21 March, 2014 by

Highlights from the 2014 CEB Summit for IT Executives in Sydney

Last week we hosted more than 100 senior IT executives from Australia’s largest organizations

summitAt the 2014 CEB Summit for IT Executives in Sydney we presented our work on the Future of Corporate IT and looked at new opportunities for IT to increase productivity.

Business leaders have set an aggressive 20% target for employee productivity improvements over the next five years, and we discussed the five steps IT should take to help employees hit that target. There was lively discussion about what it meant for IT.

In particular, two implications for IT generated the most (heated) debate:

  1. Shaping a new IT workforce: IT leaders believe they will need new engagement roles and new people to fill those roles. When we polled the summit participants, they selected talent as the single most difficult obstacle. “We can’t build the required competencies quickly enough,” one of the attendees observed.

    Interestingly, everyone agreed that these are not typical IT skills or technical competencies. Another attendee replied they were now talking about “personal resilience and engagement with the business.” She continued that, “technology skills will take care of themselves, so it’s the entrepreneurial mindset that matters.”

    CEB research shows that employee productivity has come to revolve around network performance: the degree to which you can use your network to get your job done, and the degree to which the network, in turn, can fall back on you.

    IT employees will need to be network performers too. In this context, some of the most critical IT competencies are influence and teamwork, communication, organizational awareness, and relationship management.

    In other words, helping employees hit their productivity targets will require competencies that are clearly not the typical skills or competencies associated with IT staff.

  2. Rethinking IT planning and budgeting: Another area that will require significant change is IT capital allocation. Organizations must invest in new capabilities to support better productivity and growth (e.g., collaboration and analytics capabilities).

    While almost all CIOs plan to move spending toward capabilities needed for the new work environment, only 10% have realized this objective. CEB research shows that the largest share of the IT budget (66%) still goes to foundational (or non-discretionary) investments. This is not surprising: projects that drive employee productivity are notoriously difficult to evaluate in terms of ROI. Think how hard it is to put together a business case for collaboration tools.

    We discussed how companies should set investment targets for the capabilities they care about most, and then reconstruct their capital allocation processes to disproportionately invest in technologies that enable these capabilities.

    For example, one company we work with changed its IT investment processes so that instead of distributing all pennies evenly, they set investment targets that cascade from senior executives’ management objectives. This helps them direct disproportionate investment toward the strategic priorities that are most critical to the organization.

    Several attendees at the IT Summit this week have already adopted this approach, and explained how it enables them “to spot misalignments” and evaluate proposals against the most critical outcomes their business partners try to achieve, not the ROI of those projects.

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