent of Scandinavian CIOs and 28 percent of their global peers.

Scandinavian

CIOs believe

communication

and influencing

skills are key to

advancement.

5.6. Regional profile: Scandinavia

0%

10%

20%

30%

40%

50%

60%

70%

80%

Global AvScandinavia

Securit

y

Develo

pmen

t

Servic

e

man

agem

ent

Busines

s rela

tionsh

ip

man

agem

ent

Testi

ng

IT st

rateg

y

Projec

t man

agem

ent

Busines

s analy

sis

Archite

cture

Scandinavia

Global average

62%

35%38%37%

27% 27%

22% 21%

31%

14%

21%

11%

23%

8%

16%

28%

49%

44%


2010 priorities

the top priority demanding focus in 2010 for Scandinavian CIOs will be clearing the backlog of recession stalled projects, stated by 37 percent. twenty-five percent of Scandinavian CIOs have technology projects where ROI has been delayed by one to three years because of the recession. this number is marginally higher than the global trend of 22 percent.

New platforms and techniques that are seen to encourage greater ROI will also be deployed by Scandinavian CIOs this year. Software as a Service (SaaS) will see more use from 42 percent of local respondents, higher than the 35 percent global trend. however, cloud computing will receive less focus from Scandinavian CIOs in 2010 compared to other regions, see Figure 46 below.

Figure 46. Greater cloud computing role in 2010: Scandinavia vs. global average


It budgets in Scandinavia are expected to grow for more respondents in 2010, 40 percent, compared to the global average of 29 percent. this is highly relevant because Scandinavian CIOs spend a greater proportion of their It budget on outsourcing. thirty-seven percent in Scandinavia compared to 25 percent globally will invest over one-quarter of their entire It budget in outsourced activity.

It infrastructure outsourcing is also undertaken by more Scandinavian CIOs with 73 percent choosing to do this compared to 53 percent globally. Most of this outsourced activity will occur offshore. Seventy percent of Scandinavian respondents are satisfied with offshore project delivery and 40 percent expect to increase their offshore investment this year.


Scandinavian CIOs are less restless about their career development than their global peers. Forty-two percent plan to stay with their current employer for up to five or more years compared with 32 percent globally. they are also more satisfied with their roles. Ninety-three percent say they are challenged and fulfillled versus only 76 percent globally.

Part of this satisfaction comes from excellent remuneration. Fifty-eight percent of Scandinavian CIOs earn a base salary of more than $150,000 versus a global average of 48 percent. Additionally, only 2 percent of local respondents saw base salary cuts during the recession compared to 11 percent globally. however, 57 percent of Scandinavian CIOs did see a salary freeze last year.

The top priority

in 2010 will be

clearing the backlog

of recession stalled

projects.

5.6. Regional profile: Scandinavia

0%

10%

20%

30%

40%

50%

60%

70%

80%

Global AvScandinavia

Securit

y

Develo

pmen

t

Servic

e

man

agem

ent

Busines

s rela

tionsh

ip

man

agem

ent

Testi

ng

IT st

rateg

y

Projec

t man

agem

ent

Busines

s analy

sis

Archite

cture

Scandinavia

Global average

0%

10%

20%

30%

40%

50%

60%

NoYes

Scandinavia

Global average

38%

51%

62%

49%



In 2009, 42 percent of Swiss CIOs reported directly to the CEO. this year that figure has dropped to 29 percent, and the CFO has taken on greater reporting responsibility with 23 percent of respondents reporting to them.

there is a growing global outlook for Swiss CIOs with 59 percent operating internationally. Despite this, the number of respondents who sit on the board remains unchanged from last year at 52 percent. Interestingly, Swiss CIOs are more pessimistic about the future influence of the CIO: only 48 percent see the role becoming more strategic compared to 64 percent globally.

Skills

Respondents from Switzerland place a higher value on leadership skills. Seventy-eight percent list it as an essential skill versus 63 percent for communication and influencing ability. Seventy-one percent of CIOs see greater influence from executive education, such as an MBA, in delivering better strategy and planning skills compared to 59 percent globally.

Almost three-quarters of Swiss CIOs, 71 percent, feel their organization lacks key skills compared to 58 percent globally. Business analysis, 51 percent, and project management, 43 percent, are felt to be lacking by most, and 65 percent feel the lack of skills will impact their business growth this year.


Switzerland has always scored well on using innovation to deliver technical ROI. this year 74 percent of Swiss CIOs will put innovation at the heart of their It strategy and more than one-third, 34 percent, will invest more than 10 percent of their It budget in innovation activity.

In 2009, Switzerland outpaced European rivals in most innovation categories but in 2010 global peers have gained ground. the use of innovation to improve quality has increased from 43 percent to 57 percent in Switzerland, but has also increased globally to 60 percent. Interestingly, the use of innovation to speed up development and delivery of products has dropped significantly in Switzerland this year as other post-recession priorities have taken greater focus.

Figure 47. Top three innovation objectives: Switzerland 2009/2010 vs. 2010 global average

Respondents from

Switzerland place

a higher value on

leadership skills.

5.7. Country profile: Switzerland

0%

10%

20%

30%

40%

50%

60%

70%

80%

Speed-u

p develo

pmen

t

and deli

very

of

product

s and se

rvice

s

Impro

ve re

source

utiliza

tion

Enhan

ce quali

ty of

product

s and se

rvice

s

Switzerland 2009

Switzerland 2010

Global average

43%

57%60%

53% 53%

77%

53%

58%55%


2010 prioritiesAs the global recession eases and most economies emerge into a tentative recovery, 35 percent of Swiss respondents are focused on clearing the backlog of technology projects put on hold during the last year. An additional 35 percent are reducing costs further this year while only 20 percent will actively look to invest, innovate and overtake weakened competitors.

When considering emerging technology models for 2010, a lower proportion will consider embracing Software as a Service (SaaS) opportunities. Only 26 percent will deliver more products or services via this route in 2010 compared with a 35 percent global average. Cloud computing faces similar skepticism with only 36 percent of Swiss CIOs considering a wider approach for the model compared to 51 percent of global peers.

IT budgets, outsourcing and offshoringIt budgets in Switzerland suffered in the recession much like those in many other countries. Forty percent of Swiss respondents had budgets cut last year with a further 36 operating with frozen investment. Looking forward, 29 percent expect to be running their departments with smaller budgets this year as well. As such, outsourcing to reduce costs remains a priority with 37 percent of CIOs in Switzerland increasing spend despite budget restraints and 44 percent maintaining investment at pre-recession levels.

It infrastructure, 62 percent, software application maintenance, 52 percent, and software application development, 45 percent, are the top activities outsourced by Swiss CIOs. Most of this activity is undertaken offshore in India, 40 percent, and in Eastern Europe, 30 percent. Switzerland remains the nation least dependent on India to meet its outsourcing needs.

Career and compensationJob and remuneration satisfaction are declining in Switzerland. Last year, Swiss CIOs had one of the highest satisfaction rates in Europe with 90 percent claiming to be fulfilled or very fulfilled. that number has now fallen to 75 percent, which is in line with the global average of 76 percent.

Figure 48. Level of career fulfillment: Switzerland 2009/2010 vs. 2010 global average

Growing dissatisfaction does not bode well for future career stability in Switzerland with 41 percent looking to move jobs in the next 24 months. this restlessness is despite the Swiss CIO community being one of the best paid in the world. Sixty-five percent have a base salary of more than $150,000 a year compared to 48 percent globally.

Job and

remuneration

satisfaction

are declining in

Switzerland.

5.7. Country profile: Switzerland

0%

10%

20%

30%

40%

50%

60%

70%

80%

Speed-u

p develo

pmen

t

and deli

very

of

product

s and se

rvice

s

Impro

ve re

source

utiliza

tion

Enhan

ce quali

ty of

product

s and se

rvice

s

Switzerland 2009

Switzerland 2010

Global average

0%

20%

40%

60%

80%

100%

Global averageSwitzerland 2010Switzerland 2009

90%

75% 76%



the UK consistently produces a senior and sophisticated CIO community for this report, and 2010 is no different. UK CIOs have an international outlook with 53 percent having responsibilities beyond their national border. they also work closely with the CEO, with 32 percent of CIOs reporting directly to the most senior executive.

Skills

UK CIOs value communication and influencing skills more than any other ability. Eighty-two percent believe they are essential for advancement at the senior level. UK respondents are also willing to undertake executive education, such as an MBA, to enhance strategy and planning skills. Of the respondents, 57 percent said this would add value.

Regarding their technology team, a majority of UK CIOs, 56 percent, expect to experience a shortage of skills this year, which is 2 percent higher than last year. the skills most in demand are broadly in line with global trends. Forty-five percent need more business analysis skills on their team compared to 44 percent globally. thirty-six percent need more project management skills compared to 37 percent globally.


the overwhelming majority of UK CIOs, 83 percent, put innovation at the center of their It strategy for 2010. In line with their global peers, CIOs from the UK are investing a positive percentage of their budgets in innovation projects. thirty percent will invest more than 10 percent in innovation projects this year compared to 32 percent globally.

Figure 49. Top innovation objectives: UK vs. global average

When exploring what innovation collaboration is given priority by UK respondents it is interesting to note the recognition given to customer-focused activity. See Figure 49 above. the role innovation can play in improving customer satisfaction is recognized by more UK CIOs than by their global peers, 49 percent compared to 42 percent.

CIOs from the UK

are investing in

innovation projects.

5.8. Country profile: United Kingdom

0%

10%

20%

30%

40%

50%

60%

70%

80%

Global AvUK

Attrac

t and re

tain ta

lent

Strength

en cu

stom

er an

d

supplie

r rela

tionsh

ips

Impro

ve cr

eativ

ity

and in

novatio

n

Impro

ve re

source

utiliza

tion

Speed-u

p develo

pmen

t and

delive

ry of p

roduct

s and se

rvice

s

Enhan

ce quali

ty of

product

s and se

rvice

s

UK

Global average

61% 60%

55%58%

54% 53% 53%51%

49%

42%

32% 32%


2010 priorities

A more proactive stance is being adopted for 2010 by UK CIOs. thirty-seven percent of UK respondents are actively looking to invest, innovate and overtake weakened competitors this year compared to only 31 percent globally. two of the tools they will use to achieve this are Software as a Service (SaaS), which will see increasing use by 35 percent of UK CIOs, and cloud computing, which 51 percent will use to increase competitive advantage.


Like many of their global peers, 42 percent of respondents from the UK suffered budget cuts during the recession while a further 29 percent had budgets frozen. As the UK economy begins its recovery and investment plans are dusted off, 28 percent of UK CIOs still expect to be operating with further budget cuts in 2010. Another 39 percent expect a static budget. As such, interest in low-cost outsourcing remains important with 36 percent of UK respondents expecting to increase investment in outsourcing projects this year.

Software application development is an outsourcing priority for 60 percent of UK CIOs. Application maintenance will be outsourced by 51 percent and It infrastructure by 52 percent. the onshore-offshore mix is more balanced in the UK compared to other countries with almost one in five, 18 percent, undertaking outsourced work onshore in the UK. India remains the largest offshore hub with 63 percent of respondents active there. Eastern Europe is also an important offshore destination with 9 percent.


In a similar response to previous years, the CIO community in the UK is more restless than its global peers. Many stayed in roles during 2009 due to the global recession when, in other economic circumstances, they would not have. Fifty-six percent of UK respondents believe they will be in a new job within 24 months, which is 8 percent higher than global trends. See Figure 50 below.

Figure 50. CIO career churn: UK vs. global average

Forty percent of UK CIOs earn more than $150,000 base salary, which is 8 percent below the global average. this difference points to one possible reason for greater remuneration dissatisfaction and higher than expected job churn predictions in the UK. however, despite a swelling demand for more money, 74 percent of UK CIOs said they would consider freezing or reducing their remuneration in 2010 to help improve the financial stability of their organization as it emerges from the recession, which is 2 percent higher than the global average.

A more proactive

stance is being

adopted by UK

CIOs in 2010.

5.8. Country profile: United Kingdom

0%

10%

20%

30%

40%

50%

60%

70%

80%

Global AvUK

Attrac

t and re

tain ta

lent

Strength

en cu

stom

er an

d

supplie

r rela

tionsh

ips

Impro

ve cr

eativ

ity

and in

novatio

n

Impro

ve re

source

utiliza

tion

Speed-u

p develo

pmen

t and

delive

ry of p

roduct

s and se

rvice

s

Enhan

ce quali

ty of

product

s and se

rvice

s

UK

Global average

0%

5%

10%

15%

20%

25%

30%

35%

Global AvUK


UK

Global average

29%

25%27%

23%

31%32%

8%12%

5%

8%


Priorities for 2010

While 2008 and 2009 were two of the toughest years to conduct business in living memory, the majority of CIOs have emerged in 2010 with lessons learned. For those CIOs who can rise above the complexity and challenges, the new environment is creating opportunities to seize competitive advantage and thrive.

In the new corporate landscape, a large percentage of CIOs continue to operate with shrinking or frozen budgets. however, it is the differing mindsets with which these technology leaders approach this new decade that is most intriguing.

German, U.S. and UK CIOs appear to be more proactive, adopting a greater focus on investment and innovation in order to overtake competitors weakened by the recession. In contrast, CIOs in Belgium and France plan to adopt a more cautious strategy of cost control and internal efficiency improvements. Swiss CIOs are planning to put greater energy into clearing the backlog of projects postponed by the recession.

Investment in technology projects has been severely affected by the recession. Across all regions analyzed, CIOs reported projects cancelled, postponed or cut back during the last 12 months.

While many of these programs are likely to be reinstated this year, the value they deliver, whether that includes efficiency savings, new revenue streams from product development or infrastructure upgrades, will not be felt for some time. CIOs are acutely aware of the risk to corporate growth and stability resulting from any delay. however, in our view the successful CIOs will be those who use the delay as an opportunity to critically evaluate their portfolio, only continuing activities that deliver clear business value and stopping those that don’t, however long-standing they may be.

Innovating to grow

Over recent surveys, the percentage of CIOs asked by the business to provide technology innovation has remained static. however, what is interesting this year is a shift in the CIO response. A group of proactive CIOs has woken up to the opportunities and see innovation in technology as critically important in their post recession mission.

In part, the positive evolution in the role of technology innovation over the past few years has been driven by a deeper understanding of the value innovation can provide, with innovation success improving in all regions analyzed.

technology is also increasingly core to the fabric of most organizations, opening up opportunities through technology innovation to offer a differentiated proposition to customers, and thereby steal a march on competitors.

however, there is still more room to innovate. Over half the

CIOs surveyed still don’t set innovation targets, which suggests

that while the value of innovation is evident, the path to

innovation success is not.

It is widely accepted that organizations cannot innovate in

isolation. Collaborating to achieve successful innovation has

tended to be a strategy more easily adopted in times of growth

rather than during a recession. Subsequently, innovation

collaboration with many third parties dropped during

2008-09. however, in 2010 innovation collaboration is

back on the agenda with suppliers being the preferred

partner. typically this is the most straightforward route,

as suppliers have an inherent interest to collaborate with

their customers.

Customers and professional services firms are also becoming

important collaboration partners again, but sector-wide

collaboration with competitors, the most challenging group,

remains depressed.

technology advancements have removed some of the

most significant collaboration barriers seen in recent years,

making it easier for CIOs and their teams to collaborate

with other organizations. however, the survey reveals that

the principal remaining barrier is the lack of clearly defined

behaviors for collaboration—which is particularly true

across competitor organizations.

We believe that for those organizations that are able

to overcome this barrier there is a big prize in terms of

competitive advantage and that they will recover faster

together than those trying to return to growth in isolation.

New models for a new decade

the tools to innovate and collaborate have been improved

with the growing awareness and maturity of the cloud

computing solutions, particularly Software as a Service

(SaaS). this new model for It service delivery is leading CIOs

to think differently about how they engage with the business

and their teams deliver value, because for the first time the

business can realistically bypass It and go directly to a cloud

service provider to have their requirements met.

6. Conclusions by PA Consulting Group & Harvey Nash


there is a lot of hype around cloud computing today, which is exciting in terms of cost savings opportunities while challenging in terms of technical, service and security barriers. the survey reveals that CIOs responses are split. half of CIOs globally see it as the future and will adopt it in their organization, the other half have no plans for cloud computing in 2010.

In what is a significant shift, cloud computing has created new business models built on the economies of scale of delivering commoditized services to many different customers enabled by the Internet. On the demand side, organizations can buy It services by use rather than owning the assets themselves. All great in theory, and some organizations have dabbled in it by using Cloud services such as e-mail, CRM or development test environments. however, only a few, usually smaller organizations have moved their core business applications to the Cloud.

Substantive issues still have to be overcome, such as seamless integration with legacy solutions, regulatory restrictions on data storage, information security and maturity of service delivered to customers. these objections have been well-flagged by suppliers and customers developing solutions that will overcome these issues through innovations like virtual private Cloud solutions.

It is perhaps no surprise that as Cloud is a strategic choice for organizations, the response is currently split. however, we expect cloud computing will grow in importance over the coming years as CIOs are required to take a more aggressive approach to cost savings and efficiency drives while losing none of the required organizational flexibility and growth potential.

Outsourcing maturity

An important message from the survey this year is that, with a few exceptions, outsourcing has seen little change. however, this in itself is very significant as it demonstrates that the outsourcing industry has now reached a stable level of maturity.

Outsourcing investment survived the budgetary pressures brought by the recession, and almost 90 percent of CIOs will be increasing or maintaining their investment this year. the recession increased the popularity of the offshore model. however, currents below the surface may indicate that changes are emerging in the outsourcing demands expressed by many CIOs.

For a number of years now, the satisfaction with traditional outsourcing models and traditional outsourcing hubs have been declining. We evidenced this again this year. the new models outlined above, SaaS and cloud computing, will have an impact on the change, but so too will emerging locations, which can compete with more traditional providers now that access to these regions and their low-cost but high-value talent is available.

India’s dominance in offshore outsourcing is waning and the pace of decline is growing, although it still owns much of the market. the rise of Eastern Europe as a preferred hub, especially for European-based CIOs is undeniable. More than one in 10 global CIOs now undertake offshore activity in Eastern Europe. that figure is significantly higher within those European countries closest to the region.

Other beneficiaries of this trend are hubs such as Vietnam, the Philippines and even China. A greater mix of onshore and offshore resources is also expected in coming years in line with the evolution of SaaS and cloud computing. In this environment of multiple outsourcing partners operating from a range of different hubs, the effective management of more complex and disparate outsourcing activity is going to become even more important to CIOs.

For both CIOs and their outsourcing providers, the key statistic that continues to cause concern is a growing level of dissatisfaction with project management standards, despite the overall popularity of the offshore outsourcing model.

Skills for growth

We stated last year that when economic times are at their worst, organizations need their top talent working at their best. the skills of the CIO and their technology team were tested throughout the recession. Now that most economies are recovering, the need for skills has not changed but their utilization and type of skills has.

Communication and influencing skills remain the most important skills for advancement in a post-recession world. however, leadership skills are certainly more recognized than in previous years as a result of managing the technology function during a very difficult environment.

the favored communication styles of CIOs have also evolved as a result of the recession. More emphasis is being given to face-to-face and other more personal mediums, especially for



internal use. Web-based social networks are evolving, and, while not typically being used by CIOs for internal communications, business-focused networks such as LinkedIn are showing significant potential as mechanisms for knowledge exchange and collaboration.

the further development of cloud-based solutions, many of which will be provided via outsourced arrangements, is also creating the need for CIOs to have enhanced commercial understanding of the market and a heightened awareness of managing a multi-source economy of supply. therefore as well as being a great leader of their team, the CIO needs to be a far more informed buyer in the emerging world. One individual cannot possibly understand it all, which has great implications on the nature and scope of the future It organization a CIO designs and manages.

Formal executive education, such as an MBA, is growing in popularity among the CIO community. Many CIOs used the recession to explore adding to their skills with almost two-thirds believing an MBA would improve their strategy and planning ability.

In 2010 the technology skills shortage is also returning to prominence. Globally the demand for skills has returned with hot spots identified in Scandinavia, Switzerland, the U.S., the Netherlands, Belgium and Germany. In line with their more sluggish economic recovery, the UK and France appear to be less severely impacted by the skills shortages.

As growth returns, we expect to see the demand for skills continue to rise across Europe and the U.S. as organizations return to investing for the future. however, we would not be surprised if highly skilled individuals in these regions also began looking further afield to high-growth markets in Asia for their next career opportunity, leaving a greater skills gap at home.

The rise of the CIO

the CIOs reward for their recession-busting performance seems to be a stronger strategic voice and, in many cases, a seat on the operational board. the strategic focus of the CIO is growing too with almost three-quarters of respondents to the survey foreseeing a greater role in strategy decisions in 2010.

however, career development signals for CIOs are not all positive. Careers were certainly stunted by the recession and CIOs are now more wary about moving to their next role until the economic environment stabilizes further.

We certainly see a more complex and challenging environment ahead for the CIO. the recession may have been successfully negotiated by many, but the economic landscape has been changed forever. those CIOs who recognize this first, and who are able to identify and pursue technology trends in emerging markets, will be the ones to prosper most in the next growth cycle. those who can’t, or won’t, accept that the world has changed run the risk of being left behind.

Salary sensitivity

the vast majority of global respondents experienced a salary freeze in 2009 with about one in 10 seeing their salary cut. Conditions are improving in 2010 but most CIOs are realistic about the need to manage cost within a fragile economic environment. In fact almost three-quarters of respondents say they would consider freezing or cutting their own salary in 2010 to improve the financial stability of their organization.

however, very real differences in remuneration have emerged during this research which potentially risk upsetting the current harmony between CIOs and their employers.

talent is global in the 21st century economy and CIOs in Belgium and Ireland who are struggling to retain parity in compensation could be forgiven for looking enviously at the remuneration enjoyed by their U.S. and German peers. Overall job satisfaction has been one of the casualties of the recession and is down 4 percent this year, and worse in selected countries.

the implications are twofold. Firstly, the CIOs themselves may seek to fulfill their career ambition elsewhere leaving their organizations vulnerable, and secondly motivating a highly skilled technology team while not fulfilled yourself could have a negative impact on the 2nd and 3rd tier leaders who report to the CIO.

Although CIOs remain cautious about moving jobs due to the wider economic fragility, the risk of high-level departures grows. With the widening economic gap between a fast-growing East and indebted West, it is not unrealistic to believe that ambitious CIOs will look at China and other Asian countries as a way to fast-track their career and maximize their earnings.

this would certainly be a net loss to organizations in Europe and the U.S. which could lose the skills that helped bring them through the recession. however, for future CIOs currently in the 2nd or 3rd tier of technology management this could



prove to be a hidden blessing. We fully expect the flow of talent around the world to grow in line with an economic recovery and a more interconnected world.

A new breed of CIO

those CIOs of today and the future who recognize that their ability to rise to the top of their profession is dependent on their diversity of experience, leadership abilities and commercial expertise will shrug off any dissatisfaction about sluggish salary inflation this year and grasp the opportunities as they emerge.

this year we have seen new technology models establish themselves with greater prominence, new outsourcing hubs emerge with confidence to challenge India’s dominance, and new strategies for growth replace the recession priorities of 2009.

We conclude by asking a question for the new decade and a new growth cycle: Is it now time to see a new breed of CIO?

For more insight from PA Consulting Group visit:www.paconsulting.com


76 Harvey Nash CIO Survey 2010www.harveynashusa.com | [email protected]

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