CIOs look to increase business value from technology

Post credit crisis CIOs will not be totally focused on cost reduction, but instead looking to use technology to add value to the organisation. In the same month that saw the announcement that the next CEO of retailer Tesco will be their CIO; a study by KPMG finds that CIOs are looking beyond the recession to really drive the business forward through technology use, just as Tesco did.

A KPMG study of 450 CIOs came to the conclusion that CIOs will now focus on the price and quality of deals from IT vendors and outsourced service providers, with 81 per cent reporting that they are focusing on getting value from their IT as their top priority. In doing so KPMG said CIOs “expect to IT to contribute directly to realising the business strategy and have a central role in management.

Bryan Cruickshank, a partner at KPMG Advisory, which completed the research, said a clear example of this is supermarket Tesco, where Philip Clarke, the International Director of IT will replace Terry Leahy as CEO later this year.
“Tesco have used IT to understand their audience and grow as a business,” Cruickhsank said of how Tesco has gone from an also ran in the UK supermarket sector to the undisputed leader. It has achieved this, he said, through its use of technology for its loyalty card and supply chain systems, leapfrogging rivals Sainsbury and Asda. “It is usually organisations that have gone public about the need to change the organisation, such as Tesco. Toby Redshaw, CIO at Aviva, formerly at Motorola is another example and will bring an emphasis on how technology delivers value and change to the Aviva business.
“The CIO job is changing and requires a more intuitive understanding of business priorities. When looking at technology they are looking for something that adds value to the business, rather than getting a technology to right price point. Cost optimisation is considered to be about cost reduction, but it is not the case now, because the lowest cost is not always the best option,” Cruickshank said.

KPMG Advisory does expect outsourcing service providers to be placed under increased pressure to deliver value as CIOs review their outsourcing arrangements. CIOs told KPMG that internally they see people as the most important component of the value equation they offer the organisation.

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