New breed of CIOs sets business growth strategies amid recessionary concerns
For technology leaders, a paradoxical storm is brewing. As the risk of recession persists, there will likely come some familiar demands from the business: Cut costs, reduce overhead, find new ways to streamline operations. But our latest PwC Pulse Survey shows that CIOs aren’t taking a reactionary stance. While 40% of CIOs say recession is a serious risk — higher than any other executive group surveyed — they’re doubling down on actions to position themselves and their companies for success no matter what unfolds in the coming months.
CIOs have dual agendas: Capture efficiencies across the business by accelerating the benefits of automation while focusing on effectiveness plays like creating new digital revenue streams. While many companies expect to invest more in technology over the coming year, including digital transformation (53%), IT (52%) and cybersecurity/privacy (49%), some CIOs won’t be so lucky. “Do more with less” is the same story they’ve heard for years. The big difference today? A new breed of tech leader is emerging who has the capabilities needed to meet this tall order. Combining technical experience with business savvy and strategic insight, these “triple-threat” CIOs continue to take on a greater role in business strategy, which 57% say they actively define. So unlike some traditional cost cutting, CIOs are helping to drive a much more strategic and sophisticated agenda — cutting costs in areas and in ways that help the business grow stronger by building digital capabilities.
CIOs prepare for uncertainty — and dual paths to growth
From driving cost savings and margin improvements to new revenue streams and enhanced customer experience, tech leaders deliver business efficiency and effectiveness.
49%
of CIOs are looking to drive business efficiencies with efforts such as digitization.
CIOs aren’t waiting to see what happens with the economy. Although the specifics of what they’re doing may vary depending on the unique circumstances of each organization, they’re taking action now.
Technology leaders rank recession as a top concern, with 40% citing it as a serious risk to the business (versus 30% overall). Why are CIOs especially worried? For the answer, look to the past to see how technology functions have historically fared during economic downturns when tech budgets were often reduced. Today, however, CIOs aren’t simply focused on cutting costs. In fact, they’re nearly equally focused on driving business efficiencies (49%) and effectiveness (51%), both of which help drive growth.
What else are tech leaders most worried about? Cyber threats, a perennial concern, were ranked second while it was the top risk cited by executives across the board (40%). This difference may be due to the fact that while the broader executive team sees the threat environment intensifying because of geopolitical risks, CIOs believe their countermeasures are up to task. Rounding out the top-five risks were rising production costs (32%), the US regulatory environment (30%) and inflation leading to lower consumer demand (29%).
What you can do: Leverage automation and cloud-based rapid development technologies to help achieve your goals around efficiencies and growth. Develop a plan to help make sure that you can realize that value on tighter time frames than ever before.
Digital transformation and workforce strategies top the corporate agenda
Tech teams need analytics, AI and cloud-native skills to meet increasing business demands.
53%
of executives say their companies are increasing investment in digital transformation.
Despite the risk of economic downturn, building the business is front and center at the vast majority of organizations. Eighty-three percent of all executives say they’re now focusing their business strategies on growth in response to the current environment. As a key part of that strategy, companies continue to put technology initiatives at the top of their priority list. Efforts around digital transformation (53%), IT (52%), cybersecurity (49%) and customer experience (48%) topped the list of areas in which companies say they’ll be increasing their investments over the next 12 months. At the same time, companies continue to evolve their workforce strategies, another area where technology plays a pivotal role. Seventy percent of executives say they’re already implementing permanent work-from-home options, and 63% say they’re actively changing processes to address labor shortages, such as by leveraging automation tools.
For CIOs that means confirming they have the talent to deliver on these priorities. Without deep functional knowledge and tech know-how, transformations can fail to deliver. When asked to rank the most important skills to develop over the next year, data analytics and artificial intelligence skills topped the list at 41%. Skills related to cloud-native development and integration ranked second (36%), in contrast to cloud migration (28%), which was near the bottom of the list. This points to a shift we’re seeing among companies and the realization that migration alone isn’t enough. Instead, businesses are pursuing migrations as part of a broader transformation strategy that’s not merely focused on lift-and-shift efforts but rather business outcomes achieved through a combination of cloud migration, modernization and business transformation initiatives.
One of the skills tied for the No. 3 spot was somewhat surprising: Infrastructure operations, management and support (35%) — bread and butter skills that have been core to IT departments for decades. This is probably a reflection of the blended working reality of almost every enterprise. While many organizations have made massive pivots to cloud-based services, some operations inevitably must remain in the data center, so it falls to IT to keep it up and running. Supporting remote and hybrid workers is also likely a key part of this skills category, boosting its importance. Also tying for third, along with cybersecurity, was the ability to communicate and understand business and technology. This is reflective of a broader trend for CIOs and their teams alike, which emphasizes the importance of business and strategy skills alongside tech ones.
Of note is what’s at the bottom of the list. Twenty-one percent of CIOs say cultivating web3 and metaverse skills is a current priority. This number is surprisingly high given these are relatively new areas. It’s also consistent with what business leaders told us in our metaverse survey, that talent is their No. 1 priority to advance their metaverse strategies this year.
What you can do: Invest in people to leverage new technologies. With trends like metaverse, investing early to develop or hire specialized talent can help you capitalize on the tech building blocks (virtual reality, augmented reality, digital assets) today. Then you can be well positioned as the metaverse concept and web3 framework evolve and take shape over the coming decade.
Tech leaders have earned a permanent seat at the strategy table
Introducing the “triple threat” CIO: a seasoned pro who understands technology, business and strategy.
57%
of CIOs say they play a role in actively defining corporate strategy.
For decades, many technology leaders took a back seat when it came to setting broader corporate initiatives. It’s clear that those days are now behind us, with 91% of CIOs saying they have a role actively defining or influencing strategic direction. Today, enterprises understand the pivotal role that the CIO plays in the business and are firm in their position that data and technology are now fully integrated with business operations and strategy, including tax planning.
Today’s CIOs should succeed on three fronts. They must understand technology, naturally. They must understand how to use that technology to advance the needs of the business. And they must understand the role that technology plays in setting strategic direction as it relates to the industry at large. These “triple threat” CIOs are becoming key members of the C-suite in successful organizations.
In putting these skills to use in the market, CIOs say that the next 12 months will see their role split fairly evenly among three focus areas: 35% on improving costs and efficiencies, 34% on implementation and tech-enablement of IT services, and 28% on growing the business. This split speaks to how the CIO role is evolving, with most tech leaders seeing their mandate as one that goes well beyond IT. They’ll spend most of their time on efforts that directly impact the performance of the business.
What you can do: Concentrate on technology solutions that can help drive profitability and growth. Embrace the changing role and continue to look for opportunities to collaborate with other areas of the business. Your tech and business acumen can play a key role in helping define and execute your company’s strategy.
About the survey
Our latest PwC Pulse Survey, fielded August 1 to August 5, 2022, surveyed 722 executives and board members from Fortune 1000 and private companies about the current business environment, the risks executives are facing and the impact those risks have on company strategy and growth plans. Of the respondent pool, 92 are technology leaders.
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