You are on page 1of 76

AR

YE
TH
12
R
OU
IN
W
NO

HARVEY NASH
CIO SURVEY 2010
NEW DECADE, NEW OPPORTUNITIES?

in association with
Contents

1. Executive summary 6
2. CIO Spotlight 10
3. Leaders in technology: salary review 13
4. Survey results 18
4.1. Global results* 18
4.2. United States results* 28
4.3. Europe results* 42
5. European country profiles 55
5.1. Belgium 56
5.2. France 58
5.3. Germany 60
5.4. Ireland 62
5.5. Netherlands 64
5.6. Scandinavia 66
5.7. Switzerland 68
5.8. UK 70
6. 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

2 Harvey Nash CIO Survey 2010


Foreword

Welcome to the 2010 CIO Survey

In the 12th year of producing our detailed survey, 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 'have’s' and 'have not’s' 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.

Albert Ellis
Chief Executive,
Harvey Nash plc

Harvey Nash CIO Survey 2010 3


CIOs' viewpoints f

Karen Forte, CIO & Head of Services, Allianz, Ireland


To be able to help your organisation 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.

John Donnarumma, Global CIO, Group M, USA


There are two "musts" for a CIO: being able to
thrive in a chaotic environment, and being able to
anticipate the absolute unknown.

David Bickerton, CIO, British Gas, UK


It’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.

Debra C Robinson, Global SVP/CIO, Hearst Magazines, USA


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.

Tom Verhulst, CIO, Ziggo, Netherlands


To grow as a department we need business
consultants; people who know the business
and who understand IT processes and the
organisation. The priority for CIOs is to
integrate the business and IT capabilities.

4 Harvey Nash CIO Survey 2010


from around the world

David Henderson, CIO, Daily Mail General Trust Group, UK


Daily Mail Group is operating in very challenging business
conditions. The IT strategy relies on unlocking the potential
of the entire team, recognising delivery, positive attitude
and creativity. Talent Management is increasingly
becoming a critical issue for Executives, globally, and
the ‘war for talent’ does not abate.

Edward Johnson, IT Director, Falcon Bank, Switzerland


We hired some of our brightest staff during the recession, by
successfully communicating the "brand" of our IT vision, which
included an aggressive committment to a fully virtualised global
banking environment, working with a CEO who understands the
value of a client focussed 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".

Gary Arthurs, CIO, HMV Group, UK


Our 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 programmes
are key investments for learning about our customers
and interacting with them through social media and
direct marketing.

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.

N.B. Countries indicated are where the CIOs are primarily based
Harvey Nash CIO Survey 2010 5
1. Executive summary

According to most respondents technology played an


important role in the survival of many organisations

New insights
In 2010, the CIO Survey by Harvey Nash with PA Consulting Group ‘went global’ with
thousands of CIOs from around the world contributing their insight and opinions. The
decision to analyse 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 per cent, experienced a salary freeze
in 2009 with about one in ten seeing their 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 per cent of CIOs believe executive remuneration should be restrained until the
economic recovery is more stable while 72 per cent said they would consider freezing or
cutting their own salary to improve the financial stability of their organisation.

In analysing 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. In
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 organisations during the last 12 months. Seventy-four per cent of CIOs were asked
to focus on cutting costs and 75 per cent 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 per cent of global respondents foresee a greater role in strategy decisions
in 2010. To fulfil a wider set of responsibilities CIOs are focusing on advancing their skill
set with executive education being considered by many. Communication and influencing
skills are the most important to CIOs according to 81 per cent of them while leadership
skills, 76 per cent, and strategy and planning skills, 57 per cent, are also prioritised.

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 stabilises further.

6 Harvey Nash CIO Survey 2010


1. Executive summary

This year the skills shortage


has returned to prominence

Priorities for 2010


As the global economy emerges from recession, there are also a wide range of priorities
for CIOs to address in their organisations. Germany, the U.S. and the UK appear to be
more proactive in their approach to 2010 by adopting 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 per cent of CIOs now report to the
CEO or CFO, more than any other senior executive. The greater 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 organisation was
affected in one way or another and every CIO faced challenges associated with the
recession. Fifty-five per cent of the respondents occupy a role with global responsibility
and can well 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 executive education
programme will enhance their ability to compete for more senior positions. Many CIOs
used the recession to explore adding to their skills with 59 per cent believing an MBA
would improve their strategy and planning ability.

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

The UK at 56 per cent and France at 30 per cent 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,
but the intensity of demand differs by country and region.

Harvey Nash CIO Survey 2010 7


1. Executive summary

Two developing innovation models are gaining


prominence as CIOs face the world in 2010

Innovation and collaboration


Innovation success is improving in all regions analysed, but 55 per cent 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 organisation. However, now many CIOs, 60
per cent, are shifting their innovation focus into growth activities and using innovation
projects to enhance the quality of products and services. Additionally, 58 per cent of
global respondents are innovating to speed up the delivery to market of their offering to
capitalise on remerging 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 per cent of global
respondents this year. In Germany, it will be adopted by 83 per cent while in Scandinavia
42 per cent of CIOs will be increasing their use of SaaS. Cloud computing is on the
agenda of 51 per cent 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 per cent.

Half of the respondents this year will collaborate more than last year. It appears that
many CIOs realised during the recession that their organisations 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 behaviours between organisations
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 organisation’s rapidly changing priorities. This year, 87 per cent
of CIOs will maintain or increase their investment in outsourcing projects, up 11 per
cent on last year’s sentiment. Globally, the top outsourced functions remain software
application development, 62 per cent, software application maintenance, 53 per cent,
and IT infrastructure, 53 per cent.

The role of India in offshore outsourced programmes 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 ten 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 organisations 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.

8 Harvey Nash CIO Survey 2010


1. Executive summary

Respondents remain cautious about moving


jobs due to the wider economic fragility

These trends have combined to depress job satisfaction on a global basis, which is down
4 per cent this year at 76 per cent. The situation is worse in selected countries. For
example, career fulfilment among CIOs is at 60 per cent in Germany and 68 per cent 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 moving 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 to bring their organisations 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 realise 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.

Harvey Nash CIO Survey 2010 9


2. CIO spotlight

We aim to shine a spotlight on the CIO

CIOs are unique creatures who are often viewed singularly in the context of their own
organisations 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 ten regions surveyed.

2.1. CIO strategic influence


At a global level, the CIO is a strategic figure. Fifty per cent of CIOs report to the CEO
while 26 per cent report into the CFO, ensuring they have influence with the top two
executives in most organisations. Additionally, 59 per cent 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

CIO becoming
Country 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 US 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
per cent of the community 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

10 Harvey Nash CIO Survey 2010


2. CIO spotlight

The different emphasis on skills given by


CIOs in each country can be easily tracked

year are also more satisfied in their career. There is one major exception to this rule,
Germany, where despite the CIO community agreeing that their role is becoming more
and more strategic they remain unsatisfied with their position.

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

Comms. & Strategy & Change ROI Outsourcer IT


Leadership
influencing planning mgt oriented mgt 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 av. 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%
US 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 organisations’ growth and their own career prospects, there
is a considerable variance in their eagerness to leap into new career prospects.

Harvey Nash CIO Survey 2010 11


2. CIO spotlight

CIOs are less likely to pursue a new


role than they were pre-recession

Table 3. CIO intent to move job

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%
US 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.

12 Harvey Nash CIO Survey 2010


3. Leaders in technology: salary reviews

A significant difference can exist in base


remuneration depending on country

In this new section to the report for 2010 the base salaries of CIOs and other
technology leaders from around the world are analysed 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. CIO average base salary by country


Average salaries are assessed at the country level and the top ten 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. CIO average base salary by country

Country Average base salary


1 Germany $175,000
2 US $164,119
3 Switzerland $158,140
4 Scandinavia $152,163
5 Netherlands $148,264
6 Global average $144,734
7 France $137,500
8 UK $137,112
9 Ireland $129,928
10 Belgium $118,269

Those countries that sit above the global average of $144,734 are 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 ten 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 categorised 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
categorised 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 overleaf.

Harvey Nash CIO Survey 2010 13


3. Leaders in technology: salary reviews

The global average base salary for CIOs is understandably


in the upper tier of all technology leaders

Table 5. Average base salary by job function

Job function Global average base salary


CIO/CTO $166,440
IT Director/VP $138,711
IT Manager $106,604
IT 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

CIO/CTO IT Director/VP IT Manager IT Professional


Belgium $151,389 $138,542 $88,393 $56,250
France $143,750 $143,750 $125,000 N/A
Germany $187,500 $150,000 N/A N/A
Global average $166,440 $138,711 $106,604 $106,429
Netherlands $166,667 $139,973 $103,846 $125,000
Ireland $159,052 $133,333 $102,574 $87,500
Scandinavia $152,334 $164,063 $112,500 N/A
Switzerland $156,522 $156,944 N/A N/A
UK $160,256 $126,986 $100,581 $116,667
US $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.

14 Harvey Nash CIO Survey 2010


3. Leaders in technology: salary reviews

IT professionals without management


responsibility vary greatly in their base salary

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, Netherlands and
Ireland joined Belgium below the global average for IT managers with France best
compensating 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 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.

Harvey Nash CIO Survey 2010 15


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

www.harveynash.com/CIOSurvey

blogs | podcasts | downloads | videos | opinion | insights | Twitter | events

Harvey Nash CIO Survey 2010


4. Survey results

Harvey Nash CIO Survey 2010


4.1. Global results

2,655 diverse responses from as far afield as London,


Warsaw, New York, Cape Town, Lahore, Buenos Aires

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 per cent of the respondent community.

Figure 1. Breakdown of respondents by job function: global

3%

12%
C - level

37% Senior management

Mid management

Professional

48%

4.1.2. Reporting lines and board presence: global


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

Figure 2. Reporting lines of respondents: global

17%
29% CEO

CFO

COO
27%
CIO
15%
Other
12%

18 Harvey Nash CIO Survey 2010


4.1. Global results

2 per cent of CIOs are responsible for a


budget in excess of 1bn dollars

While they are senior executives in their own right, only 42 per cent of the global
respondent community currently sit on the operational board of their organisations.
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 per cent of respondents have either a global or multinational remit while only
10 per cent 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 per cent) of the total respondent population.

20%
Figure 3. Top industry sectors: global
17%
16%

15%

10%
8%

6%
5% 5% 5% 5% 5%
5% 4%
3%
2% 2% 2% 2%

0%
n
a
s
lo n

n
ec nd
ice s

tic t

g
Co e d i a d
g
ice l

il

om

m
rv ia

gis or
rv es

io
ar
no tio

he

io

rin
m an
ta
rin

cs ta
se anc
gy

r
He s

ar
s

ct
hc

lo sp
se sin

at
s

Re
to
Ot

ee
ch a

lec
tu

ive lm
Ph

tru
te form

bli en

uc
d n
alt
Bu
Fin

ac

gin
a
Te

ct fi

Ed
pu rnm

an Tr

ns
uf

ra t,

En
In

te as
an

ve

in dc
M

Go

oa
Br

4.1.4. Budget responsibility: global


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

Harvey Nash CIO Survey 2010 19


4.1. Global results

Two-thirds of respondents feel the role of


the CIO is becoming more strategic

Figure 4. Shifts in strategic responsibility: global

24% More

Less

Same
12%
64%

Perhaps unsurprisingly with the scale of IT budgets they manage, almost two-thirds (64
per cent) of respondents feel the role of the CIO is becoming more strategic within
their organisations. This is a similar result to last year’s European research which found
that more than 60 per cent 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

Increase operational efficiencies 75%


Cost saving 74%
Improve business processes 71%
Innovation 38%
Developing new products 35%
Entry to new markets 28%
Improving price competitiveness 23%
Green IT 15%
Responding to globalisation 15%
Mobile commerce 14%
Other 5%

20 Harvey Nash CIO Survey 2010


4.1. Global results

A shortage of key skills is re-emerging as the


global economy recovers from recession

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 recession.
Fifty-eight per cent of global respondents this year said they expect to face a skills
shortage, which is up 4 per cent from 2009 European figures.

Global respondents prioritise 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 per cent 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.

50%
Figure 5. Skills most in demand: global
44%

40% 37%
35%

31%

30% 28%

23%
22%
21%

20%
16%

10%
6%

0%
en ip
aly ess

r
e

t
y
en t

ity
t

he
en
em jec

en
ur

eg

tin
em sh
t
sis

r
an sin

Ot
ct

em
pm

cu
at
ag n
ag Pro

s
Te
an tio
ite
Bu

str

Se
ag
elo
ch

m rela

IT

an
v
Ar

De

m
an

s
es

ice
m

sin

rv
Bu

Se

The financial impact of skill shortages is becoming more evident. Sixty-five per cent
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
per cent) feel their teams are good or excellent at building and maintaining relationships
with the business. Sixty per cent are also rated highly for project management skills.

Harvey Nash CIO Survey 2010 21


4.1. Global results

Innovation investment provides the


framework for innovation success

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

Building and maintaining relationships with business 65%


Managing and prioritising the IT project portfolio 60%
Planning future IT architecture and infrastructure 56%
Managing and prioritising demand from the business 54%
Setting and managing IT sourcing strategy 50%
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 per cent this year, are being asked to provide technology innovation to improve
competitive advantage.

While it is encouraging to see technology innovation drive organisations out of


recession, it is concerning that over half, 55 per cent, of global CIOs are not setting
targets for innovation. This may be the reason that 85 per cent 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

30%
27%
26%

25%

20% 17%

15% 15%
15%

10%

5%

0%
< 1% 1-3% 4 - 8% 9 - 15% > 15%

22 Harvey Nash CIO Survey 2010


4.1. Global results

There are still many barriers to


collaborating on innovation projects

Collaborating to achieve innovation success has also been a hot topic during the
recession and into the recovery. Eighty-nine per cent 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 per cent collaborate on innovation projects
to enhance the quality of projects and services while 58 per cent 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 favoured by most CIOs
for collaboration.

Figure 7. Collaboration partners: global


60%
56%

50%

40%
34%

30%
30%

21%
20%

12%

10%
5%

0%
e
rs

s
irm al

r
er

or
n

he
lie

s f ion

No
m

tit
s

ot
pp

sto

ice ss

pe

s,
su

rv fe

Ye
cu

se pro
th

co
th
wi

ith
wi

th
s,

wi

w
Ye

s,
Ye

s,
s,

Ye
Ye

Over one-third of global respondents (35 per cent) state there was no trigger to their
innovation collaboration activity. However, over half (50 per cent) indicate that a
change in the market or a change in business focus, such as the recessionary pressures
being exerted on most organisations 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.

Harvey Nash CIO Survey 2010 23


4.1. Global results

Outsourcing and offshore development


will play an increasing role

Table 9. Barriers to collaboration: global

Rank Barrier %
1 Lack of agreed behaviours 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 behaviours 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 per cent, actually saw an increase in IT
budget during the recession last year, the majority, 43 per cent, saw a budget decline.
Looking ahead to the next 12 months, a smaller portion of respondents, 29 per cent,
anticipate further budget cuts.

Figure 8. 2010 expected IT budget change: global

29% Stay the same

43% Decrease

Increase

28%

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 per cent, spend more than 10
per cent of their IT budget on outsourcing. This is a minor decline from 52 per cent last
year but remains significant and the majority.

24 Harvey Nash CIO Survey 2010


4.1. Global results

Outsourcing to offshore locations has never been more popular

Expectations for the next 12 months show that over one-third, 36 per cent, 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 per cent, will maintain their current
outsourcing spend, while a minority 13 per cent will cut back their outsourcing activity.

The IT activity most outsourced continues to be software application development,


cited by 62 per cent of respondents. IT infrastructure outsourcing also remains highly
80 utilized with 53 per cent of respondents citing it as part of their outsourcing portfolio.

70 Figure 9. IT functions outsourced: global


62%

60% 53% 53%

50%

40%

30% 22%
20% 14%
8% 8% 6%
10% 1%
0%
nc n

n
re

t
en n

O
he

en
na io

tio
pm io

tu

BP

BP

KP
e
te cat
t

Ot
lo at

rtm
ra
uc

IT

HR
ve lic

eg
ain li

str

pa
m pp
de app

nt
fra

de
ea

si
in
e

IT
ar
ar

IT

ste
ftw
ftw

Sy
So
So

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 per cent of
respondents make this their highest priority while 35 per cent 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 per cent of
global respondents maintaining or increasing their investment in offshore activity this
year. The favoured destination continues to be India where two-thirds, 66 per cent, 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 per cent of respondents locating projects there. The UK held the
third position at 10 per cent. 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 per cent (down from 38 per
cent last year). Thirty-seven per cent of global CIOs say that offshore work remains a
key part of their recession-busting strategies.

Harvey Nash CIO Survey 2010 25


4.1. Global results

The global recession has forced CIOs to review


their career and compensation expectations

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 per cent have been at the same
organisation for five years or more. The number who have been in their current role for
less than a year has dropped to 11 per cent from 17 per cent 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 per cent. However, within the next two years almost half, 48 per cent, plan to be in
new jobs.

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

Figure 10. Level of fulfilment: global

5%

18% Very fulfilling


32%
Quite fulfilling

Not very fulfilling

Not at all fulfilling

45%

One in five global CIOs (19 per cent) are actively looking for their next job while another
43 per cent 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 per cent of respondents; and greater involvement in business
strategy, outlined by 24 per cent.

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

26 Harvey Nash CIO Survey 2010


4.1. Global results

The recession has had an impact on the size of bonuses

Figure 11. Base salary: global

34%
35%
29%
30%

25%
19%
20%

13%
15%

10%
4%
5% 1%
0%
00
0

0
00

0
0

00

00
00
00

,0
,0

0,

0,
0,
0,

00
75

10

20
15
$5

$2
-$

-$

-$
-$
an

n
0

ha
th

00
00

00
00

et
ss

,0
0,

,0
5,
Le

or
50
$5

00
$7

M
$1
$1

When asked about the impact of the recession on their base salary almost two-thirds,
62 per cent, of CIOs say their base salary was frozen in 2009. Another 11 per cent
received a base salary cut. Seven per cent of global CIOs had a base salary cut of less
than 20 per cent while 4 per cent had cuts of more than 20 per cent. Over a quarter of
respondents, 27 per cent, 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 per cent offering one.
Sixty-seven per cent of CIOs are offered a contributory pension while share options are
provided to 40 per cent of global respondents.

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

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

When asked if executive remuneration generally should be restrained until the


economic recovery is more robust, a resounding 59 per cent agree that salary inflation
should remain tightly controlled for the immediate future. In addition, 72 per cent say
they would consider freezing or reducing their own remuneration to help improve the
financial stability of their organisations as they emerge from the recession.

Harvey Nash CIO Survey 2010 27


4.2. United States results

There has been a subtle shift in U.S.


reporting line towards the CEO

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 per cent of the total respondent population. The number of CIOs from the U.S.
contributing to the study is up 31 per cent compared to 2009.

Ninety per cent of all C-level respondents from the U.S. are senior technology
executives describing themselves as CIO or CTO.

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

5%

16%
C-level
30%
Senior management

Mid management

Professional

49%

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


With the level of seniority in the U.S. respondents, it is not surprising to find that over
half, 56 per cent, have responsibility that stretches beyond U.S. shores. A further 31
per cent 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 per cent, reporting to the CEO or CFO. A further 13 per cent report to
the COO.

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

28 Harvey Nash CIO Survey 2010


4.2. United States results

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.


20%
20%

15%
15%

10%
10%
8% 8%

6%
4% 4%
5% 3% 3%
2% 2% 2% 2% 2% 2% 2%

0%
es
an olo on

in dc nd ing
e

ies
r

n
a
s

es
y
g

g
sin e nd

es
il
he

m
ar

io
rin

lit
rin

in
ta
vic

vic
Fin chn ati

vic
cia gy

ilit
ra t, R
Bu ive m lm a
co

oa a rtis
hc

es dia
ar

at
Ot

ita

sh
Re
tu

ee
te as P
er
te form

Ph

er

Ut
uc
er
le
alt

bli
sp
ac

ve

gin
ls

ls
ct fi
Te

ss

Ed

Pu
He

Ho
uf

Ad

ga
En
In

an

Le
M

Br

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 per cent
compared to 17 per cent globally. Healthcare is also more widely represented in the
U.S, 8 per cent, compared to 5 per cent globally. This may partly reflect the multibillion
dollar investment in technology that the U.S. healthcare industry is receiving from the
U.S. government stimulus package.

4.2.4. Budget responsibility: U.S.


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

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

Harvey Nash CIO Survey 2010 29


4.2. United States results

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 per cent, are members of their operational board, far lower than the 42 per
cent global average.

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

Figure 14. Strategic responsibility: U.S.

23%
More

Less

Same
13%

64%

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.

Cost saving 77%


Increase operational efficiencies 74%
Improve business processes 62%
Developing new products 44%
Innovation 43%
Entry to new markets 26%
Improving price competitiveness 25%
Mobile commerce 18%
Responding to globalisation 16%
Green IT 14%
Other 6%

30 Harvey Nash CIO Survey 2010


4.2. United States results

Mobile commerce receives more attention in the U.S.

Cost saving remains the top issue for U.S. CIOs with 77 per cent focusing on it this year.
Increasing operational efficiencies through technology is an objective for 74 per cent.
Innovation activities are more important to U.S. respondents with 43 per cent naming
it a key issue compared with a global average of 38 per cent. Mobile commerce receives
more attention in the U.S. with 18 per cent marking it important compared with 14
per cent globally. Green IT initiatives are a low priority for both the U.S. CIO 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 recognised as important or essential for CIOs. Strategy
and planning skills remain valued by almost 30 per cent more respondents than
in-depth IT awareness.

Table 11. Skills needed to advance to main board

Communication and influencing skills 97%


Leadership skills 97%
Strategy and planning 95%
Market understanding/knowledge 93%
Customer service 88%
ROI oriented 88%
Change management experience 79%
In-depth IT awareness 69%
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 per cent of U.S. CIOs felt an MBA would
enhance strategy and planning skills while over half, 52 per cent, felt their ability in
financial management, leadership and communication would be improved with an
MBA or similar.

There was a significant increase in the number of U.S. CIOs who believe their
organisation is suffering from a technology skills shortage. In 2009, 49 per cent of
respondents agreed that their IT function lacked the skills needed to compete. This year
that number has jumped to 62 per cent - a 13 point hike.

Perhaps as a result of surviving the recession and entering the beginning of the next
growth cycle, 68 per cent of those who said there was a skills shortage believe it is now
influencing the organisation’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 per cent, of U.S.
CIOs.

Harvey Nash CIO Survey 2010 31


4.2. United States results

U.S. CIOs are seeing strong innovation outcomes

50% Figure 15. Skills most in demand: U.S.

40% 39%
40%
37%
36%

32%

30%

22%
20%
19%
20%
16%

10%
7%

0%
en ip
aly ess

r
e

t
y
en t

y
t

he
en
em jec

en
ur

eg

tin

rit
em sh
t
sis
an sin

Ot
ct

em
pm

cu
at

ag n
ag Pro

s
Te
an tio
ite
Bu

str

Se
ag
lo
ch

m ela

ve
IT

an
Ar

sr

De

m
an

es

ice
m

sin

rv
Bu

Se

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 per cent 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 per cent, invest 4 per cent
or more of their IT budget in innovation activity. Globally that number is 59 per cent.

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

% IT budget invested U.S. Global av


< 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 per cent, report
innovation ROI of 10 per cent or above.

32 Harvey Nash CIO Survey 2010


4.2. United States results

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 per cent, feel their technology innovation is very successful. A further 51 per
cent are content with the success of their innovation activity while less than one-third,
31 per cent, feel their success has been limited.

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

18%
Very successful
31%
Reasonably successful

Limited success

51%

The majority of U.S. CIOs use collaboration for customer-facing innovation activity.
Almost two-thirds, 64 per cent, collaborate to speed up the development and delivery
of products and services to enhance the customer experience. Additionally, 62 per
cent collaborate to improve the quality of products and services. Fifty-five per cent
of respondents cite maximising resource utilisation 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 behaviours for collaborating is the top barrier
in the U.S. and globally, less than a quarter of U.S. respondents, 23 per cent, rate it as a
significant issue compared to 28 per cent of global CIOs.

Table 13. Barriers to collaboration: U.S.

Rank Barrier %
1 Lack of agreed behaviours 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 per cent of U.S. respondents work with suppliers
on innovation projects, the global average is 56 per cent. However, CIOs from the U.S.
are more inclined to collaborate with customers, 37 per cent in the US compared to
34 per cent globally.

Harvey Nash CIO Survey 2010 33


4.2. United States results

2010 and 2011 IT budget outlook for the U.S.


is marginally better than the global average

60%

Figure 17. Collaboration partners: U.S.

50%
46%

40% 37% 37%

30%

20%
20%

13%

10%
5%

0%
ne
rs

s
irm al

er
er

or
lie

s f ion

No

th
m

tit
s
pp

,o
sto

ice ss

pe
su

s
rv fe

Ye
cu

se pro
ith

co
ith
,w

ith
th
,w
s

wi

,w
Ye

s
Ye

s,

s
Ye
Ye

According to 39 per cent of respondents, the most significant trigger for innovation
will be a change in business focus. Organisational 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 per cent,
compared to the global average, 43 per cent. Just under one-third, 28 per cent, of U.S.
respondents operated with frozen budgets last year, which was within 1 per cent of the
global rate of 29 per cent.

Looking forward to 2010 and 2011 the IT budget outlook for the U.S. is marginally
better than the global average. Although 27 per cent expect further cuts this year, a
wider majority, 46 per cent compared to 43 per cent globally, expect flat budgets while
another 27 per cent in the U.S. expect a budget increase.

Investment in outsourcing by US CIOs remains relatively stable despite the pressures


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

34 Harvey Nash CIO Survey 2010


4.2. United States results

A wide range of IT functions continue to be outsourced

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


50% 48% 47%

43% 43% 44%


40%
40%
38% 38%

Increase

30%
Decrease

Stay the same


22%

20%
15%
13%
9%
10%

0%
2006/07 2007/08 2008/09 2009/10

The proportion of U.S. CIOs indicating they are planning to invest more in outsourcing
activity this year is flat at 38 per cent. However, there has been a significant drop
in U.S. respondents cutting outsourcing projects. Last year 22 per cent of U.S. CIOs
cut projects as budgets were threatened. This year 15 per cent 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 per cent
holding spending at last year’s levels.

The most important reason to outsource for U.S. CIOs remains cost reduction. Fifty
-one per cent of respondents rate it as a top priority compared to a global average that
is 12 points lower at 39 per cent. 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 per cent of U.S. respondents naming it as a function that
they outsource.

Table 14. IT functions outsourced: U.S.


IT function outsourced % who outsource
Software 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%

Harvey Nash CIO Survey 2010 35


4.2. United States results

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 per cent of U.S. respondents said they were planning to maintain or increase
their offshore activity in the next 12 months.

This 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 per cent in 2007 to 38 per cent today.

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


80%
73%
68%
70%

58%
60%
Met expecations

50% Fell below expectation

38% Exceeded expecations


40%

30%
27%
21%
20%

10% 6% 5% 4%

0%
2007/08 2008/09 2009/10

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

Table 15. Priorities for 2010: U.S.

Further cost reduction 34%


Actively looking to invest, innovate and overtake weakened competitors 31%
Clearing a backlog of projects 21%
Maintaining business as usual with minimal new initiatives 14%

36 Harvey Nash CIO Survey 2010


4.2. United States results

Only 15 per cent 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 per cent, and those who continue to adopt a cautious fiscal
approach to their business operations with additional cost cutting, 34 per cent.

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

Encouragingly, 28 per cent of U.S. CIOs say their ROI from IT projects was unaffected
by the recession. A further 24 per cent 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 per cent will not be utilising any
SaaS approach in 2010 while 42 per cent will be delivering some products or services
via SaaS. Thirty-nine per cent 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.

4%
15%
None, we run all applications in-house

Some, but not more than we do already


39%
More than we do already

We want to move to a mainly SaaS model


42%

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

Harvey Nash CIO Survey 2010 37


4.2. United States results

60 per cent of U.S. respondents are pursuing


a wider cloud computing approach in 2010

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

Yes
40%
No

60%

There are a range of reasons behind why 60 per cent of U.S. respondents are
pursuing a wider cloud computing approach in 2010. Achieving greater flexibility for
their organisation is one reason given by 61 per cent of those adopting more cloud
computing initiatives. Fifty-seven per cent are pursuing the same strategy to reduce
costs while 40 per cent are looking for cloud computing to increase operational
efficiency. Finally, 26 per cent 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 and face-
to-face approach for internal messaging versus online and social networking related
channels.

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


Regular update meetings 72%
Regular update emails 68%
Corporate intranet 66%
Social networks 25%
Corporate blog 22%
Personal blog 11%
No internal communication plan for IT 7%

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

38 Harvey Nash CIO Survey 2010


4.2. United States results

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.
35% 32%

30%
27% 27%
25% 25%
25% 23% 2007/08
22%
21% 21%
2008/09
19%
20% 18%
2009/10

15% 13%
11%
9%
10%
7%

5%

0%
Less than 1 year 1 - 2 years 2 - 5 years 5 - 10 years More than 10 years

Only seven per cent of U.S. respondents have been employed less than one year with
their current organisation, compared to 11 per cent last year. Those who have been
with their employer less than 24 months also dropped from 21 per cent in 2009 to 13
per cent this year.

U.S. CIOs in the mid range of tenure (two to five years) had the biggest population
growth, up from 22 per cent last year to 32 per cent now. There are fewer U.S.
respondents in the longest tenure category (more than ten years), dropping from 27
per cent to 23 per cent, 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. emerged from the recession at the end of Q3 last year. This has led to a
relative normalisation of career ambition for the next 12 months within the U.S. CIO
community. Nineteen per cent are planning a career move in the next year with a
further 19 per cent planning to move in the next 24 months. While this is slightly below
the global average of 25 per cent looking to move during the next 12 months and 23
per cent 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 even though it has been
on a steady decline since 2006. In that year, 88 per cent of U.S. CIOs said they were
fulfilled or very fulfilled in their role. In 2007, it dropped to 79 per cent and in 2008 to
75 per cent. Last year, it fell another 6 per cent to 69 per cent.

Harvey Nash CIO Survey 2010 39


4.2. United States results

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
per cent 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 per cent higher
compared to last year’s figures and is at 16 per cent today. In addition, 28 per cent
of respondents say they are seeking a new job in order to have greater involvement
in business strategy, while another 28 per cent are looking for a fresh challenge. To
that end, 39 per cent 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


35%
34%
35% 33%

27% 29%
30%

25% US
19% Global
20%

13%
15%

10%

4%
3%
5%
1% 1% 1%

0%
Less than $50,000 $50,000 - $75,000 $75,000 - $100,000 $100,000 - $150,000 $150,000 - $200,000 More than $200,000

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 per cent of U.S. respondents earn a base salary between $150,000
and $200,000. Finally, 33 per cent of U.S. CIOs, 14 per cent more than the global
average, enjoy a base salary of more than $200,000.

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

40 Harvey Nash CIO Survey 2010


4.2. United States results

Fifty-eight per cent agree that executive


remuneration generally should be restrained

Bonuses remain a benefit enjoyed by 85 per cent 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 per cent of U.S. respondents versus a global average of 40 per
cent. A company car is offered to only 12 per cent in the U.S. versus a global average
of 50 per cent.

Considering the cuts to base salary and scaled-back benefit packages last year, it is
perhaps unsurprising that satisfaction with remuneration is down from 85 per cent to
73 per cent this year.

U.S. respondents recognise that in extraordinary economic circumstances sacrifices are


needed by all. Fifty-eight per cent agree that executive remuneration generally should
be restrained until the economic recovery is more robust. In fact, 70 per cent would
consider freezing or reducing their own remuneration further to help improve the
financial stability of their organisation.

Harvey Nash CIO Survey 2010 41


4.3. Europe results

A total of 1,491 European technology leaders


took the time to analyse their priorities

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 to participate in this survey. This response
is up 11 per cent from 2009, which was also a record-breaking year.

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

Figure 24. Breakdown of respondents by job function: Europe

3%
12%
C-level

39% Senior management

Mid management

Professional (non-managerial)
46%

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 organisations. Almost one-third, 32 per cent,
report directly to the CEO. Almost one in five, 17 per cent, report to the CFO and a
further 11 per cent report to the COO.

There is no change in the board representation for European CIOs compared to figures
from 2009. Previously 46 per cent of European respondents sat on their operational
board while 54 per cent 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 per cent of respondents
had a global remit compared to 28 per cent this year, a drop of 6 per cent. European
respondents are also less global in their scope of responsibility this year when compared
to U.S. respondents, 44 per cent of whom operate globally.

42 Harvey Nash CIO Survey 2010


4.3. Europe results

Technology leaders from the public sector and government


departments remain an important community

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, and with 16 per cent of respondents
coming from each European sector this year also they are 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 per cent of the respondent
population in 2009 to 6 per cent today.
20%
Figure 25. Top industry sectors: Europe

16% 16%

15%

10%
8%

6% 6%
5% 5% 5%
5% 4% 4%
3% 3% 3%

0%
s

es
es
s

k
gy

e
Bu nme and

tic d
er

m
il
ice

in
tio
rin

ar
gis n
ta

vic
vic
h
lo

co

dr
lo rt a
nt

hc
Ot
v

c
Re
tu
no

r r

er
er
er

tru
le
ve to

d
alt
ac

Te

an

ls
ss
ls

ch

go ec

sp

ns
He
uf

ga
cia

es
te

od
cs

an

Co
an

Le
sin
an

Tr

Fo
bli
M
io
Fin

Pu
at
rm
fo
In

4.3.4. Budget responsibility: Europe


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

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

Harvey Nash CIO Survey 2010 43


4.3. Europe results

64 per cent of European respondents say the


role of the CIO is becoming more strategic

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

Sixty-four per cent 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 per cent 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

80% 76%

More strategic responsibility


70%
64% 64%
62%

60% 57%

50%

40%

30%

20%

10%

0%
2006 2007 2008 2009 2010

4.3.5. Key issues for technology to address: Europe


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

44 Harvey Nash CIO Survey 2010


4.3. Europe results

The top issue for European CIOs is


increasing operational efficiencies

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

% prioritise % prioritise
Business issue EU U.S.
Increase operational efficiencies 75% 74%
Improve business processes 74% 62%
Cost saving 73% 77%
Innovation 37% 43%
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 US CIOs remain
a little more cost-sensitive to business planning in 2010 compared to their European
peers. At 75 per cent the top issue for European CIOs is increasing operational
efficiencies. This compares to outright cost saving which is a priority for 77 per cent
of US CIOs.

4.3.6. Skills: Europe


European CIOs have long recognised the importance of communication and influencing
skills in their senior executive advancement. This year is no exception with 77 per cent
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 per
cent, 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 per cent of Europeans and
62 per cent 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 per
cent of CIOs feel executive education can promote better leadership, compared with
almost double, 80 per cent, in the U.S.. Similarly only 39 per cent of Europeans think
communication and influencing skills are improved while a whopping 82 per cent of
U.S. CIOs feel they are enhanced.

More than half of European respondents, 56 per cent, believe their organisation is
suffering from a skills shortage, up 2 per cent from last year. While there is certainly a
growing awareness of a skills shortage in Europe, it is less pronounced than among the 62
per cent of U.S. CIOs who are currently concerned about a lack of skills. When it comes
to the impact on the organisation 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 overleaf.

Harvey Nash CIO Survey 2010 45


4.3. Europe results

Innovation activity is down


marginally in Europe this year

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


60% 56%
54%

50%

US
40%
Global

30%
26%

20%
20%

12% 12%
10% 10%
10%

0% No impact - Minimal impact - Some impact - Significant impact -


growth as planned growth potentially slowed growth slowed but will continue growth severely limited

Business analysis skills are in most demand by European CIOs, 46 per cent. Project
management ability is sought by 36 per cent of respondents and architecture skills by
34 per cent. The most significant difference in skill shortages is in IT strategy where 36
per cent of U.S. CIOs believe it is lacking in their organisation compared to only 25 per
cent 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 per cent of European respondents. That
number is down slightly from 67 per cent 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


60% 56% 58%

50%

2010
40%
2009
29%
30% 26%

20% 16%
13%

10%

0%
Yes, targets reflect the need to innovate Yes, but no targets are set No, innovation expected only in business units

46 Harvey Nash CIO Survey 2010


4.3. Europe results

They are undertaking innovation in a less


targeted way than their U.S. peers

The U.S. undertakes more targeted innovation, 34 per cent versus 26 per cent in Europe.
However, when it comes to measuring successful innovation, 73 per cent of European
CIOs have seen success while only 69 per cent 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
per cent of European CIOs invest more than 4 per cent of their IT budget on innovation
projects, compared to 55 per cent in the U.S. and a global trend of 59 per cent.

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

  Europe U.S. Global av


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 per cent of European respondents believe they have undertaken successful
innovation collaboration this year also. Innovation collaboration rates were down only
two per cent on pre-recession figures.

Almost two thirds, 59 per cent, of European CIOs make collaborating with other
organisations 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 per cent.

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 per cent of European
respondents working with suppliers this year compared to 54 per cent last year.
Customers are collaboration partners for just under one-third of European CIOs, 32
per cent.

Harvey Nash CIO Survey 2010 47


4.3. Europe results

Concerns about security have increased significantly

Choosing to collaborate with professional services firms is a key difference between


U.S. respondents, 37 per cent, and European respondents, 28 per cent.

For European CIOs, barriers to innovation collaboration are more significant this year.
30%

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


30%
25%
22%
21%
2010
20%
18%
2009
15% 15%
15% 13%

10%
10%
9%
7%
6%
5%
5%

0% Not being
Lack of agreed Resistance Physically Concerns Technology
behaviours among dispersed teams about security tools are able to find
for collaborating potential users ineffective the right people

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 per cent now citing it as a major barrier. Almost one-third now feel that lacking
agreed behaviours for collaboration will limit or prevent future innovation collaboration
success.

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

48 Harvey Nash CIO Survey 2010


4.3. Europe results

IT budgets in Europe remain under severe pressure

4.3.8. IT budgets, outsourcing and offshoring: Europe


IT budgets in Europe remain under severe pressure with 43 per cent experiencing
budget cuts in the last 12 months. A further 29 per cent had frozen budgets. Although
the environment seems to be improving, and budget figures suggest this, 30 per cent
of European CIOs still expect to be operating with lower budgets this year and 41 per
cent 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 per cent
saying they will maintain or increase investment in outsourced activity this year. It
appears that European CIOs are bullish with 11 per cent investing more than 50 per
cent of their IT budget in outsourced activity compared with only 6 per cent of U.S.
respondents.

Thirty per cent of Europeans invest less than 6 per cent of their overall IT budgets in
outsourcing which is in line with 29 per cent of U.S. CIOs. Those who invest between 5
and 10 per cent of budget are the same in both regions at 22 per cent.

Figure 30. IT functions outsourced: Europe


60%
60% 56%
52%

50%

40%

30%
22%

20%

9% 8%
10% 6%
1%
0%
t
e
en n

nc n

O
n

O
en
ur
pm io

na io

io

BP

BP

KP
t

e
t

tm
lo at

te cat

at
uc

HR

IT
ve lic

gr

ar
ain li
str
de app

m app

p
nt
fra

de
si
in
e

IT
ar

ar

m
IT
ftw

ftw

ste
Sy
So

So

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
per cent this year at 52 per cent compared to 47 per cent last year.

Harvey Nash CIO Survey 2010 49


4.3. Europe results

The outlook for offshore outsourced activity looks positive

While the largest group of European respondents, 37 per cent, 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 prioritised by 35 per cent
of European CIOs.

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

However, 9 per cent 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 per cent 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

12%
Yes

No

88%

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

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

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

50 Harvey Nash CIO Survey 2010


4.3. Europe results

Organisations emerge from the stormy clouds of recession

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 organisations emerge from the stormy clouds of
recession into a brighter scene of recovery and growth.

Table 19. Priorities for 2010: Europe

Further cost reduction 32%


Actively looking to invest, innovate and overtake weakened competitors 32%
Clearing a backlog of projects 21%
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 capitalise on emerging growth opportunities. In the case
of the Europeans, both priorities were given prominence by 32 per cent of respondents.

Clearing the backlog of projects stalled by the recession will be a priority for one-fifth of
European CIOs, 21 per cent, while 16 per cent 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 per cent expect to recover the ROI lost during the
recession in the next 12 months while for 22 per cent of European CIOs it will take
between one and three years to recover. For 3 per cent 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

4%

29% None, we run all applications in-house


29% Some, but not more than we do already

More than we do already

We want to move to a mainly SaaS model

38%

Harvey Nash CIO Survey 2010 51


4.3. Europe results

The decision to adopt a cloud computing


platform will lag behind U.S. peers

For 29 per cent of European CIOs there will be no SaaS activity in 2010. For the
remaining 71 per cent, 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 per cent plan to move to a mainly SaaS model. The remaining 38 per cent 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.


60%
60%

52%
48%
50%

40% Yes
40%
No

30%

20%

10%

0%
Europe US

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

Added flexibility was given as the reason why 61 per cent of European CIOs are
considering cloud computing while 56 per cent 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 per cent will use a combination of the
company intranet and physical meetings while 60 per cent will use regular emails.

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

52 Harvey Nash CIO Survey 2010


4.3. Europe results

European CIOs are indicating they are ready to move

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 per cent.
The largest group, 30 per cent, has been with their current employer 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 per cent, will be looking for their next career move in the next
12 months. This is in line with the global average, 25 per cent, and slightly higher than
the churn expected in the U.S., 19 per cent.

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

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

  2010 2009
Very fulfilling 33% 33%
Quite fulfilling 46% 46%
Not very fulfilling 16% 17%
Not at all fulfilling 5% 4%

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

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

Harvey Nash CIO Survey 2010 53


4.3. Europe results

Base salaries for European CIOs are


closely in line with the global average

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 av. vs. U.S.
36% 35% 35%
35% 33%

29%
30% 28%
27%

25% Europe

Global av.
19%
20%

16% US
14%
15% 13%

10%

5%
4%
5% 3%
1% 1% 1% 1%

0%
Less than $50,000 - $75,000 - $100,000 - $150,000 - More than
$50,000 $75,000 $100,000 $150,000 $200,000 $200,000

The majority of European respondents, 36 per cent, earn within the $100,000-$150,000
base salary range. A further 28 per cent 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 per cent of European CIOs have taken a base salary cut while 63 per cent 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 per cent of European CIOs. Almost one-third of bonuses, 29
per cent, amounts to between 10 per cent and 20 per cent of base salary. This is flat on
previous years. A contributory pension is offered to 74 per cent of European CIOs and
62 per cent benefit from a company car.

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

Finally, when asked if they would consider freezing or reducing their own remuneration
to help  improve the financial stability of their organisation as it emerges from the
recession, 73 per cent said they would be prepared to do so. This is in line with U.S.
sentiment, 70 per cent, and the global trend, 72 per cent.
54 Harvey Nash CIO Survey 2010
5. European country and regional profiles

Harvey Nash CIO Survey 2010 55


5.1. Country profile: Belgium

About the respondents


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

Belgium Skills
Regarding their own skills, Belgian CIOs are less focused on communication and
influencing skills, 54 per cent, compared to the global average of 78 per cent. They
are more intent on developing their strategy and planning abilities, which 68 per cent
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 per cent of
Belgian respondents said growth will probably be slowed by the shortage of skills this
year, compared to 54 per cent globally. Project management skills are most in demand
by Belgian organisations, 53 per cent, while architecture and business analysis are sought
by 43 per cent of respondents.

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

Yes No
80%

70%
67%

58%
60%
Yes

50% No
42%
40%
33%

30%

20%

10%

0%
Belgium Global

Innovation and collaboration


Encouragingly, 85 per cent of Belgian CIOs continue to place innovation and collaboration
at the heart of their technology strategy, up 2 per cent on last year’s figures. Innovation
success is also leading to higher investment. Eighteen per cent of Belgian respondents
say they will invest more than 15 per cent of their IT budget this year on innovation
activity, which is 3 per cent higher than the global average.

Only 7 per cent believe their innovation collaboration has been unsuccessful while 60
per cent 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 behaviours, referred to by 37 per cent of Belgian CIOs.

56 Harvey Nash CIO Survey 2010


5.1. Country profile: Belgium

2010 priorities
Belgian CIOs are going to be more focused on cost cutting this year. Thirty-seven per The impact of the
cent will make it a priority compared to 32 per cent globally. The recession also has
pushed ROI on technology back between one and three years for more than a quarter global recession
of Belgian respondents, 26 per cent. However, focus will be given to SaaS as a means to is seen in the
return ROI quicker by 30 per cent of respondents, while 56 per cent of Belgian CIOs will
also turn to cloud computing to help. career churn of
Belgian CIOs
IT budgets, outsourcing and offshoring
With 73 per cent 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 per cent of Belgian CIOs will increase investment in outsourcing this
year while another 54 per cent will maintain investment.

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

Career and compensation


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

FigureBelgium
36. Time expected to stay with
09 Belgium 10current employer: Belgium 2009 vs. 2010
40%
36% Belgium 2009
35%
35%
Belgium 2010
30%
25%
23% 23%
25% 22%

20%

14%
15% 12%

10%
5% 5%
5%

0%
Less than 1 year 1 - 2 years 2 - 5 years 5 - 10 years More than 10 years

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

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

Harvey Nash CIO Survey 2010 57


5.2. Country profile: France

About the respondents


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

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

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

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

Yes No
80%

70%
70%

58%
60%
Yes

50% No
42%
40%

30%
30%

20%

10%

0%
France Global Av.

Innovation and collaboration


Innovation activity remains important to IT strategy for 55 per cent of French CIOs,
but this is significantly below the 83 per cent 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 per cent each. Innovation projects are completed with a
goal to speed up the development and delivery of products and services by 75 per cent
of French CIOs.

58 Harvey Nash CIO Survey 2010


5.2. Country profile: France

2010 Priorities
Further cost reduction will be the highest priority in 2010 for the majority, 56 per cent, IT budgets remain
of French respondents. Global CIOs are more pessimistic about the impact of the
recession on IT projects than French CIOs. Only 11 per cent of French respondents under pressure in
believe ROI from projects will be delayed between one and three years compared to 22 France
per cent 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 per cent of French respondents plan to undertake more
SaaS activity this year compared to 31 per cent globally. Similarly, cloud computing will
play a greater role for 78 per cent of French CIOs compared to 51 per cent globally.

Figure 38. Use of greater SaaS and cloud computing in 2010: France vs. global average
Yes No 78% France
80%

70%
Global av.

60% 56%
51%
50%

40% 31%

30%

20%

10%

0%
Saas Cloud Computing

IT budgets, outsourcing and offshoring


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

Software application development, 44 per cent, and software application maintenance,


67 per cent, are among the top outsourced IT functions alongside Human Resource
outsourcing, 56 per cent.

Career and compensation


Although more than half, 56 per cent, of French CIOs have been with their organisations
for more than ten 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 per cent lower than the global average at 67 per cent.

Over one in five, 22 per cent, of French CIOs earn more than $200,000 in base salary
and a further 67 per cent earn more than $100,000. Base salary freezes have affected
more French respondents than the global average, 89 per cent compared to 62 per cent.
However, salary cuts are far higher in regions other than France.

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

Harvey Nash CIO Survey 2010 59


5.3. Country profile: Germany

About the respondents


Collaboration on German respondents to the 2010 survey are from a variety of industries and are senior
in nature. One-quarter of German CIOs, 25 per cent, have a global outlook and a further
innovation projects 42 per cent have some level of international responsibility.
is widely used in
Forty-two per cent of German CIOs report directly to the CEO, higher than the global
Germany average of 29 per cent. Seventy-five per cent of German respondents also have a seat
on the operational board and 83 per cent see the role of the CIO becoming more
strategic in the next 12 months, significantly higher than the 64 per cent global average.

Figure 39. Strategic influence of CIO in 2010: Germany vs. global average
90%
Yes No
83%

80%

70% 64%

60%

50%

40%

30%

20%

10%

0%
Germany Global av.

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

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

Innovation and collaboration


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

Collaboration on innovation projects is widely used in Germany. Sixty-seven per cent


use collaboration with suppliers and customers to speed up development and delivery
of products and services, while 50 per cent say it is used to enhance the quality of
products and services as well as to attract and retain talent.

60 Harvey Nash CIO Survey 2010


5.3. Country profile: Germany

2010 priorities
German CIOs appear to be more aggressively looking to invest, innovate and overtake German CIOs
weakened competitors in 2010. Fifty per cent are adopting this approach compared to
only 31 per cent globally. appear to be
more aggressively
The use of Software as a Service (SaaS) will be on the agenda of 83 per cent of German
CIOs in the coming 12 months, compared to 75 per cent globally. However, the use of looking to invest
cloud computing has German respondents split evenly with 50 per cent saying they will in 2010
consider the platform in future while half have other priorities.

IT budgets, outsourcing and offshoring


Spending on outsourced projects is forecast to increase by almost 80 per cent 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 per cent of respondents.

Software application development and software application maintenance are the most
popular processes to outsource and 75 per cent 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 per cent, of German CIOs. This is significantly more than the global
average of 11 per cent and the European average of 13 per cent.

Career and compensation


Although German CIOs have, like most of their global peers, decided to ride out the
economic storm with their current employers, 60 per cent are now considering a move
in the next 12 months. In a worrying trend for German employers, 40 per cent of German
CIOs are unfulfilled in their current role. That number is far higher than the 18 per cent
global average, and is 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 per cent 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 organisation, 80 per cent
compared to 72 per cent globally.

Germany
Figure Global
40. Upper bracket Av levels: Germany vs. global average
remuneration
50%

41%
39%
40%

34% Germany
29% Global av.
30%

20%
19%
20%

10%

0%
$100,000 - $150,000 $150,000 - $200,000 More than $200,000

Harvey Nash CIO Survey 2010 61


5.4. Country profile: Ireland

About the respondents


Irish respondents Over half of CIOs surveyed in Ireland, 54 per cent, oversee technology departments
with an international outlook. However, despite these senior indications, 60 per cent
overwhelmingly of Irish respondents do not have a seat on the operational board of their organisation.
look to innovation Furthermore, when asked if the role of the CIO is becoming more strategic, 57 per cent
agreed, which is lower than the 64 per cent global average.
to drive competitive
advantage Skills
Cost saving is a priority for 75 per cent 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 per cent, and project
management, 30 per cent.

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

Innovation and collaboration


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

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

Figure 41. Barriers to successful collaboration: Ireland


30%
27%

25%

20%
17%

14%
15%
13%
12%

10% 8%

5%

0%
at rs

ct ols
ity

us ng
am d
eo ind
or iou

te rse
g

ur

ffe to
ive

ial o
s
s
ple
in

tp of

er
nt am
lab av

ec

ne y
sp
igh le t

e i og
ol eh

ts

te ce
di

ar nol
rc b

ou

er b

po tan
lly
th ng a
fo eed

ab

ch
ica

sis
Te
r

ns

i
ag

ys
be

Re
er

Ph
of

t
nc

No
ck

Co
La

62 Harvey Nash CIO Survey 2010


5.4. Country profile: Ireland

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

IT budgets, outsourcing and offshoring


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

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 per cent, and Vietnam, 5 per cent, are also growing offshore outsourcing hubs
for Irish CIOs.
Ireland Global Av.
80% Figure 42. Top four offshore outsourcing destinations: Ireland vs. global average

70% 66%

60%
52% Ireland

50% Global av.

40%

30%

17%
20% 15%
11% 10% 10%
10%
3%

0%
India Eastern Europe Ireland UK

Career and compensation


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

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

Harvey Nash CIO Survey 2010 63


5.5. Country profile: Netherlands

About the respondents


Innovation remains CIOs from the Netherlands overwhelmingly reflect a senior figure at their organisations.
Sixty-one per cent have an international remit and their reporting lines also reflect
centrally important to senior status with 56 per cent working directly for the CEO or CFO, a higher percentage
the majority of Dutch than the global average.

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

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

Almost two-thirds, 65 per cent, of those who identified a skills shortage believe it will
have a material impact on organisational 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 per cent and globally at 44 per cent. Architecture skills are
needed by 35 per cent of respondents locally and globally.

Innovation and collaboration


Innovation remains centrally important to the majority of Dutch respondents with 82
per cent 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 per cent.

Innovation collaboration is growing in prominence in the Netherlands. Ninety-two per


cent 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 behaviours, 26 per cent, but the process continues apace and especially
with suppliers.

Netherlands Global Av
80%
Figure 43. Innovation collaboration partners: Netherlands vs. global average
68%
70%

60% 56%
Netherlands

50% Global av.

40% 35% 34%


33%
30%
30%
21%
20% 15%
12%
10%
10% 5% 5%

0%
Suppliers Customers Pofessional None Competitors Other
services firms

64 Harvey Nash CIO Survey 2010


5.5 Country profile: Netherlands

2010 priorities
Priorities for 2010 reflect a sharp contrast with global trends. Figure 44 below suggests Priorities for 2010
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 reflect a sharp
weakened by recession. contrast with
Figure 44. 2010 technology priorities: Netherlands vs. global average global trends
Netherlands Global Av
40%
40% Netherlands

35% 33% 31% Global av.


30%
30%

25% 21%
20%
15% 15% 15%
15%

10%

5%

0%
pe en te

ive h
ec g
ct ost

at it
oj lo

m ak va
tit ed

iti w
s
ts
n

pr ck
du c

co we nno
io

in al
s
re her

of a ba

or

w su
ke , i
rt

ne s u
ta st
Fu

er ve

al s a
rin

ov In

im es
ea

in in
Cl

m us
B
d
an

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

IT budgets, outsourcing and offshoring


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

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

Career and compensation


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

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

Harvey Nash CIO Survey 2010 65


5.6. Regional profile: Scandinavia

About the respondents


Scandinavian 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.
CIOs believe Scandinavian CIOs have an international outlook with 52 per cent having responsibilities
communication internationally.

and influencing More Scandinavian CIOs sit on the board, 58 per cent compared to 42 per cent globally.
They also have positive expectations for the future role of the CIO. Eighty per cent say
skills are key to
they feel it will become more strategic this year.
advancement
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 per cent deeming them ‘essential’ compared to 78
per cent globally.

Seventy-two per cent of Scandinavian CIOs say they suffer from a skills shortage on their
technology team, which is far higher than the global average of 58 per cent. 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.
Scandinavia Global Av
80%

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


70%
62%
60%
Scandinavia
49%
50%
44% Global av.

38% 37%
40% 35%
31%
30%
27%28% 27%
22% 21% 23%
21%
20% 16%
14%
11%
8%
10%

0%
en e
y

em hip
t

ity
is
e

ng
en

en
em rvic
eg
ur

lys

ur
sti

ag ons

t
em

pm
ct

t
at

en
na

Se

c
Te
ite

str

Se
ag

lo
ti
sa
ch

ela

ve
IT
an
es

ag
Ar

De
sr
tm
sin

an
an
es

m
Bu

jec

m
in
s
o

Bu
Pr

Innovation and collaboration


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

66 Harvey Nash CIO Survey 2010


5.6. Regional profile: Scandinavia

2010 priorities
The top priority demanding focus in 2010 for Scandinavian CIOs will be clearing the The top priority
backlog of recession stalled projects, stated by 37 per cent. Twenty-five per cent of
Scandinavian CIOs have technology projects where ROI has been delayed by one to in 2010 will be
three years because of the recession. This number is marginally higher than the global clearing the backlog
trend of 22 per cent.
of recession stalled
New platforms and techniques that are seen to encourage greater ROI will also be projects
deployed by Scandinavian CIOs this year. Software as a Service (SaaS) will see more
use from 42 per cent of local respondents, higher than the 35 per cent 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

62%

60%
51% Scandinavia
49%
50% Global av.
38%
40%

30%

20%

10%

0%
Yes No

IT budgets, outsourcing and offshoring


IT budgets in Scandinavia are expected to grow for more respondents in 2010, 40 per
cent, compared to the global average of 29 per cent. This is highly relevant because
Scandinavian CIOs spend a greater proportion of their IT budget on outsourcing. Thirty-
seven per cent in Scandinavia compared to 25 per cent 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 per


cent choosing to do this compared to 53 per cent globally. Most of this outsourced
activity will occur offshore. Seventy per cent of Scandinavian respondents are satisfied
with offshore project delivery and 40 per cent expect to increase their offshore
investment this year.

Career and compensation


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

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

Harvey Nash CIO Survey 2010 67


5.7. Country profile: Switzerland

About the respondents


Respondents from In 2009, 42 per cent of Swiss CIOs reported directly to the CEO. This year that figure has
dropped to 29 per cent, and the CFO has taken on greater reporting responsibility with
Switzerland place 23 per cent of respondents reporting to them.
a higher value on
There is a growing global outlook for Swiss CIOs with 59 per cent operating internationally.
leadership skills Despite this, the number of respondents who sit on the board remains unchanged from
last year at 52 per cent. Interestingly, Swiss CIOs are more pessimistic about the future
influence of the CIO: only 48 per cent see the role becoming more strategic compared
to 64 per cent globally.

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

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

Innovation and collaboration


Switzerland has always scored well on using innovation to deliver technical ROI. This
year 74 per cent of Swiss CIOs will put innovation at the heart of their IT strategy and
more than one-third, 34 per cent, will invest more than 10 per cent 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 per cent to 57 per cent in Switzerland but has also increased globally
to 60 per cent. 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
80%
77%

70%

60%
57% 58%
60% 55% 53%
53% 53% Switzerland 2009

50% Switzerland 2010


43%
Global av.
40%

30%

20%

10%

0%
at rce

rv o t
ice f

se r y en
rv o

ice f
s
se ity

ilis ou

d ive m
io

s
an el op
d al

ut res
an qu

ts d d el
e

uc an dev
ts ce

ov
uc an

pr

up
Im
od nh

d-
pr E

ee
Sp

od
pr

68 Harvey Nash CIO Survey 2010


5.7. Country profile: Switzerland

2010 priorities
As the global recession eases and most economies emerge into a tentative recovery Job and
35 per cent of Swiss respondents are focused on clearing the backlog of technology
projects put on hold during the last year. A further 35 per cent are reducing costs remuneration
further this year while only 20 per cent will actively look to invest, innovate and overtake satisfaction
weakened competitors.
are declining in
When considering emerging technology models for 2010, a lower proportion will Switzerland
consider embracing Software as a Service (SaaS) opportunities. Only 26 per cent will
deliver more products or services via this route in 2010 compared with a 35 per cent
global average. Cloud computing faces similar scepticism with only 36 per cent of Swiss
CIOs considering a wider approach for the model compared to 51 per cent of global
peers.

IT budgets, outsourcing and offshoring


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

IT infrastructure, 62 per cent, software application maintenance, 52 per cent, and


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

Career and compensation


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

Figure 48. Level of career fulfilment: Switzerland 2009/2010 vs. 2010 global average
100%
90%

75% 76%
80%

60%

40%

20%

0%
Switzerland 2009 Switzerland 2010 Global Av.

Growing dissatisfaction does not bode well for future career stability in Switzerland with
41 per cent 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 per cent have a
base salary of more than $150,000 a year compared to 48 per cent globally.

Harvey Nash CIO Survey 2010 69


5.8. Country profile: United Kingdom

About the respondents


CIOs from the UK 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 per cent having
are investing in responsibilities beyond their national border. They also work closely with the CEO, with
innovation projects 32 per cent of CIOs reporting directly to the most senior executive.

Skills
UK CIOs value communication and influencing skills more than any other ability.
Eighty-two per cent 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 per cent said this would
add value.

Regarding their technology team, a majority of UK CIOs, 56 per cent, expect to


experience a shortage of skills this year, which is 2 per cent higher than last year. The
skills most in demand are broadly in line with global trends. Forty-five per cent need
more business analysis skills on their team compared to 44 per cent globally. Thirty-six
per cent need more project management skills compared to 37 per cent globally.

Innovation and collaboration


The overwhelming majority of UK CIOs, 83 per cent, put innovation at the centre 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 per cent will invest
more than 10 per cent in innovation projects this year compared to 32 per cent globally.
UK Global Av
80

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


70

61% 60%
58%
60% 55% 54% 53% 53% UK
51%
49%
50% Global av.
42%
40%
32% 32%
30%

20%

10%

0%
tio ty
at rce

t
ice d
ice f

hi d

len
rv o

rv an

va ivi

ns an
n
n
s
s

ps
ilis ou
se ity

io

no at

ta
se t

tio er
d en

ut res
d al

in re

in
ela om
an qu

an m

d c

ta
e

an rove
ts lop

r r st
ov

re
ts ce

lie cu
pr
uc an

d
uc ve

an
Im

pp en
od nh

Im
od e
pr p d

ct
su gth
pr E

tra
of -u

At
re
y d
er ee

St
liv Sp
de

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 recognised by
more UK CIOs than by their global peers, 49 per cent compared to 42 per cent.

70 Harvey Nash CIO Survey 2010


5.8. Country profile: United Kingdom

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

IT budgets, outsourcing and offshoring


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

Software application development is an outsourcing priority for 60 per cent of UK CIOs.


Application maintenance will be outsourced by 51 per cent and IT infrastructure by
52 per cent. The onshore-offshore mix is more balanced in the UK compared to other
countries with almost one in five, 18 per cent, undertaking outsourced work onshore in
the UK. India remains the largest offshore hub with 63 per cent of respondents active
there. Eastern Europe is also an important offshore destination with 9 per cent.

Career and compensation


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 per cent of UK
respondents believe they will be in a new job within 24 months, which is 8 per cent
higher than global trends. See Figure 50 below.

Global Av
Figure 50. CIO career churn: UK vs. global average
UK
35% 32%
31% UK
29%
30% 27%
25% Global av.
25% 23%
20%

15% 12%
8% 8%
10%
5%
5%

0%
Less than 1 year 1 - 2 years 2 - 5 years 5 - 10 years More than 10 years

Forty per cent of UK CIOs earn more than $150,000 base salary, which is 8 per cent
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 per cent of UK CIOs said they
would consider freezing or reducing their remuneration in 2010 to help improve the
financial stability of their organisation as it emerges from the recession, which is 2 per
cent higher than the global average.

Harvey Nash CIO Survey 2010 71


6. Conclusions by PA Consulting Group & Harvey Nash

Priorities for 2010


While 2008 and 2009 were two of the toughest years to with innovation success improving in all regions analysed.
conduct business in living memory, the majority of CIOs Technology is also increasingly core to the fabric of most
have emerged in 2010 with lessons learnt. For those CIOs organisations, opening up opportunities through technology
who can rise above the complexity and challenges, the new innovation to offer a differentiated proposition to customers,
environment is creating opportunities to seize competitive and thereby steal a march on competitors.
advantage and thrive.
However, there is still more room to innovate. Over half
In the new corporate landscape, a large percentage of the CIOs surveyed still don’t set innovation targets, which
CIOs continue to operate with shrinking or frozen budgets. suggests: that while the value of innovation is evident, the
However, it is the differing mindsets with which these path to innovation success is not.
technology leaders approach this new decade that is most
intriguing. It is widely accepted that organisations cannot innovate in
isolation. Collaborating to achieve successful innovation
German, U.S. and UK CIOs appear to be more proactive, has tended to be a strategy more easily adopted in times
adopting a greater focus on investment and innovation in of growth rather than during a recession. Subsequently,
order to overtake competitors weakened by the recession. In innovation collaboration with many third parties dropped
contrast, CIOs in Belgium and France plan to adopt a more during 2008-09. However, in 2010 innovation collaboration is
cautious strategy of cost control and internal efficiency back on the agenda with suppliers being the preferred partner.
improvements. Swiss CIOs are planning to put greater energy Typically this is the most straightforward route, as suppliers
into clearing the backlog of projects postponed by the have an inherent interest to collaborate with their customers.
recession.
Customers and professional services firms are also becoming
Investment in technology projects has been severely affected important collaboration partners again, but sector-wide
by the recession. Across all regions analysed, CIOs reported collaboration with competitors, the most challenging group,
projects cancelled, postponed or cut back during the last 12 remains depressed.
months.
Technology advancements have removed some of the most
While many of these programmes expect to be reinstated this significant collaboration barriers seen in recent years, making
year, the value they deliver, whether that includes efficiency it easier for CIOs and their teams to collaborate with other
savings, new revenue streams from product development or organisations. However, the survey reveals that the principal
infrastructure upgrades, will not be felt for some time. CIOs remaining barrier is the lack of clearly defined behaviours for
are acutely aware of the risk to corporate growth and stability collaboration – which is particularly true across competitor
resulting from any delay. However, in our view the successful organisations.
CIOs will be those who use the delay as an opportunity to
critically evaluate their portfolio, only continuing activities We believe that for those organisations who are able
that deliver clear business value and stopping those that don’t, to overcome this barrier there is a big prize in terms of
however long-standing they may be. competitive advantage and that they will recover faster
together than those trying to return to growth in isolation.
Innovating to grow
Over recent surveys, the percentage of CIOs asked by the New models for a new decade
business to provide technology innovation has remained The tools to innovate and collaborate have been improved
static. However, what is interesting this year is a shift in the with the growing awareness and maturity of the cloud
CIO response. A group of proactive CIOs have woken up to the computing solutions, particularly Software as a Service (SaaS).
opportunities and see innovation in technology as critically This new model for IT service delivery is leading CIOs to think
important in their post recession mission. differently about how they engage with the business and their
teams deliver value, because for the first time the business
In part, the positive evolution in the role of technology can realistically bypass IT and go direct to a Cloud service
innovation over the past few years has been driven by a provider to have their requirements met.
deeper understanding of the value innovation can provide,

72 Harvey Nash CIO Survey 2010


6. Conclusions by PA Consulting Group & Harvey Nash

There is a lot of hype around cloud computing at the start For a number of years now, the satisfaction with traditional
of the new decade, which has excitement for the cost saving outsourcing models and traditional outsourcing hubs has
opportunities it presents, but caution in overcoming many of been declining. We evidenced this again this year. The new
the technical, service and security barriers. The survey reveals models outlined above, SaaS and cloud computing, will have
that CIOs responses are split. Overall half of CIOs globally see an impact on the change, but so too will emerging locations
if as the future and will adopt in their organisation. The other which can compete with more traditional providers now that
half, have no plans during 2010. access to these regions and their low cost but high value
talent is available.
In what is a significant shift, cloud computing has created new
business models built on the economies of scale of delivering India’s dominance in offshore outsourcing is waning and
commoditized services to many different customers enabled the pace of decline is growing, although it still owns much
by the Internet. On the demand side organizations can buy of the market. The rise of Eastern Europe as a preferred hub,
IT services by use rather than owning the assets themselves. especially for European-based CIOs is undeniable. More than
All great in theory and some organisations have dabbled one in ten global CIOs now undertake offshore activity in
with by using Cloud services such as email services, CRM, Eastern Europe. That figure is significantly higher within those
development and test environments, but only a few, usually European countries closest to the region.
smaller organisations have moved their core business
applications to the Cloud. Other beneficiaries of this trend are hubs such as Vietnam,
the Philippines and even China. A greater mix of onshore
Substantive issues still have to be overcome, such as seamless and offshore resources is also expected in coming years
integration with legacy solutions, regulatory restrictions on in line with the evolution of SaaS and cloud computing. In
data storage, information security and maturity of service this environment of multiple outsourcing partners operating
delivered to customers. These objections have been well from a range of different hubs, the effective management of
flagged, but suppliers and customers developing solutions more complex and disparate outsourcing activity is going to
that will overcome these issues, such as virtual private Cloud become even more important to CIOs.
solutions.
For both CIOs and their outsourcing providers, the key
It is perhaps no surprise that as cloud is a strategic choice statistic that continues to cause concern is a growing level of
for organisations, the response is currently split. However, dissatisfaction with project management standards, despite
we expect cloud computing will grow in important over the the overall popularity of the offshore outsourcing model.
coming years as CIOs are required to take a more aggressive
approach to cost savings and efficiency drives while losing Skills for growth
none of the required organisational flexibility and growth We stated last year that when economic times are at their
potential. worst, organisations need their top talent working at their
best. The skills of the CIO and their technology team were
Outsourcing maturity tested throughout the recession. Now that most economies
An important message from the survey this year is that, with are recovering, the need for skills has not changed but their
a few exceptions, there has been very little change. However, utilisation and type of skills has.
this in itself is very significant as it demonstrates that the
outsourcing industry has now reached a stable level of Communication and influencing skills remain the most
maturity. important skills for advancement in a post-recession world.
However, leadership skills are certainly more recognised than
Outsourcing investment survived the budgetary pressures in previous years as a result of managing the technology
brought by the recession, and almost 90 per cent of CIOs will function during a very difficult environment.
be increasing or maintaining their investment this year. The
recession increased the popularity of the offshore model. The favoured communication styles of CIOs have also
However, currents below the surface may indicate that evolved as a result of the recession. More emphasis is being
changes are emerging in the outsourcing demands expressed given to face-to-face and other more personal mediums,
by many CIOs. especially for internal use. Web-based social networks are

Harvey Nash CIO Survey 2010 73


6. Conclusions by PA Consulting Group & Harvey Nash

evolving, and, while not typically being used by CIOs for We certainly see a more complex and challenging environment
internal communications, business-focused networks such as ahead for the CIO. The recession may have been successfully
LinkedIn are showing significant potential as mechanisms for negotiated by many, but the economic landscape has been
knowledge exchange and collaboration. changed for ever. Those CIOs who recognise this first, and
who are able to identify and pursue technology trends in
The further development of cloud-based solutions, many of emerging markets, will be the ones to prosper most in the next
which will be provided via outsourced arrangements, is also growth cycle. Those who can’t, or won’t, accept that the world
creating the need for CIOs to have enhanced commercial has changed run the risk of being left behind.
understanding of the market and a heightened awareness
of managing a multi-source economy of supply. Therefore Salary sensitivity
as well as being a great leader of their team, the CIO needs The vast majority of global respondents experienced a salary
to be a far more informed buyer in the emerging world. The freeze in 2009 with about one in ten seeing their salary cut.
individual cannot possibly span all of the aspects, which has Conditions are improving in 2010 but most CIOs are realistic
great implications on the nature and scope of the future IT about the need to manage cost within a fragile economic
organisation a CIO designs and manages. environment. In fact almost three-quarters of respondents
say they would consider freezing or cutting their own salary
Formal executive education, such as an MBA, is growing in in 2010 to improve the financial stability of their organisation.
popularity among the CIO community. Many CIOs used the
recession to explore adding to their skills with almost two- However, very real differences in remuneration have emerged
thirds believing an MBA would improve their strategy and during this research which potentially risk upsetting the
planning ability. current harmony between CIOs and their employers.

In 2010 the technology skills shortage is also returning to Talent is global in the 21st century economy and CIOs in
prominence. Globally the demand for skills has returned with Belgium and Ireland who are struggling to retain parity in
hot spots identified in Scandinavia, Switzerland, the U.S., the compensation could be forgiven for looking enviously at
Netherlands, Belgium and Germany. In line with their more the remuneration enjoyed by their U.S. and German peers.
sluggish economic recovery, the UK and France appear to be Overall job satisfaction has been one of the casualties of
less severely impacted by the skills shortages. the recession and is down 4 per cent this year, and worse in
selected countries.
As growth returns, we expect to see the demand for skills
continue to rise across Europe and the U.S. as organisations The implications are twofold. Firstly the CIOs themselves may
return to investing for the future. However, we would not seek to fulfil their career ambition elsewhere leaving their
be surprised if highly skilled individuals in these regions also organisations vulnerable, and secondly motivating a highly
began looking further afield to high-growth markets in Asia skilled technology team while not fulfilled yourself, could have
for their next career opportunity, leaving a greater skills gap a negative impact on the 2nd and 3rd tier leaders who report
at home. to the CIO.

The rise of the CIO Although CIOs remain cautious about moving jobs due to
The CIOs reward for their recession-busting performance the wider economic fragility, the risk of high-level departures
seems to be a stronger strategic voice and, in many cases, a grows. With the widening economic gap between a fast-
seat on the operational board. The strategic focus of the CIO growing East and indebted West, it is not unrealistic to
is growing too with almost three-quarters of respondents to believe that ambitious CIOs will look at China and other Asian
the survey foreseeing a greater role in strategy decisions in countries as a way to fast-track their career and maximise
2010. their earnings.

However, career development signals for CIOs are not all This would certainly be a net loss to organisations in Europe
positive. Careers were certainly stunted by the recession and and the U.S. which could lose the skills that helped bring them
CIOs are now more wary about moving to their next role until through the recession. However, for future CIOs currently in
the economic environment stabilises further. the 2nd or 3rd tier of technology management this could

74 Harvey Nash CIO Survey 2010


6. Conclusions by PA Consulting Group & Harvey Nash

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 recognise 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

Harvey Nash CIO Survey 2010 75


EUROPE USA
London Hamburg New Jersey
13 Bruton Street, London, W1J 6QA, UK Hamburg Fleethof, Stadthausbrücke 1 U.S. Corporate Headquarters,
Tel: +44 (0)20 7333 0033 D-20355 Hamburg, Germany 1680 Route 23 North, Suite 300, Wayne,
Fax: +44 (0)20 7333 0032 Tel: +49 (0)40 376 44 546 NJ 07470, USA
Fax: +49 (0)40 376 44 642 Tel: +1 (973) 646 2100
Birmingham Fax: +1 (973) 696 3985
4302 Waterside Centre, Birmingham Business Park, Nürnberg
West Midlands, B37 7YN, UK Thurn-und-Taxis-Str.10 California
Tel: +44 (0)121 717 1919/1900 D-90411 Nürnberg 225 Bush Street, Suite 1840 San Francisco,
Fax: +44 (0)121 717 1918/1901 Tel: +49 (0)911 30874 4168 CA 94104, USA
Fax: +49 (0)911 30874 3856 Tel: +1 (415) 901 0910
Leeds Fax: +1 (415) 901 0920
Marshalls Mill, Marshall Street, Leeds, LS11 9YJ, UK Utrecht
Tel: +44 (0)113 202 8900 Kantorenpark Corner Plaza, Illinois
Fax: +44 (0)113 245 3255 Gebouw B, Planetenbaan 25, 415 N. LaSalle Chicago,
3606 AK Maarssen, The Netherlands IL 60654, USA
Edinburgh Tel: +31 (0)346 581 070 Tel: +1 (312) 543 7314
22 Young Street, Edinburgh, EH2 4JB, UK Fax: +31 (0)346 581 080 Fax: +1 (773) 525 1871
Tel: +44 (0)131 220 3700
Fax: +44 (0)131 220 3717 Groningen Colorado
Verlengde Hereweg 173, Trinity Place, 1801 Broadway, Suite 1000, Denver,
Dublin Groningen, 9721 AP, The Netherlands CO 80202, USA
Unit 2, 51 Sir John Rogerson’s Quay, Tel: +31 (0) 507 600 017 Tel: +1 (303) 299 9090
Dublin 2, Ireland Fax: +31 (0) 346 581 080 Fax: +1 (303) 296 8855
Tel: +353 (0)1 6741400
Fax: +353 (0)1 6770921 Zürich District of Columbia
Badenerstrasse 15, Postfach, CH-8021, 1724 18th St, NW, Unit 3
Brussels Zürich, Switzerland Washington DC 20009
Westpoint Park, ‘t Hofveld 6c, Tel.: +41 (0) 44 296 88 44 Tel: +1 (202) 294 5822
B-1702, Groot-Bijgaarden, Belgium Fax: +41 (0) 44 296 88 55
Tel: +32 (0)2 463 1430 New York
Fax: +32 (0)2 463 3277 Geneva 60 E 42nd Street, Suite 2206, New York
Rue du Prince 9 – 11, 1204 NY 10165, USA
Paris Geneva, Switzerland Tel: +1 (212) 481 1317
8 Avenue Kleber, F-75116, Tel: +41 (0) 22 319 35 55 Fax: +1 (212) 481 1319
Paris, France Fax: +41 (0) 22 319 35 50
Tel: +33 (0)1406 76600 Washington
Fax: +33 (0)1406 76619 Luxembourg 2101 Fourth Avenue, Suite 720, Seattle
67 rue Ermesinde WA 98121, USA
4 Rue de l’Abreuvoir 92415, L-1469 Luxembourg Tel: +1 (206) 956 9200
Courbevoie Cedex, France Tel: +35 (0) 226 30 651 Fax: +1 (206) 956 0474
Tel: +33 (0)1 40 67 66 00
Fax: +33 (0)1 40 67 66 19 Stockholm Georgia
WorldTradeCenter, Kungsbron 1, Box 843, 5 Concourse Parkway Suite 2250
Düsseldorf 101 36 Stockholm, Sweden Atlanta, GA 30328, USA
Graf-Adolf-Platz 15, D-40213 Tel: +46 (0) 8 796 17 00 Tel: +1 (678) 990 3640
Düsseldorf, Germany Fax: +46 (0) 8 796 17 99 Fax: +1 (678) 990 3654
Tel: +49 (0)211 17 93 92 0
Fax: +49 (0)211 17 93 92 0 Gothenburg Texas
Södra Larmgatan 20, 11757 Katy Freeway, Suite 1300
Stuttgart 411 16 Göteborg, Sweden Houston, TX, 77079
Büchsenstrasse 10, D-70173 Tel: +46 (0) 31 60 42 90 Tel: +1 (281) 854 2040
Stuttgart, Germany Fax: +46 (0) 31 60 42 99
Tel: +49 (0)711 207050 ASIA PACIFIC
Fax: +49 (0)711 207520 Malmö Vietnam
Kärleksgatan 2A, Hanoi, Unit 702, 7th Floor, HITC Building,
Frankfurt 211 45 Malmö, Sweden 239 Xuan Thuy Road, Cau Giay District,
Herriotstrasse , D-60528 Tel: +46 (0) 40 35 48 70 Hanoi, Vietnam
Frankfurt, Germany Fax: +46 (0) 40 611 29 80 Tel: +84 (0)4 834 2050
Tel: +49 (0)69 677 32 69 Fax: +84 (0)4 833 3834
Fax: +49 (0)69 677 33 19 Copenhagen
Business Center, Havnegade 39 Ho Chi Minh City, e.town, 364 Cong Hoa Street,
Munich 1058 Copenhagen K, Denmark Tan Binh District, Ho Chi Minh City, Vietnam
Leonrodstrasse 52 Tel: +45 77 99 32 60 Tel: +84 (0)8 810 6200
D-80636 München, Germany Fax: +84 (0)8 810 6201
Tel: +49 (0)89 839306 0 Warsaw
Fax: +49 (0)89 839306 49 Al. Jerozolimskie 56 C,
00-803 Warszawa, Poland
Tel: +48 22 428 47 28

www.harveynash.com | info@harveynash.com Harvey Nash CIO Survey 2010