Data challenges, tech debt, and talent shortages are among the issues that can derail your IT org’s work on high-value initiatives. Here’s how some CIOs are addressing them.
To Carm Taglienti, the explosion of all things AI over the past few years has been both a pro and a con to IT teams.
On the one hand, artificial intelligence has helped both technology departments and the business units to work better, faster, and cheaper.
But on the other hand, AI and generative AI in particular, as well as the speed at which intelligence barreled its way into organizations, have disrupted many IT plans, says Taglienti, chief data officer and distinguished engineer at tech firm Insight.
“It hit us all and kept us from looking at the things we were working on,” he says. “We had to drop some critical projects to all of a sudden deal with AI as it came to the forefront very quickly.”
The meteoric rise of generative AI is only one example of the incidents and issues that can hinder or outright halt an IT department’s delivery on strategic objectives.
In fact, CIOs listed numerous roadblocks to IT strategic success in the 2024 State of the CIO Study from Foundry, publisher of CIO.com. When asked which challenges most often force IT to redirect time and focus away from strategy and innovation tasks, CIOs most commonly cited staff and skills shortages, changing business conditions, and addressing security threats. Other top challenges included budgetary constraints, compliance with laws and regulations, and responding to inquiries from other leaders within the organization.
Here is a deeper dive into 10 issues that present barriers for IT in its ability to hit its strategic objectives.
1. The increasing pace of technology advances
AI is just the latest, and perhaps most prominent example of emerging technologies that have disrupted organizational roadmaps. But the ever-increasing pace of technology advances could upset well-laid plans with greater frequency in the future.
Of course, CIOs can’t ignore or delay seizing on such advances, even if doing so would enable them to hit goals they and their executive colleagues previously had established, Taglienti says. CIOs must redirect resources when technologies as revolutionary as generative AI come to market or risk falling behind or becoming obsolete — in which case, hitting other strategic goals won’t matter much.
Ryan Downing, CIO of enterprise business solutions at Principal Financial Group, saw how this challenge impacted his organization. When he and his team first embraced a multicloud environment, they would quickly adopt new features and functions, hopping between hyperscalers as they brought new offerings to market.
“They were changing the features so quickly, and we were finding ourselves jumping back and forth. It felt like a rat race to keep up,” Downing says.
Downing and team soon recognized their approach wasn’t adding strategic value, so they identified a preferred partner and created policies to better determine when moving to another cloud for features or functions made strategic sense.
2. Unaddressed issues with data
Although the work involved with AI-related initiatives slowed or stopped many IT teams from reaching other goals, AI also magnified another common roadblock many organizations face: unaddressed issues with their data.
When it came to establishing a well-run data program, Taglienti says too many organizations spent the past decade “kicking the can down the road. But AI was thrust into the corporate world, and they’re now having to deal with it.”
CIOs — and the rest of the C-suite — are finding that they can’t harness the full potential of analytics, automation, robotics, and AI if their organization’s data isn’t well managed, Taglienti explains. As these executives try to capitalize on technologies fueled by data, they’re having to stop their progress on those deployments to deal with the state of their data instead.
3. Trouble with talent
The State of the CIO Study found that staff and skills shortages was the No. 1 challenge cited by CIOs when asked what most often forces them to redirect resources away from strategic tasks, with 59% saying as much.
Foundry / CIO.com
“Talent — or the lack of it — is a huge, huge issue, and when we look at the demographics, we don’t see that changing in the future,” says Chirajeet (CJ) Sengupta, managing partner at Everest Group, a global research firm.
Sengupta acknowledges that layoffs at the tech giants in the past year or so eased the talent crunch a bit — but only for other big companies who could offer highly-competitive salaries to those laid-off workers.
And while CIOs are working to train internal candidates within IT and the business units for tough-to-fill tech jobs or are using contractors to fill in staffing gaps, Sengupta says those practices create talent challenges, too. Upskilling takes time, and contracted workers aren’t usually as close to the business as employees.
Now there’s news that the competition for tech workers may heat up even more this year.
The State of the Tech Workforce 2024 report from nonprofit CompTIA, forecasts tech employment growth of 3.1% for this year, resulting in a net gain of more than 300,000 new jobs. (Last year saw a 1.2% growth rate, which resulted in about 117,000 net new hires.)
Such dynamics mean many — if not most — CIOs have open positions in their IT departments, which in turn slows their ability to perform required tasks as quickly as they’d like.
“It’s stalled transformation, which over a period of time actually means you fail to become a future-ready enterprise,” Sengupta says.
4. Tech debt and legacy tech
Technical debt and legacy tech are both big speedbumps.
According to The State of the CIO Survey,24% of CIOs view “reinventing infrastructure/applications to meet new requirements” as a challenge holding IT back.
Meanwhile, The Global CTO Survey 2023released last November by IT consulting company STX Next found that 35% of responding tech leaders listed technical debt/refactoring as their biggest challenge — making it the No. 1 challenge listed.
As IT leaders know, both tech debt and legacy tech hinder transformation by limiting an IT org’s ability to bring newer technologies into the environment. Their maintenance adds costs to IT operations, thus siphoning away dollars that otherwise could go to innovation. That maintenance also takes staff time away from more strategic endeavors.
At the same time, addressing technical debt and legacy debt can be an expensive and risky endeavor.
“That puts CIOs in a double bind, because they’re damned if they do and damned if they don’t,” Sengupta says.
Principal Financial’s Downing can attest to challenges here, saying that dealing with tech debt, legacy debt, and the tangled nature of it means “when we start work in one area, it’s likely we’re causing impacts in other areas” that then also need to be addressed.
“It slowed the pace of our ability to advance on our objectives,” he adds.
Downing developed strategies to deal with this challenge so that it does not impede progress. For example, he and his team created a purpose-built hub that integrates and synthesizes data in a way that customer experience channels can consume it. This allows them to quickly deliver the CX features crucial for the firm’s objective of a unified customer experience while limiting the risks and resources required to completely replace the back-end legacy systems holding the needed data.
Everest Group’s Sengupta says other organizations are successfully dealing with the challenge in a similar manner, updating both technical debt and legacy systems on a piecemeal basis.
“They’re building a business case as they modernize, using savings from one piece to fund the next,” he says. “And they’re thinking about how to ‘hollow the core.’ So rather than transform the entire system, they find ways to connect it or connect to the data locked in the legacy systems so they can deliver value without having to make risky decisions.”
5. Cybersecurity
Another significant challenge: Addressing security threats, which was cited by 43% of CIOs responding to the State of the CIO survey.
No one questions the need for IT departments to do their part to secure the organization and address security threats as they rise, experts say. But the constant identification of new vulnerabilities and the rapid emergence of new threats sometimes have CIOs, CISOs, and their teams having to drop everything to respond.
Downing points to the November 2021 discovery of the Log4j vulnerability, which had many teams working long days and over weekends to respond.
Experts say automating vulnerability and patch management and other elements of security can help limit those drop-everything-and-respond moments, but it doesn’t eliminate this perennial challenge.
6. New and evolving regulations
On a related note, 35% of the CIOs who responded to the State of the CIO survey also listed compliance with laws and regulations as an issue that draws their time and focus away from more strategic work.
As is the case with cybersecurity, experts say CIOs don’t discount the need for or importance of regulatory compliance. Rather, CIOs report that they often must quickly react as a new rule comes online or an existing one evolves.
7. The wrong mix of run, grow, transform
Many CIOs use the run, grow, transform (RGT) model to manage their IT departments, seeking to allocate the right resources to each of the three categories. But getting those allocations right is a challenge, says Scott Saccal, CIO of Cambrex, a contract drug manufacturing organization.
“It’s not a new challenge, but it’s becoming more urgent to have that balanced portfolio of investments as we get past the hype cycle for some new technologies like AI,” he says, “because if you have too much in run and grow and not enough for transformation, it leads to potential displacement in the marketplace.”
But Saccal points out that too little in run or grow also could stymie how well IT can deliver on its objectives. As such, Saccal is always looking to allocate the appropriate resources to each category to ensure success but admits it’s tough. He adds: “It’s about continuing to involve stakeholders at all levels of the organization to get the right mix.”
8. Demands for shiny objects
CIOs are often warned against being distracted by shiny objects for fear it will distract them from technologies that actually deliver value to their organizations.
Other executives haven’t gotten the memo, says Mikhail Papovsky, CEO and founder of Massaro Consulting. Consequently, CIO executive colleagues often badger CIOs to test whatever might be labeled the latest-and-greatest at any given moment, convinced that those hyped-up technologies will be a silver bullet for their business challenges.
“CIOs feel bombarded by all these requests thrown at them,” Papovsky adds. “The CIO has a set list of priorities, and now they have an executive asking for an analysis or a tiger team to take a few weeks to explore something. But a couple of weeks of the CIO’s superstars [diverted to these requests] throws the CIO’s ability to deliver on priorities into question.”
Indeed, 24% of IT leaders told Foundry/CIO.com that “responding to inquiries from senior management and/or directors” was a challenge to their strategic success.
To keep on track and avoid such distractions, Papovsky advises CIOs to insist on the business case for such requests to determine whether chasing any shiny objects truly warrants a recalibration of existing priorities.
9. Shadow IT
Similarly, the willingness of other executives to make their own technology purchases can create obstacles for IT, says Mike Shaklik, a partner and global head of CIO advisory at Infosys Consulting. That typically forces CIOs and their teams to shift away from their planned work to implementing, integrating, configuring, securing, and managing systems that don’t fit with the IT roadmap nor the organization’s strategic vision.
Shaklik says the CIOs who avoid such issues are those who have become full partners to their executive colleagues, have entwined IT into the business strategic plans, and consistently deliver the IT initiatives with the expected business value as promised.
10. The lack of enough agility, adaptability
The 2024 State of the CIO Survey found that 42% of CIOs say responding to changing business conditions is another obstacle to their strategic success.
But some CIO advisors and IT leaders say the issue isn’t so much changing business conditions — business conditions constantly change — but instead the inability of the IT organization to respond and pivot as quickly as required.
Taglienti says CIOs need to build IT departments that embrace change and can quickly pivot as circumstances, technologies, and organization needs evolve.
“Change is happening more rapidly than we’ve been used to. So having the ability to be innovative, transformative, and to understand how to address sudden changes [in the landscape] is really important for CIOs,” Taglienti adds.
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