Research
The CIO Agenda: 2024 Technology Function Key Issues
Expectations placed on information technology (IT) teams by businesses have never been higher. This challenge is not new to the technology function, but in the face of continuing economic uncertainty, IT teams are feeling increased pressure to do more with less. As experts predict a stall or slowdown for global economic growth in 2024, our findings from The Hackett Group’s 2024 Key Issues Study indicate that technology leaders have shifted their priorities for this year.
What’s changed
Like 2023, security remains the top priority. Another constant on the list is enterprise transformation to a digital operating model, evidence of the pressure on IT executives to deliver value without sacrificing efficiency. Other top priorities reflect economic uncertainty, including improving cost-efficiency and productivity, realizing value from investments in technology, and accelerating time to value from technology-enabled investments.
Technology executives, however, lack confidence in the function’s ability to meet expectations for four priorities: improving stakeholder experiences, realizing value from technology investments, aligning technology skills and talents with business needs, and maturing and industrializing the value of enterprise data. These warrant immediate assessment and prioritization of expenditures and resources because they are critical areas of focus for the organization that also impact many of the other top 10 priorities.
Security remains a long-term top priority
Training and educating system users on risky behaviors is one of the best ways technology functions can defend against phishing, ransomware and other threats. Companies should continuously evaluate the most common threats and methods used to attack organizations in their specific industry and place priority on protecting against them.
Technology needs a sustainable approach to optimizing costs
It is not surprising to see cost-efficiency and productivity rise five spots in this year’s list. With technology services often considered a cost center, it is the focus of regular scrutiny. Technology leaders must maintain ongoing financial operating discipline and ensure intelligent cost management – while also keeping the enterprise on its course for digital transformation. Like other selling, general and administrative functions, technology needs a deliberate, sustainable approach to optimizing IT costs, rather than one-off belt tightening. Chief Information Officers (CIOs) and their teams have started to explore generative artificial intelligence (Gen AI) as part of their cost-optimization approach.
It is not enough to have a seat at the table; IT must influence the conversation
Legacy systems and arcane policies can lead to poor stakeholder experiences. Improving those experiences requires recognition of underlying issues, along with clear plans to address them. A good place to start is with the business stakeholders that IT supports. Our benchmarking research shows that business leaders’ perceptions of the IT role do not match IT leaders’ aspirations to be perceived as a partner and influence technology strategies and spend. Changing perception requires significant cultural and process transformation, along with demonstrable successes for technology initiatives.
Technology investments must show real value
If an investment in technology does not address business goals and improve stakeholder experiences, businesses will backpedal on new investments. Technology organizations have a significant opportunity to increase the value of existing tools by bringing them to scale. It is hard to maximize return on investment (ROI) when applications remain in a pilot or small-scale adoption phase. There is a much bigger opportunity for CIOs and their teams, however, through partnering with other general and administrative functions. By applying IT tools to address business needs, technology organizations can bring their expertise and perspectives to help leaders across the business realize greater value from existing technology investments.
Moving to a digital operating model can facilitate greater collaboration
Digital engagement is essential for operating model transformation. Deployment rates for emerging technologies have increased year over year, but most remain in the pilot stage. Some emerging technologies show an ROI only when the technology is used at scale, so evaluations should consider use cases that can be broadly deployed. The most significant benefits to enterprises come when emerging technologies tie into existing processes and systems. Business leaders also expect continued shrinking of on-premises infrastructure in 2024, as they seek to modernize infrastructure to enable a digital operating model, with workloads shifting to private, public and hybrid cloud infrastructures.
Doing more with less through digital transformation
Most IT organizations (88%) are evaluating generative AI with a strong focus on service or help desk activities, where this technology can be integrated with chatbots and existing knowledge bases to improve customer service. Software development is an area where organizations are evaluating several use cases related to documentation, testing, coding, anomaly detection and reporting.
Creating better talent outcomes garners more investment
Aligning skills to business needs is a critical development area, but executives have low confidence in the ability of their organizations to deliver. Staffing IT remains contentious, and most IT organizations expect to continue to need more people than they have or can hire in 2024, while businesses expect them to deliver more. Keeping up with the right skills mix in IT increases the value of the department, and those ready for change are highly valued as business partners rather than simply service providers. The ideal talent profile within IT is rapidly shifting to brokered infrastructure management, iterative development, relationship-based partnering and digital IT strategy.
IT must evangelize the value of data
No corporate asset is potentially more valuable and less optimized than data. Most companies realize this, and it is incumbent on the technology function to manage data for maximum utility. To realize the value of data, technology leaders must facilitate reliable data pipelines, strong data governance, high data quality and efficient data access, while preventing unauthorized access. Data quality and quantity are also essential to the success of generative AI. Regardless of the application, the technology function must help ensure that generative AI initiatives incorporate data best practices.
Prioritizing digital transformation can drive enterprise growth
Managing costs while maintaining focus on digital transformation and future opportunities requires judicious prioritization on those technologies with the potential to drive enterprise growth and performance – but also the courage and ability to embrace innovation for competitive advantage. We looked at current adoption, growth and satisfaction levels of emerging technologies such as generative AI. Technology organizations are working with many of these, albeit in smaller-scale applications. They project robust growth for generative AI, chatbots and cognitive automation.
IT must speed up time to value
The success of digital operating models depends on speed. Streamlining cycles from ideation to deployment enables faster value capture. Top-performing technology teams are adopting processes and practices that shorten the time to value. Transforming development processes is critical, and there is an opportunity to accelerate value by reallocating resources to technologies that are largely meeting expectations today but are stalled in the pilot stages. To move beyond proofs of concept, enterprises need to thoroughly evaluate the results of a pilot, identify and communicate successes, determine what’s needed to scale the technology, and then act.
Advanced analytics can provide a competitive advantage
Robust analytics capabilities – including advanced analytics platforms, tools and talent – are essential to accelerating growth, innovation, and competitive edge. Analytics capabilities range in complexity from simple reporting to more advanced analytics through predictive analytics using machine learning and AI. Together with effective data management, a mature analytics capability is necessary for unlocking insights and improving the speed and accuracy of decisions. Deployment of data-related and emerging technologies continues to grow, but some are still largely in the pilot stage. By broadening their deployment, organizations can extract more value.
Transform your technology capabilities in 2024
Business functions depend on technology to fill capacity gaps created by the combination of increased workloads and operating budget/resource constraints. The technology organization sits squarely at the center of solving this problem, contributing to its own workload challenges. Technology teams can make meaningful progress toward achieving their broad priorities by focusing on four areas:
- Secure, rearchitect and enable data.
- Improve enterprise cost-efficiency and productivity.
- Transform digitally at scale with suitable operating models.
- Align technology skills and talent to business needs.
Download the full report to get the full recommendations and learn more about the top priorities of (CIOs) and other technology executives for 2024, including securing data, improving stakeholder experiences, aligning technology skills and talent to business needs, and improving enterprise analytics capabilities.
