CIOs are hindered by massive tech skills shortage

More CIOs report directly to the CEO (34 percent) than at any time in the past decade, rising 10 percent over last year, according to the 2016 Harvey Nash/KPMG CIO Survey. CIOs with a direct report to the CEO are also the happiest (87 percent report job fulfillment).

The findings highlight how CIO priorities continue to shift, revealing the CEO now focuses on IT projects that make money (almost two thirds, 63 percent), compared to save money (37 percent). In fact, some of the traditional top CIO priorities have seen the biggest drop in importance over the last four years. Increasing operational efficiencies has dropped 16 percent, and delivering stable IT performance has dropped 27 percent.

However, the survey showed that despite being more creative and increasing their influence, CIOs say they still are being hindered by the greatest technology skills shortage since the Great Recession almost a decade ago. Almost two-thirds (65 percent) of CIOs say they believe a lack of talent will prevent their organization from keeping up with the pace of change, a 10 percent increase in just 12 months. Data analytics is the most in-demand skill for the second year running, at 39 percent.

The biggest jump in skill demand year-over-year is digital, up 21 percent, and security, up 17 percent. Companies most crave the newer digital and IT strategy skills, according to the survey.

In its 18th year, the Harvey Nash/KPMG CIO Survey is the largest IT leadership survey in the world, and more than any other time, the survey results reveal an undeniable increase in the influence of the CIO. There is even more significant change happening with CIOs in smaller businesses, as they are more than five times as likely to spend the majority of their time working on external-facing projects such as developing stakeholder relationships and growth strategies, instead of traditional IT functions like systems and infrastructure.

Women in IT leadership roles rises by a third

• Women in senior IT leadership roles has risen by a third – up from 6 to 9 percent in the last year
• Sixteen percent of the U.S. survey respondents were female, compared to eleven percent of the global respondents. The global figure is up from 8 percent last year and is the first time in the survey’s history women made up more than one in ten participants
• A third of CIOs report that they now have a formal diversity initiative in place.

Digital: Less evidence of a turf war over who owns it

• One in five companies now employs a Chief Digital Officer, almost tripling the number since 2014
• CDOs are twice as likely to report to the CEO (46 percent) than to the CIO (21 percent)
• The CEO is most likely to “own” digital, at 21 percent
• IT (16 percent) is almost twice as likely to “own” digital as their marketing peers (9 percent).

A third of global CIOs responded to cyber attacks in the last two years

• Almost a third (28 percent) of CIOs have had to respond to a major IT security or cyber attack on behalf of their organization in the last two years
• Almost half of CIOs (49 percent) report data loss and privacy risks as the biggest challenge with adopting cloud technology
• Only a fifth (22 percent) of CIOs feel confident their organization is very well prepared to identify and respond to cyber attacks compared to nearly a third in 2014.

Outsourcing and contingent labor – for skills and flexibility, not to save money

• This year’s survey supports the fundamental change in the reason for outsourcing: companies are primarily outsourcing for skills and flexibility, not to save money
• Half of CIOs (50 percent) will increase investment in outsourcing this year, up by four percent from 2015
• In the last five years organizations where the majority of their IT workforce is contingent has grown by 33 percent (9 percent to 12 percent)
• One in ten CIOs (10 percent) at small organizations will rely on contingent staff for more than three quarters of their team, which is five times higher than the rate CIOs at large organizations.