What’s next.

Key European IT Management Trends

for 2015 Results of an international study:

Issues, Investments, Concerns, and Practices of Organizations and their IT Executives

dr.lec. Barry Derksen MMC CISA CGEIT, Stedin, Business & IT Trends Institute, VU, NOVI

Jerry Luftman Ph.D., Global Institute for IT Management

Table of Contents _

Executive Summary ...................................................................... 3

Top IT Management Concerns .................................................. 4

Largest investments and most important technologies ....... 10

IT Practices (Organization, Budgets, Staffing) ......................... 18

CIO reporting relationships, time allocation, background,

tenure and performance measurement .......................... 30

Future of IT ..................................................................................... 38

Summary and Conclusions ......................................................... 41

2

This is the fourth annual European research on IT trends for CIONET. It is based on the authors’ research underway since 1980. This report presents the major findings from the 35th Anniversary IT Trends Survey based on responses from 2,552 organizations worldwide; 801 organiza-tions within Europe rep-resenting 24 European countries.

It is clear that organizations in Europe

and around the globe are continuing to

invest in IT to improve operations, re-

duce costs, and enable/drive strategies.

SMAC (Social, Mobile, Analytics, and

Cloud) technologies are clearly trans-

forming the industry. IT budgets, hiring,

and salaries are modestly increasing,

and IT executives are cautiously opti-

mistic that this trend will continue into

next year. While the global results are

available in multiple other publications,

the scope of this report is Europe in

comparison to the rest of the world.

The important topics elaborated in this

report include:

- IT spending patterns, including

sourcing, and the use of cloud and

shared services.

- IT workforce trends, including

retirement forecasts and specifics

about the performance analyt-

ics used for in-house and out-

sourced IT, as well as to evaluate IT

executives.

- To whom CIOs report, what they

do with their time, with whom they

spend it, what they do with them,

and what they think about the role

of IT in strategy and innovation.

- Skills requirements for the success

of new IT hires, mid-level IT profes-

sionals, and CIOs.

- The personal views of senior IT

leaders about their most important

and worrisome IT management is-

sues and technologies.

Overall, IT is becoming more strate-

gic and business focused. It appears

that organizations are becoming more

digitized with their focus shifting away

from tactical and organizational IT is-

sues like efficiency, service delivery, and

cost reduction to more strategic and

organizational priorities like business

agility, innovation, the velocity change in

the organization, IT time to market, and

the value of IT to the business. Some

suggest that IT is the business. Time will

tell if this is a widespread trend, but it is

here now among global and European

organizations, and it is confirmed by

a corresponding shift in how CIOs are

spending their time.

3

Executive Summary

Global GlobalEurope Europe

5 5MOST IMPORTANT IT MANAGEMENT CONCERNS

MOST INFLUENTIAL TECHNOLOGIES

3. Velocity of change in IT

4. Business Cost Reduction / Controls

5. Business Productivity

3. Business Cost Reduction / Controls

4. Business Productivity

5. Infrastructure Capability

1. Business & IT Alignment 1. Analytics / Business Intelligence

2. Business Agility 2. Application / Software development

3. Data Centre Infrastructure

4. Cloud Computing

5. Enterprise Resource Planning

2. Big Data

3. Customer Relationship Management

4. Cloud Computing

5. Bring Your Own Device

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IT and Business Alignment 1 1 2 1 3 2 1 2 1 1 1

Business Agility 2 2 3 2 2 3 13 17 7 5

IT Time to Market 3

Business Cost Reduction / Controls 4 3 1 4 1 1 7 4

Business Productivity 5 4 1 4 1 1 7 4

Security / Privacy 6 9 8 7 9 9 8 6 3 2 3

Business Continuity / Disaster Recovery

7 8 6 5 3 6

Time to Market / Velocity of Change 8 7 3 2 2 3 13 17 7 5

IT Value Proposition in the Business 9

Innovation 10

Infrastructure Capability 11 1

Revenue Generating IT Projects 12 2 9 9 6 8 17

Business Process Management 13 6 4 3 3 4 18 15 11 5 10

Globalization of IT 14 7 17 13 10 15

Change Management 15 13 11 11 11 14 6 7 3 2 3

New: IT Time to Market, IT Value Propoistion in the Business & Innovation

Note: IT Cost Reduction is out of TOP 15 (first time!), is now 23.

The participants were asked to select,

from a list of 43, up to three IT manage-

ment issues that they considered ‘most

important’ to their organization and up

to three issues that were ‘most impor-

tant or worrisome’ to them personally

or that “keep you up at night.” This is

similar to the approach used since the

research began in 1980; albeit the sec-

ond, personal question was added for

the first time last year. Capturing both

the organizational and personal per-

spectives of the respondents provides

additional insights. Some items on the

selection list were modified or deleted

(based on very low selection rates the

previous year), and additional ones

added for this year’s study.

The organization’s top 10 most impor-

tant IT management concerns, from the

perspective of the senior-most IT leader

in each of the 2,552 organizations, are

shown in Figure 1, together with the

comparative rankings from the authors

last ten years of IT trends studies.

The global top management concerns

(see Table 1) tend to evolve slowly

except for concerns such as IT cost

reduction (ranked 23rd overall in 2014)

and business cost reduction (ranked

4th in 2014) which appear to be directly

related to the state of each region’s

short-term economy. Despite the pre-

vailing global economic conunundrum,

management concerns such as IT-

business alignment appear consistently

(see Table 1) both globally and locally in

the top management concerns.

Top IT Management Concerns

Table 1.

Key management concerns

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Alignment of IT and / with the business

1 9 1 6 1 1 1 1 2 1 1 3 1 1

Business Agility 2 20 2 1 2 11 2 4 1 3 3 2 5 2

Business Cost Reduction / Controls 3 1 3 5 3 5 4 2 3 4 2 1 3 4

Business Productivity 4 29 11 2 4 15 8 9 8 8 4 8 14 3

Infrastructure Capability 5 21 6 30 6 16 3 10 5 9 6 6 15 5

IT Change Management 6 22 5 7 9 35 9 5 25 2 5 11 16 6

Globalization of IT 7 4 19 8 28 2 14 18 20 20 9 9 17 13

Velocity of Change in Business 8 12 20 3 29 36 24 19 6 21 27 4 18 14

Business Continuity 9 13 4 13 7 12 5 20 9 5 7 23 6 15

Legal Compliance - HIPPA, SarBox, SAS70, PCI, etc.

10 14 21 14 17 17 25 6 10 10 8 5 7 16

5Interestingly, Business Productivity

(ranked 5th in 2014) and Revenue

Generating Initiatives (ranked 12th in

2014) have started to appear in similar

rankings across all geographies. Indeed

the pattern is emerging where an

increasing number of management

concerns rank similarly across all ge-

ographies. We expect as enterprises are

more assimilated in the global market,

their IT management concerns will

become even more consistent across

geographies.

Within Europe the top five IT manage-

ment concerns for 2015 (24 countries,

801 organizations) are:

1. Business & IT Alignment

2. Business Agility

3. Business Cost Reduction / Controls

4. Business Productivity

5. Infrastructure Capability

European country specific information

follows below.

Five most important IT management issues and concerns

24 European countries were repre-

sented in this year’s research. 13 coun-

tries have been well represented (above

10 responding organizations, over 1%

representation). These countries were

(in order of representation): Netherlands

(39.5%), Spain (14.6%), Finland (8.1%),

Germany (6.6%), Portugal (4.7%), Austria

(4.2%), Belgium (4.2%), Italy (3.3%),

Luxembourg (3.3%), United Kingdom

(3.0%), France (2.2%), Poland (1.3%), and

Switzerland (1.2%). The authors an-

ticipate that the continued increase in

the European data will provide a more

balanced perspective for the results. The

top ten most important IT management

issues for these countries are displayed

below.

There is relative consensus within

Europe about the top three manage-

ment concerns with regards to Business

& IT alignment, Business Agility, and

Business Cost Reduction. The diver-

sity between European countries in

the ranking of the remaining top ten

increases rapidly. The range of perspec-

tives across Europe is indicative of the

different emphasis that these enter-

prises place on the important issuers of

the day.

Table 2.

Top ten management concerns Europe

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1. Alignment of IT and the business

Following the pattern of the past 30

years, alignment of IT and business has

been close to the top of the list of top

concerns since 2000 (Luftman et al.,

2013) (Derksen, 2013). Despite being

in the spotlight for such a long time, it

still remains a pervasive and persistent

goal. The data shows that it remains the

number one concern in North America,

Europe, Asia, and Africa, but slipped to

8th position in Australia, and 35th in

Latin America in 2014. Alignment of IT

and business has been considered an

important area right from the begin-

ning of the trends research. Initially, it

was ranked 8th in 1980, and remained

in the top ten until 1994. After that, it

remained in the number one position;

except in 2012, 2010, 2009, and 2007

when it slipped either to the second

or third position. It is expected by

many pundits that it will continue to

occupy the top spots in the coming

years; hence, it is not a surprise that it

has been ranked at or near the top of

the list of concerns in all geographies.

While there are some that advocate

using a different term (e.g., integrate,

fused, harmony), the important con-

cepts that are espoused are similar;

improve the business-IT relationship

to provide demonstrable business

value. Whatever term one prefers, IT

will continue to be seen as an integral

enabler and driver of efficiency and

effectiveness throughout the business,

especially with the emergence of lever-

aging IT for revenue generating initia-

tives. Both IT and business processes

are relatively mature on their own, but it

is their alignment that holds the key to

driving the businesses forward (Luftman

et al., 2013).

Alignment will remain high on the list

as IT and business evolve. It is more

important to continue efforts to im-

prove the IT-business relationship, than

debate what term to use.

2. Business agility

Business agility and speed to market

are essential for business growth in

today’s competitive economy, espe-

cially as organizations continue to

increase their use of IT for competitive

advantage. Business agility was first

introduced into the survey in 2003. It

has been ranked among the top ten IT

management concerns except 2007-

2008 when it was ranked 17th and

13th. Business Agility was ranked 7th in

2003, 5th in 2005, and 7th in 2006. It

has been ranked among the top three

global management concerns since

2009; mostly at number 2. Over the

years, it has maintained the 3rd posi-

tion in North America, 2nd in Europe,

Asia, and Africa, and 1st in Australia and

Latin America. This year, it is ranked 2nd

in North America and Europe, while

7th in Asia, and 5th in Latin America.

As organizations leverage IT to quickly

reduce business expenses and increase

revenues, Business Agility will remain

an important concern for management.

Business agility in concert with IT time

to market/velocity of change (ranked

3rd in 2014), IT value proposition to

the business (9th) is also indicative of

the future impact that IT will have (is

having) on revenues (which has fluctu-

ated between 2nd and 17th over the last

seven years).

3. Business Cost Reduction/Controls

Business Cost Reduction has been

ranked among the top four manage-

ment concerns across the globe since

2013. In the authors previous trends

surveys it was combined with business

productivity; this year they are separate,

albeit even independent they are both

among the top management consid-

erations. Business productivity was

ranked among the top four concerns

since 2007; except 7th in 2008. This

year Business Cost Reduction /Controls

is ranked, 2nd in Latin America, 3rd

in Europe, 4th in Asia, 9th in North

America. Cost reduction is considered

the foundation of long- term sustain-

able competitive advantage espe-

cially during economic stagnation, and

therefore this will continue to be highly

ranked in all geographies. Leveraging

IT to attain these cost reductions and

improvements in productivity are es-

sential to the success of organization

and the future of IT. As organizations

continue to increase their focus on lev-

eraging IT for cost reduction, improving

productivity, and revenue generating

initiatives, we anticipate seeing a con-

tinued change in IT roles, spending, and

organizational considerations; perhaps

a transformation.

7

4. Business Productivity

There is general consensus on the

importance of business productivity and

cost reduction using IT, even though IT is

still perceived within a majority of enter-

prises as an expense. While the research

demonstrates productivity slowly moving

down the list, to reflect this change in

business perspective, as previously noted

they are both included in the survey and

both are among the top management

concerns this year.

Business productivity has been ranked

in the top four management concerns

for the past decade, except 2008 when

it was ranked 7th. In 2014 it has been

ranked among the top 6 management

concerns across all geographies except

Australia (ranked 32nd). The ranking of

business productivity as a management

concern shows a very erratic behavior,

moving from 7th place in 2008 to 1st

in 2009. Business productivity is rated

among the top 4 management concerns

across all geographies. We expect that it

will continue to remain among the top

10 for the foreseeable future. Conversely,

we anticipate IT cost reduction (ranked

23rd in 2014) to drop off the list in the

coming years.

5. Security (Previously combined with Privacy)

Since 1980 security has been included

with privacy. It was rated between

2nd and 9th since 2003. From 1980

to 1990 it was ranked between 12th

and 19th position, except 1985 when it

was rated 6th. From 2003-2006, it was

either 2nd or 3rd, and then 6th to 9th

between 2007 through 2013 (Luftman

and Zadeh, 2011, Luftman et al., 2013).

This year security is ranked 6th glob-

ally; second in North America, 32nd in

Europe, 30th in Asia, 38th in Australia,

31st in Latin America and Africa. Security

(like alignment) remains as a pervasive

and persistent concern. Recent head-

lines like the NSA fall-out and the Sony

Pictures breach exemplify the need for

companies around the globe to con-

tinue investing in their security systems.

It is expected that business continuity/

disaster recovery (ranked 7th in 2014)

and security will remain in the top ten.

Security is also the 8th ranked technol-

ogy in 2014 and ranked 4th overall in

technology investments.

8 IT management Issues Most important or Worrisome to IT Leaders

For a second year, we asked respondents

to report not only on the IT management

issues important to their organization,

but also on issues that were personally

“most important or worrisome to them”;

the things that keep you up at night.

While we have only two years of data to

present in Table 3 (worldwide), the year

to year changes are significant in that

new or revised selections have moved

into the top ten.

Security and Privacy moved from sec-

ond to third place where as alignment

kept the number one place. New in the

top three is Business Agility. New in the

top ten are Business Continuity, Vendor

Management, Business cost reduction

and IT time-to-market.

Interestingly CIO Leadership role

moved from the top three to eighth

place, indicating that the CIO is be-

coming less worried about their per-

ceived responsibilities in the enterprise;

albeit leadership is a top skill required

for CIOs. From the Europe countries

perspective Vendor management

interesting. Within Europe vendor

management is ranked 2nd; a rank-

ing which is not to be found in other

geographies. Belgium, France, Italy, and

Portugal ranked vendor management

first. In Table 4 the European top 10 is

presented.t

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3 Most Important / Worrisome to YOU

This question was asked

for the first time in 2013.

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1 1 Alignment of IT and / with the business

1

2 5 Business Agility 2

3 2 Security / Privacy 6

4 4 IT Talent / Skill Shortage 26

5 13 Business Continuity 7

6 8 Business Productivity 5

7 31 Vendor Management 38

8 3 CIO Leadership Role 19

9 18 Business Cost Reduction 4

10 17 IT Time-to-Market 3

Table 3.

Things that keep you awake at night

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Business & IT Alignment 1 20 5 1 2 5 6 1 1 1 2 1 11 1

Vendor Management 2 3 1 19 1 4 1 2 14 5 1 7 3 3

Business Continuity 3 4 6 3 5 13 13 3 2 14 3 2 12 6

Business Productivity 4 1 7 13 6 6 2 4 10 15 4 3 13 7

Business Cost Reduction / Controls 5 8 8 4 7 1 14 16 16 16 5 5 14 8

Business Agility 6 12 9 7 8 14 7 17 4 9 6 39 4 19

CIO Leadership Role 7 21 10 2 9 16 15 18 15 10 7 6 15 10

IT Agility 8 13 11 5 10 17 16 5 5 11 8 8 5 11

Globalization of IT 9 9 12 6 11 2 3 6 21 12 9 12 6 9

Innovation 10 22 13 16 12 15 17 19 6 13 10 9 16 4

There are significant differences within

Europe when considering the top ten.

Both Austria and Switzerland ranked

alignment outside the top ten. Vendor

management seems to be important

across Europe, but both Finland and

the Netherlands ranked it 19th and

14th whereas the other European

countries placed it within the top

ten. Vendor management is ranked

higher than other continents. A pos-

sible explanation might be the Cloud

trend in which many Cloud suppliers

are from North America (e.g. Salesforce,

Amazon, Apple, Microsoft) and in which

European countries concentrate more

on the legal implications, also support-

ed by the European Union.

Moreover, these changes in the top 10

of things that keep you awake at night

also point to a shift in priorities and fo-

cus among senior business and IT lead-

ers, away from tactical and operational

IT issues like disaster recovery, service

delivery, and change management

to more strategic and organizational

priorities like the IT value proposition, IT

strategic planning, faster delivery, and

coping with changing conditions.

Table 4.

Management concern – awake at night2014-2015

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Participants were asked to select, from

a list of 53 technologies, up to three of

their ‘organization’s largest/most signifi-

cant current or near-future IT invest-

ments’; up to three that they consider

most important’ to their organization,

and up to three that cause ‘the greatest

concern’. Some items on the selection

list from last year were deleted (based

on very low selection rates the previous

years) or modified, and additional ones

added to this year’s study.

Table 5 lists the top 22 technologies

identified as the largest investment for

the 2,552 participating organizations

worldwide, along with their rankings

since 2007. The rankings have shifted

when compared to 2013, yet all, but one

entry in this year’s top 15 were also top

15 entries last year. Specifically, a new

item, ‘Data Center Infrastructure’, which

ranks third, and ‘Legacy Applications,’

tied at 17th. Next to ‘Data Center’ a new

entry to the top ten is Security/Cyber se-

curity (ranked 8th). Customer/Corporate

Portals and Network/Communications

fell out of last year’s top 10.

Generally speaking, and consistent with

last year, a relatively small percentage

of the 2,552 respondents selected any

one technology. This indicates that IT

investments are well diversified across a

broad number of options. Only the top

six were selected by more than 10% of

the respondents. This is not particularly

different than the IT management issues

shown in Table 1, of which also the top

six were selected by more than 10% of

the participating organizations.

1 Blank cells indicate that the technology was not asked about in that year of Study.

Largest investments and most important technologies

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Analytics / Business intelligence 1 1 1 1 1 1 2 2

Application/Software Development (previously Apps

developments)

2 5 4

Data Center / Infrastructure 3 new

Cloud Computing (SaaS. PaaS. IaaS) 4 2 2 3 5 17

Enterprise resource planning (ERP) 5 4 3 2 3 3 14 6

Customer relationship management (CRM) 6 3 5 5 9 13

Big Data 7 7 18

Security / Cybersecurity 8 16 15 28 7 11 8

Workflow tools 9 9 7 8 7 7

Integration (previously EAI/EAM) 10 11 16 9 18 5 12 32

Networks / communications 11 10 8 11 9 10 11

Disaster Recovery 12 11 13 14 4 6 3 4

Collaboration Tools 13 12 4 8 7 7

Customer/Corporate Portals 14 8 9

Virtualization 16 15 17 7 12 7 2

Legacy Applications 17 16

Employee Portals 18 20 34 20 14 22

Outsourcing IT 19

Innovation / Disruptive Technologies 20

Continuity Planning 21 13 11 14 4 6 3 4

Consumer Oriented Devices 22 36

Table 5.

IT Trends, 2007-2014 1

11

European Organization’s IT Trends – Investments

The Europe differences in the most

important IT Trends/investments can

be found in Table 6. There is, like

around the globe, consensus looking

at Analytics/Business Intelligence (A/BI)

being ranked first. Only Austria (7th) and

Finland (4th) rank A/BI outside the top

three. In the other IT Trends in the top

twenty there are significant differences

in the selected top IT Trends depending

on the country perspective.

Big Data, ranked 2nd, is a top three IT

trend in Austria, the Netherlands, Spain,

and UK; whereas it is ranked outside

the top ten in Italy and Luxembourg.

Ranked 3rd is CRM and is within the

top five in Austria, France, Italy, and

Luxembourg; but outside the top ten for

the Netherlands, Poland, Switzerland,

and the UK.

Cloud Computing is a top five trend

within Germany, Italy, Netherlands,

Poland, Spain, and the UK, but is out-

side the top ten in Austria, Belgium,

Luxembourg, and Switzerland.

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Analytics / Business Intelligence 1 7 1 4 1 1 1 1 1 2 1 1 1 1

Big Data 2 1 10 8 5 5 17 14 2 3 4 2 10 2

Customer Relationship Management 3 5 6 5 6 6 2 3 10 23 5 4 11 22

Cloud Computing 4 14 11 9 7 4 3 15 4 4 6 3 12 3

Shared Services 5 15 2 1 8 32 4 16 11 24 7 5 13 23

BYOD (Bring Your Own Device) 6 8 12 2 9 3 5 17 38 25 8 11 14 5

Enterprise Architecture 7 2 13 23 10 2 6 18 22 5 9 32 2 24

Workflow Tools 8 16 14 12 11 12 18 5 23 1 2 16 15 4

Employee Portals 9 31 15 18 12 13 7 4 8 26 10 6 16 25

Master Data Management 10 32 16 11 13 14 8 6 12 27 11 17 17 6

Web Services 11 3 4 34 2 15 19 19 24 28 12 12 18 7

Voice Over IP (VOIP) 12 17 5 35 14 16 20 2 5 7 13 33 19 8

Customer/Corporate Portals 13 9 17 14 15 19 9 7 9 29 14 18 3 26

Application / Software Development 14 33 18 12 16 33 21 20 3 30 15 21 4 27

Continuity Planning 15 18 19 15 17 7 22 21 25 8 16 7 20 28

Unified Communication 16 34 7 13 18 20 10 22 26 31 3 22 21 9

Enterprise Resource Planning 17 35 20 3 19 34 11 23 19 9 17 42 5 29

Collaboration Tools 18 36 21 10 20 35 23 24 6 10 18 34 22 10

Security / Cybersecurity 19 10 22 24 21 21 24 25 7 11 19 35 23 11

Innovation / Disruptive Technologies 20 37 23 25 3 22 25 26 13 12 20 13 24 12

Table 6.

Top 20 IT Trends Europe

12 1. Analytics/Business Intelligence

Analytics/Business Intelligence (A/BI)

remains in first place as the largest IT

investment, a ranking it has held for

six years straight. It has ranked in the

top three since 2003, when it was first

added to the list. A/BI was selected by

801 organizations

Comprehensive Report: 2015 IT Trends

Study

A big ‘THANKS’ to all CIONET members

who completed the IT Trends Study

Questionnaire! 12

(31.4%), as one of their three largest

or most significant IT investments.

However, the percentage of organiza-

tions selecting this is down from 42%

last year. It is worth mentioning that

potential synergies exist between A/BI

systems and the data made available

via investments in 5th-ranked ERP, 6th

-ranked CRM, and 7th-ranked Big Data,

as well as many of the other technolo-

gies listed in Table 5.

2. Application and Software Development

Selected by 330, or 12.9% of the re-

spondents, Application and Software

Development is ranked 2nd this year.

Interestingly, software development has

been moving up in the rankings since its

introduction in 2012. This high ranking

may come as a surprise in the world of

off-the-shelf software, Software-as-a-

Service (SaaS), and Cloud Computing;

and yet, custom software development

is still a critical undertaking in many

organizations. SaaS and Cloud should

not imply no application/software

development. Nearly 35% of the re-

sponding organizations are in industries

where developing and/or using custom

software is common. From an indus-

try perspective it shows that 13.84%

of the 2,552 responding organizations

are in financial services; IT hardware,

software, and services (8.28%); govern-

ment (7.89%); and medical technology,

telecommunications, and electronics

(6.14% combined).

3. Data Center Infrastructure

Data Center Infrastructure was added

to the list of options this year and was

in 3rd place, selected by 327 or 12.8%

of responding organizations as one of

their three largest technology invest-

ments. These large investments in

infrastructure are surprising in light of

the significant growth of publically trad-

ed cloud providers and the many who

reported moves to “the Cloud” appear-

ing in the business and IT press, where

capital investments can be leveraged

into other current expenses. Increasing

use of the Cloud is confirmed by this

year’s IT Trends Study’s IT budget and

the cloud utilization data, as reported

below. Nevertheless, nearly 20% of the

respondents reported making large in-

vestments in Data Center Infrastructure.

It is noteworthy; however, that this

year’s study finds that nearly half of

cloud-base IT services are delivered

via in-house private clouds, and that

only five responses separated the

second- and fourth-ranked technology

investments.

Five largest IT Trends investments

134. Cloud Computing

Cloud Computing was selected by 311

organizations (12.2%) as one of their

three largest IT investments. As indi-

cated in Table 5, the first appearance of

Cloud Computing was in 2009, when

both “Cloud Computing” and “Software-

as-a-Service (SaaS, PaaS)” appeared sep-

arately. These listings continued in 2010

and 2011; but in 2012, Cloud Computing

was redefined to include SaaS, PaaS

(Platform-as-a-Service), and IaaS

(Infrastructure-as-a- Service). Despite

this single, expanded definition, Cloud

Computing dropped to fourth place this

year as the largest or most significant

investment, down from second place in

2013 and 2012 and third in 2013. That

does not necessarily mean, however,

that fewer IT budget dollars are going

to Cloud Computing, or that fewer IT

services or solutions are being delivered

that way; and in fact, it appears quite the

opposite is occurring (as discussed the

“Participating Organizations and Their IT

Practices” section below).

5. Enterprise Resource Planning (ERP)

Investments in ERP systems have been

ranked among the top five position since

2009. This year it was selected as one

of the three largest investments by 288

(11.3%) of the respondents. Like data

centers, ERPs tend to be large invest-

ments. However, unlike data centers,

ERP systems are designed to provide a

vehicle for reducing business expenses

and optimizing business processes, both

important management objectives. Also,

ERP systems, by virtue of the compre-

hensive and integrated data that they

provide about internal operations, as

well about supply chains and custom-

ers, they enable second- and third-order

benefits when used in combination with

technologies such as A/BI. Thus it is not

surprising to see that ERPs continue to

be large, significant investments for many

organizations.

14

Last year, for the first time, respondents were asked to report on both their organiza-

tion’s largest IT investments as well as those “of greatest concern” personally to the

senior IT leaders themselves. This proved quite revealing2, and so it was repeated

again in this year’s study. Additionally, this year respondents were also asked to

select up to three technologies that are “most important” to their organizations. By

separately assessing organizations’ largest technology investments, those of great-

est importance, and those of greatest concern to IT leaders, additional detail and

granularity are added to the research. This also provided some interesting insights as

detailed below.

2 Kappelman, L. A., McLean. E. R., Luftman, J., Johnson, V. (2013) Key Issues of IT Organizations and Their Leadership: The 2013 SIM IT Trends Study, MIS Quarterly Executive, 12(4), 227-240.

Most significant IT investment

Most important

IT Trend to the organization

Analytics / Business Intelligence 1 1

Big Data 2 7

Customer Relationship Management 3 2

Cloud Computing 4 5

Shared Services 5 8

BYOD (Bring Your Own Device) 6 3

Enterprise Architecture 7 9

Workflow Tools 8 48

Employee Portals 9 13

Master Data Management 10 16

Web Services 11 44

Voice Over IP (VOIP) 12 54

Customer/Corporate Portals 13 6

Application / Software Development 14 18

Continuity Planning 15 11

Comparing organizations’ largest IT investments to their most important ones

The technologies identified by the

respondents as being most important

to their organizations map fairly well to

those technologies where the organiza-

tion is making the largest investments.

As indicated in Table 7, seven of the top

ten are present on both of the lists, but

with different rankings. Also, asset man-

agement (at 4th), Customer/Corporate

Portals (at 6th) and Service Management

(at 10th) only appears on the most

important list. In the most significant

IT investments workflow tools (8th),

employee portals (9th) and Master Data

Management (10th) are in the top ten.

Table 7.

Comparing organizations’ largest IT investments to its most important (2014 – Europe)

15

The most worrisome technologies for senior IT leaders in Europe

This year’s top six technologies that are

most personally worrisome to senior

IT leaders (“things that keep you up

at night”) were selected by more than

11% of the respondents, with numbers

7 thru 19 by between 5% and 10%. The

top 10 most worrisome technologies

remained fairly consistent when com-

pared to last year. However, there are

some differences. In particular, BYOD

(18th this year), Enterprise Architecture

(15th), and CRM (13th) all dropped

out of the top 10 to be replaced by

Application Development (fifth, up from

15th last year) and the two new items,

“Data Center Infrastructure”(tenth) and

“Innovative/Disruptive Technologies”

(tied for seventh). Security moved up

from second to first, being selected

by 224 or 31.2% of the respondents,

while second-ranked Analytics and

Business Intelligence was selected

by 160 respondents (22.3%). Disaster

Recovery ranks third this year as the

most worrisome technology, selected

by 106 (14.8%). Integration is fourth with

14.5%; and rounding out the top five

is Software Development, selected by

13.1%. The only other item selected by

at least 10% of the respondents is Cloud

Computing, at sixth with 11.6%.

Looking over this year’s rankings of the

things that keep senior IT leaders up at

night, they seem about evenly divided

between “keeping the IT lights on” (i.e.,

security, disaster recovery, legacy, and

infrastructure) and “increasing business

capabilities” (i.e., analytics, integration,

software development, innovation, and

ERP). Cloud could be in both categories,

and disruptive technologies could be

seen as in a strategic IT-value proposi-

tion category of its own.

Eu

rop

e

Au

stri

a

Be

lgiu

m

Fin

lan

d

Fran

ce

Ge

rman

y

Ital

y

Luxe

mb

ou

rg

Ne

the

rlan

ds

Po

lan

d

Po

rtu

gal

Spai

n

Swit

zerl

and

U.K

.

Security / Cybersecurity 1 18 1 1 1 14 1 1 5 14 1 1 7 3

Asset Management 2 1 2 6 7 4 12 13 3 3 2 6 8 9

Smart Gadgets (e.g., smart watches/

gadgets)

3 11 3 2 8 15 4 14 21 15 3 3 9 10

Service Management 4 12 7 4 9 25 13 15 6 16 4 2 10 11

Analytics / Business Intelligence 5 19 8 15 10 16 5 2 15 1 5 4 11 4

BYOD (Bring Your Own Device) 6 10 9 5 11 8 14 3 16 6 6 7 1 12

Business Process Management Systs 7 2 10 21 2 1 6 16 22 17 7 8 2 13

Social Networking / Media 8 13 11 3 12 26 15 17 23 18 8 5 12 14

Customer/Corporate Portals 9 14 12 12 13 3 16 18 17 7 9 18 3 2

Cloud Computing 10 15 13 13 3 17 17 19 1 19 10 11 4 5

Continuity Planning 11 3 14 16 4 5 18 4 7 20 11 12 13 15

Enterprise Application Management 12 4 15 25 5 2 2 20 24 21 12 29 14 16

Big Data 13 20 16 22 6 18 19 5 8 4 13 13 5 17

Enterprise Resource Planning 14 21 4 7 14 19 20 21 18 22 14 14 15 6

Innovation / Disruptive Technologies 15 5 17 26 15 9 21 6 9 23 15 9 16 18

Table 8.

IT Trend most worrisome for senior IT leaders - Europe (2014 - 2015)

16 Comparing IT Leadership’s most worrisome technologies to the largest technology investments

As was the case last year, the technolo-

gies that keep senior IT leaders up at

night are different than the largest IT

investments in their organizations3.

Nevertheless, as indicated in Table 9, the

differences in some ways outweigh the

similarities. This is more than last year.

However, there are still some interest-

ing similarities, with Cloud Computing,

BYOD and Analytics/Business

Intelligence in all three perspectives

in the top ten. These three IT Trends

are important to the organization, gain

significant IT investments and keep the

CIO awake at night.

Some of the other differences include

technologies that may not require a

very large investment but are critical

for keeping the IT lights on, and thus

are fundamental for the credibility,

reputation, and job security of senior IT

leaders. Security is an example of this,

as it ranks as the number one personal

concern with 33.1% selecting it. Other

examples are Smart Gadgets, Social

networking and Service Management.

Mo

st s

ign

ific

ant

IT

inve

stm

en

t

Org

. im

po

rtan

t IT

Th

ing

s th

at k

ee

p

you

up

at

nig

ht

Security / Cybersecurity 19 22 1

Asset Management 21 4 2

Smart Gadgets (e.g., smart watches/

gadgets)

40 15 3

Service Management 48 10 4

Analytics / Business Intelligence 1 1 5

BYOD (Bring Your Own Device) 6 3 6

Business Process Management Systs 23 19 7

Social Networking / Media 26 24 8

Customer/Corporate Portals 13 6 9

Cloud Computing 4 5 10

3 Derksen, Luftman. CIONET report 2014

Table 9.

Comparing Europe’s most significant IT investment, organization important it and keeping the CIO awake at night

17

“Security issues, asset management and smart gadgets are what keep the CIO awake most at night”

18

IT Practices (Organization, Budgets, Staffing)

The average IT spending as a percent

of revenue in European organizations is

4.8%, which is less than the other global

geographies. The comparison is shown

in Figure 1. Although more depending

on industry than country the countries

(9.27%) Netherlands (7.11%), Luxembourg

(9.06%) and Spain (6.92%) have above

average IT spending.

Finland (4.34%), Germany (1.94%) and

Portugal (3.89%) are below the average.

These differences are the result of the

kind of industries involved within the

countries.

Comparing Europe to the other geog-

raphies (Figure 1) it can be seen that

Europe is more oriented on IT cost

reduction than the other geographies.

Which is similar to the economic state

of Europe in the research period.

Europe is the only geography which is

focusing as much on reduces IT spend-

ing. We do expect to see a turning point

in the near future. Compared to the

other geographies Europe is in ‘catch

up’ regarding IT investments making up

for the lean ‘Great Recession’ years of

2008-2012, when both revenue and IT

investment contracted in most organiza-

tions. The increase in many of the other

geographies (Figure 1) is also being

affected by new investments in cloud,

shared services, digital marketing and

analytics as well as the increasing digiti-

zation of organizations in general.

Global

0%

2%

4%

6%

8%

10%

2010 2011 2012 2013 2014

Africa Asia Europe North America Latin America Australia

Figure 1.

Percentage of revenue allocated to IT budget (2015)

470 810 580 560 550 920 580 560 940 330 640 610 540 480 390 360 490 500 530 580 1000 630 550 590 560 520 550

4,7

%

8

,1 %

5,8

%

5

,6 %

5,5

%

9,2

7 %

5,8

%

5

,6 %

9

,38

%

3,3

%

6,4

%

6,1

%

5,

4 %

4

,8 %

3

,9 %

3,6

%

4,9

%

5,0

% %

5,3

%

5,8

%

10

,9 %

6

,3 %

5,5

%

5,9

%

5,6

%

5,2

%

5

,5 %

Centralized

Decentralized

Federated / Hybrid

Matrixed

Networked

19IT organization structure

Within the surveyed European coun-

tries the most popular organization

structure (Figure 2) identified by 48%

of the respondents is decentralized,

followed by centralized with 34%,

and federated with 14%. Globally the

centralized IT organizational structure

is the most popular (69%), followed

by federated (14%), and decentralized

(12%). A possible explanation for this

difference is likely the European de-

centralized usage of new technologies.

Quite often business units do tend to

invest in IT that they require within their

own function. This might also explain

the lower IT spending (hidden IT costs)

as discussed in the previous section.

0 10 20

30

40

50

60

70 80

90

100

290+570+140=400+200+400=530+130+200+70+70=200+600+200=90+820+90=80+670+170+80=500+330+170=130+800+70=500+170+330=140+710+140=610+40+300+40=130+800+70=630+130+250=

29% 57% 14%

40% 20% 40%

53% 13% 20% 7% 7%

20% 60% 20%

9% 82% 9%

8% 67% 17% 8%

50% 33% 17%

13% 80% 7%

50% 17% 33%

14% 71% 14%

61% 4% 30% 4%

13% 80% 7%

63% 13% 25%

U.K.

Switzerland

Spain

Norway

Portugal

Netherlands

Luxembourg

Italy

Germany

France

Finland

Belgium

Austria

Figure 2.

IT Organization Structure – Europe

0%

Figure 3.

Global organization structure 2006-2014

20

The IT organizational structure tends to

change over years globally, as can be

seen in Figure 3. This year globally both

the centralized and decentralized IT or-

ganizational structure increased where-

as federated decreased. Often a cen-

tralized IT structure is chosen for cost

reduction reasons whereas the decen-

tralized IT structure is chosen customer

focus and flexibility. Large changes to

the IT organization structure is com-

plex, time consuming, and costly. Thus

structure change is not something most

organizations do frequently, take lightly,

or do simply because it is fashionable,

lending credence to the demonstrable

value of a federated structure which can

facilitate minor changes more readily.

Overall, Figure 3 suggests that while

IT is centralized in most organizations,

there is a slow-moving trend toward

more decentralized IT structures and

fewer centralized ones. Time will tell

whether that is in fact the case, or if

that trend has begun to reverse. On the

other hand, this distinction between

centralized and decentralized/federated

IT organization structures (as shown in

Figure 3) may be blurring, as IT govern-

ance becomes more federated and IT

delivery becomes more centralized.

That is a matter to explore in future IT

Trends Studies.

200 280 340 250 300 180 220 180 150 120 100 50 90 20 100 90 20 110 690 620 620 660 680 720 690 770 740

20

%

28

%

3

4%

2

5%

30

%

18%

22

%

18%

1

5%

12

%

10%

5

%

9%

2%

10

%

9%

2%

11%

6

9%

62

%

62

%

6

6%

6

8%

72

%

69

%

7

7%

74

%

20%

40%

80%

60%

Federated / Hybrid Decentralized Centralized

“There is a clear trend towards decentralised IT structures”

Figure 4.

Change in IT budget from previous year (2004-2015)

Increase

No change

Decrease

21

610=

180=

210=

470=

280=

250=

270=

220=

510=

340=

300=

360=

550=

270=

180=

400=

350=

260=

530=

210=

260=

560=

200=

240=

450=

300=

250=

61%

18%

21%

47%

28

%

25

%

27%

22

%

51%

34

%

30

%

36

%

55

%

27%

18%

40

%

35

%

26

%

53

%

21%

26

%

56

%

20

%

24%

45

%

30

%

25

%

IT budgets and Staffing Trends

Economic conditions have had a

significant impact on IT budgets. As

indicated in Figure 4, prior to the ‘great

recession’ (2004-2008), the major-

ity of global organizations reported

increasing IT budgets. However, as the

economy slowed in 2008 only 47% of

respondents reported an increase in

IT budgets; and in 2009 only 27% of

organizations reported increases, with

73% of the respondents indicating that

their IT budgets had remained flat or

decreased. Things tentatively improved

in 2010 with 36% reporting increases,

but 64% still indicated flat or decreasing

IT budgets from the prior year.

In 2011 the trend improved further

with 55% of the respondents report-

ing increasing IT budgets, 27% flat, and

only18% decreasing (a bit more than

half of the 2010 rate of decreases). The

percent of organizations reporting in-

creases pulled back in 2012 with nearly

40% of organizations seeing budget

increases and 20% decreases. In last

year’s IT Trends Study, 56% of the re-

spondents reported increasing budgets,

and respondents accurately forecast a

slight increase for this year.

This year the number of organizations

reporting IT budget increases is 56%, up

from 53%, but still not above the 2007

high of 61%. Organizations with budget

allocations remaining flat are a bit lower

(20%), while decreasing budgets are

down from 26% to 24%. However, when

asked to project next year’s IT spending,

the outlook is more pessimistic. Only

45% of organizations expect to have an

IT budget increase in 2015. This repre-

sents almost a 20% decline in the num-

ber of organization’s currently reporting

budgetary increases. Moreover, 30%

(50% more than this year) are project-

ing flat budgets, and 25% anticipate a

decrease in IT spending (about 4% more

than in 2014). This could be a signal of

further economic uncertainty, and likely

an anticipated overall weakening in the

global economy, or perhaps the end of

the ‘catch up’ period in IT investments

making up for the lean investment years

early in the recession.

2007 2008 2009 2010 2011 2012 2013 2014 2015

2014 > 2013

2014 = 2013

2014 < 2013

2015 > 2014

2015 = 2014

2015 < 2014

0 10 20

30

40

50

60

70 80

90

100

Europe

U.K.

Switzerland

Spain

Portugal

Netherlands

Luxembourg

Italy

Germany

France

Finland

Belgium

Austria

Figure 6.

Change in IT budget from previous year (2015 compared to 2014) in Europe

Figure 5.

Change in IT budget from previous year (2014 compared to 2013) in Europe

22

European IT budgets developments

29% of the European organizations

reported an IT budget decrease in the

2014 budget (see Figure 4). This per-

centage is highest of all continents

(North America 24%, Australia 20%,

Africa 11% and Asia 3%). Also the per-

centage of European organizations

reporting a flat IT budget in 2014 in

comparison with 2013 was highest of

all continents with 42%. The number of

European organizations reporting an

increased IT budget was lowest of all

continents with 30%.

Within Europe (Figure 5), 14% of the UK

organizations reported an increased

2014 IT budget, lowest within Europe. In

Portugal and the Netherlands just 24%

of the organizations reported an in-

creased IT budget. Austria and Germany

are at the other end of the scale with

60% and 54% of the organizations

reporting an increased IT budget. Only

7.7% of the German organizations re-

ported a decreased IT budget in 2014.

When comparing the forecasted chang-

es in IT budget with regard to 2015,

the European countries are slightly

more positive (see Figure 6). 79% of the

European organizations anticipate an

increased or flat IT budget in compari-

son to 72% in 2014. 21% of the European

organizations reported a decreased IT

budget, whereas 29% of the European

organizations reported a decreased IT

budget in 2014.

German organizations are most positive

with 60% of the organizations report-

ing an increased IT budget over 2015.

60% of the IT budgets of organizations

in Austria report a flat IT budget in 2015.

43% of the organizations in Switzerland

report an expected decreased IT budget

in 2015.

0 10 20

30

40

50

60

70 80

90

100

300+420+290=140+290+570=310+330+360=310+330+360=240+410+340=240+520+240=290+530+180=440+330+220=540+380+80=360+290+360=260+350+390=290+380+330=600+200+200=

30% 42% 29%

14% 29% 57%

31% 33% 36%

31% 33% 36%

24% 41% 34%

24% 52% 24%

29% 53% 18%

44% 33% 22%

54% 38% 8%

36% 29% 36%

26% 35% 39%

29% 38% 33%

60% 20% 20%

Europe

U.K.

Switzerland

Spain

Portugal

Netherlands

Luxembourg

Italy

Germany

France

Finland

Belgium

Austria

310+480+210=360+550+90=140+430+430=400+450+150=280+590+140=290+430+290=350+590+60=330+390+280=600+200+200=310+380+310=260+480+260=170+460+380=200+600+200=

31% 48% 21%

36% 55% 9%

14% 43% 43%

40% 45% 15%

28% 59% 14%

29% 43% 29%

35% 59% 6%

33% 39% 28%

60% 20% 20%

31% 38% 31%

26% 48% 26%

17% 46% 38%

20% 60% 20%

23

IT budget allocations

Since 2009, when these Global IT Trend

Study first began gathering IT budget-

ary data, the survey focused on two

major categories: people and things.

These two categories were further

subdivided into In-House, Outsourced,

and Foreign and Domestic spending.

In Table 10 both Europe (2014 & 2015)

and the Global figures (2009-2015) are

provided.

The internal staff-domestic spending is

19.7% of the European IT organizational

budget. The surveyed organizations

predict a decrease to 17.9%, whereas

the anticipated global budget allocation

for internal staff-domestic increases

from 17.1% in 2014 to 19.5% in 2015.

Considering the internal staff offshore,

the trend to increase in Europe and

globally. Interestingly the trend for

domestic outsourcing (within the con-

tinent) shows a flat budget allocation

within Europe (12%) in the years 2014 to

2015, whereas the global trend shows

a significant decrease of allocated IT

budget to outsourced services domes-

tic (from 16.9% to 6.8%) with regard to

people services. Spending on consulting

services shows a decrease in Europe

and globally.

Considering the spending on ‘things’,

the global and European trend is de-

creasing for in house-domestic expens-

es. At the same time, in-house offshore

increased globally from 5.4% to 11.9%

whereas within Europe the trend is less

significant with 6.9% in 2014 compared

with 7.3% in 2015. Both Global and

Europe show a significant increase in

outsourced things both domestic and

offshore.

IT Budget Area

20

15 p

roje

cte

d

Eu

rop

e

20

14 A

ctu

al E

uro

pe

20

15 p

roje

cte

d

Glo

bal

20

14 A

ctu

al G

lob

al

20

13 G

lob

al

20

12 G

lob

al

20

11 G

lob

al

20

10 G

lob

al

20

09

Glo

bal

AV

ER

AG

E:

PE

OP

LE V

. TH

ING

S

PEOPLE

Employees / Internal Staff:

Domestic

17,9% 19,7% 19,5% 17,1% 30,4% 21,0% 31,0% 43,0% 39,0%

Offshore 11,4% 10,3% 10,9% 9,9% 4,2% 11,0% 5,0% 3,0% 4,0%

Outsourced Services/

Contractors: Domestic

12,0% 12,0% 6,8% 16,9% 8,7% 10,0% 9,0% 7,0% 8,0%

Offshore 9,8% 9,3% 7,1% 10,5% 3,9% 8,0% 3,0% 5,0% 4,0%

Consulting Services 5,6% 6,1% 6,1% 6,6% 7,2% 10,0% 11,0% 10,0% 12,0%

TOTAL People 56,8% 57,4% 50,4% 61,0% 54,4% 60,0% 59,0% 68,0% 67,0% 59,2%

THINGS: HARDWARE, SOFTWARE, FACILITIES

In-house - domestic 16,4% 18,7% 12,7% 15,9% 28,3% 22,0% 30,1% 32,0% 33,0%

In-house – offshore 7,3% 6,9% 11,9% 5,4% 3,7% 2,0%

Outsourced - domestic 11,2% 9,6% 12,8% 7,3% 10,5% 13,0% 10,9%

Outsourced - offshore 8,3% 7,3% 12,2% 10,4% 3,2% 3,0%

Total Things 43,2% 42,6% 49,6% 39,0% 45,6% 40,0% 41,0% 32,0% 33,0% 40,8%

Table 10.

IT budget allocations Europe & Global

Figure 8.

Total in house IT staff size in Europe

Figure 7.

Percentage of company’s personnel is IT (%)

2014 > 2013

2014 = 2013

2014 < 2013

24

IT staffing and salary trends

To provide greater insight into the

IT personnel practices, IT staffing is

another area that was refined and

expanded considerably in this year’s IT

Trend Study.

IT staffing as percentage of the total

company’s personnel differs between

the European countries as displayed

in Figure 9. On average more than six

percent of the total staff within the or-

ganization is IT staff in Belgium (7.16%),

Luxembourg (8.15%), the Netherlands

(6.72%), Portugal (7.78%), and UK

(8.60%). In Italy (2.29%), Macedonia (2%),

and Norway (2.33%) the percentage of

total staff being IT personnel is below

three percent.

Interesting are the changes in IT staff-

ing. These changes in previous year are

displayed in Figure 8.

When comparing Figures 7 and 8, the

decrease in IT staff looks on aver-

age to be higher in countries’ with a

higher percentage IT staff compared

to total staff. Within Belgium, Finland,

Luxembourg and Switzerland the IT staff

decreased more than in other countries.

In Germany 50% of the organizations

reported an increase in IT staff followed

by Norway with 45% of the organiza-

tions reporting an increase in IT staff.

In Austria 75% of the organizations

reported a flat number of IT staff in 2014

compared to 2013.

0 10 20

30

40

50

60

70 80

90

100

270+430+300=250+500+250=700+200+100=160+610+240=260+480+260=

100+450+450=280+480+240=

360+360+290=330+330+330=

40+460+500=210+360+430=480+240+280=440+160+400=60+750+190=

27% 43% 30%

25% 50% 25%

70% 20% 10%

16% 61% 24%

26% 48% 26%

10% 45% 45%

28% 48% 24%

36% 36% 29%

33% 33% 33%

4% 46% 50%

21% 36% 43%

48% 24% 28%

44% 16% 40%

6% 75% 19%

0 10 20

30

40

50

60

70 80

90

100

558=860=600=778=550=360=233=672=200=815=229=300=346=592=447=716=359=

5,58

8,60

6,00

7,78

5,50

3,60

2,33

6,72

2,00

8,15

2,29

3,00

3,46

5,92

4,47

7,16

3,59

Europe

U.K.

Switzerland

Spain

Portugal

Poland

Norway

Netherlands

Macedonia

Luxembourg

Italy

Iceland

Germany

France

Finland

Belgium

Austria

Europe

U.K.

Switzerland

Spain

Portugal

Norway

Netherlands

Luxembourg

Italy

Germany

France

Finland

Belgium

Austria

25

IT employees and their salaries

To provide greater insight into IT per-

sonnel practices, IT employees and their

salaries was expanded considerably in

this year’s IT Trend Study. The salary

changes in 2014 compared with 2013 by

country are displayed in Figure 9.

In Europe 68% of the organizations

reported a decrease (22%) or flat (46%)

total salaries for IT staff in 2014 com-

pared to 2013. Only 32% of the organi-

zations reported an increase in the total

salaries for IT staff. Within Europe, 57%

of the organizations in Luxembourg

reported increased total salaries in 2014

compared to 2013. At the other end of

the spectrum, only 15% of the organiza-

tions in Portugal reported an increase

in total salaries. In Spain 38% of the or-

ganizations reported a decrease in total

salaries for IT staff in 2014 compared to

2013. The lowest decrease is reported

by United Kingdom (9%) and Germany

(10%). Both UK and Germany expect a

higher decrease of total IT salaries in

2015 (Figure 10).

0 10 20

30

40

50

60

70 80

90

100

220+460+320=90+450+450=140+570+290=380+380+230=260+590+150=

260+480+260=

210+210+570=140+520+330=

100+600+300=140+360+500=240+390+360=240+440+320=130+530+330=

22% 46% 32%

9% 45% 45%

14% 57% 29%

38% 38% 23%

26% 59% 15%

26% 48% 26%

21% 21% 57%

14% 52% 33%

10% 60% 30%

14% 36% 50%

24% 39% 36%

24% 44% 32%

13% 53% 33%

Europe

U.K.

Switzerland

Spain

Portugal

Netherlands

Luxembourg

Italy

Germany

France

Finland

Belgium

Austria

Figure 9.

Total salaries for IT staff in 2014 compared to 2013

2014 > 2013

2014 = 2013

2014 < 2013

Figure 10.

Total salaries for IT staff in 2015 compared to 2014 (projected)

2015 > 2014

2015 = 2014

2015 < 2014

0 10 20

30

40

50

60

70 80

90

100

26

IT Skills

A pervasive and persistent complaint

from IT leaders are that their people

do not have the right competencies

and that they have job openings but

cannot find people with the right skills.

As previously presented, the advent of

SMAC technologies is having a signifi-

cant impact on enterprises around the

globe. These changes are driving com-

mensurate changes in ITs role and the

demand for qualified IT professionals

at all levels with an appropriate balance

of technical, management, leadership,

industry, and interpersonal skills. They

differ across geographies based on the

respective degree of importance placed

on introducing many of the required

changes, albeit are rather homogenous

across Europe.

The global top five skills identified for

mid-level hires are:

1. collaboration/teamwork - North

America and Latin America were

ranked as number 1; where Asia was

5th, Europe 6th; Australia 14th, and

Africa 20th.

2. business analysis - was ranked 2nd

by Australia, 3rd by Europe, 4th by

Asia, 7th by North America, 7th by

Africa, and 31st by Latin America.

3. technology architecture - Africa

and Asia ranked it number one,

where Europe has it 5th, Australia

11th, Latin America 14th, and North

America 18th.

4. user relationships - Europe has it

ranked 1st, Africa 4th, Asia 14th,

Australia 15th, North America 19th,

Latin America 32nd.

5. oral communications - was ranked

2nd in Latin America, 5th in North

America, 8th in Asia, 14th in Europe,

and 16th in Australia.

Rounding out the top ten skills for mid-

level candidates are change manage-

ment, functional area (industry) knowl-

edge, people/relationship management,

accounting/finance, and problem

solving.

200+510+290=130+500+380=200+400+400=230+360+410=40+850+120=130+580+290=70+360+570=200+700+100=290+290+430=230+380+380=210+550+240=250+380+380=640+290+70=

20% 51% 29%

13% 50% 38%

20% 40% 40%

23% 36% 41%

4% 85% 12%

13% 58% 29%

7% 36% 57%

20% 70% 10%

29% 29% 43%

23% 38% 38%

21% 55% 24%

25% 38% 38%

64% 29% 7%

Europe

U.K.

Switzerland

Spain

Portugal

Netherlands

Luxembourg

Italy

Germany

France

Finland

Belgium

Austria

The global top five skills identified for

entry-level hires are:

1. technical knowledge - was ranked

1st by every geography except Asia

where it was ranked 2nd.

2. problem solving - was ranked 2nd

by Europe, 3rd by North America,

4th by Latin America and Africa, and

5th by Asia and Australia.

3. collaboration/teamwork - was

ranked 2nd by North America and

Latin America, 4th by Australia, 9th

by Asia, 10th by Europe, and 18th

by Africa

4. functional area/industry knowledge

– was ranked 3rd by Asia, Europe,

and Latin America, 4th by North

America, and 5th by Africa.

5. technology architecture - was

ranked 1st by Asia, 2nd by Africa, 8th

by Europe, 13th by Australia, 15th

by North America, and 17th by Latin

America.

Rounding out the top ten skills for

entry-level candidates are business

analysis, oral communications, user

relationship management, systems

analysis/design, and analytics/statistics.

The CIO skills are discussed in the sec-

tion on The Future of IT.

About 64% of the organizations in

Austria report an expectation to have

lower total salaries for IT staff in 2015

which is significantly different from

other European countries’. This is con-

sistent with the expectation of organi-

zations in Austria for flat or decreased

IT budgets at 80% of the organizations

reported (Figure 7).

Figure 11.

IT staff turnover rate 2014

27

1000=392=309=365=550=387=325=700=157=464=300=617=414=

10,17

3,92

3,09

3,65

5,50

3,87

3,25

7,00

1,57

4,64

1,300

6,17

4,14

Europe

U.K.

Switzerland

Spain

Portugal

Netherlands

Luxembourg

Italy

Germany

France

Finland

Belgium

Austria

Turnover and Retirements, education and training

Last year we saw a significant decrease

in the IT turnover rate over 2013 within

Europe (from 4.7% to 3.8%). Globally

there was an increase in the IT turnover

rate. This research year the European

turnover rate increased to 4.14%. In

Figure 11, the turnover rate of European

countries are displayed.

The European IT staff turnover rate is

below the global average of 6.17% in

the same research year. On average in

the research period 2006 - 2014 the

average is 5.97% for the global IT staff

turnover rate.

Consistent with previous years, the

European organizations report a low

percentage of IT budget allocated for

education/training (Figure 12). Africa

and Australia also reported a low per-

centage of IT budget allocated for edu-

cation and training. European organi-

zations reserved 2.12% of the total IT

budget for training and education, 34%

less than the global average of 3.23% of

the total IT budget and even 46% less

than North American organizations.

This is further illustrated by the strong IT

management education activity by the

Global Institute for IT Management in

Asia, Latin America, and North America.

Figure 12.

Percentage of IT budget allocation for education/training

28

Africa

0%

2%

4%

6%

8%

10%

12%

2009 2010 2011

2012 2013 2014

Asia Europe North America Latin America Australia Global

235 210 434 665 302 265

234 220 334 212 270 344

323 287 468 395 210 434 665 667 210 434 665 125 309 452

792 338 487 323

4,52%Avg. of yearly

averages

“European organisations reserve 2,1% of IT budget for training and education, versus 3,2% worldwide”

29

Figure 13.

CIO tenure across the continents

These responses provide insights into

what the IT organization is doing and

how it is performing and interacting

with the business. To better understand

the role and activities of IT leaders in

organizations, we turn to the data set

consisting of the people who respond-

ed they are the ‘top IT person (e.g., the

CIO)’ in their organizations. Hereafter

we will refer to them as the ‘top IT

executive’ or the ‘CIO’.

CIO Tenure

The average time the CIOs have been

in their current position decreased this

year by 20% globally from last year,

from 5.8 to 4.6 years (see Figure 13). In

Europe the CIO Tenure decreased by

almost 4% from 5.4 to 5.2 years. The

average tenure since 2006 is 4.7 years,

down from last year’s average of 4.77.

Overall, CIO tenure appears to be on

an upward trend over the last decade

with a significant breaking point this

year. The overall trend is confirmed by

other studies; although, CIO job tenure

varies across studies4. The respondents

in this year’s study reported lower CIO

tenure than in the last two years (twice

5.8 years). The median CIO job tenure

decreased to two years, especially due

to Asia. Within Europe the highest num-

ber of CIOs with over ten years in their

current job is 71 CIOs in this survey. The

European CIOs tenure is 5.2 years.

In terms of distribution, it is worth not-

ing that nearly half of the CIOs have

been in their current position for less

than three years. On the other hand

over ten percent of the CIOs have been

in their current position for ten years or

more.

Within Europe there are significant

differences between the responding

countries (see Figure 14). In Austria the

CIO Tenure is only 1.59 years, whereas

Norway the CIO tenure is 9.5 years. UK,

Netherlands, Luxembourg, France and

Finland are rather close to the European

average.

CIO reporting relationships, time allocation, background, tenure and performance measurement

4 As of July 2014 http://www.ejobdescription.com/IT_salary_survey.html reports CIO tenure at 4.33 years. In January 2014 CIO magazine reported it at 5.92 years. http://fedscoop.comsurvey-2014-brings-challenges-wind-shift-cios/.

0%

2%

4%

6%

580 580 460 270 451 430 190 599 540 520 600 520 530 644 690 550 451 430 680

Africa Asia Europe North America

Latin America

AustraliaGlobal

Figure 14.

IT staff turnover rate 2014

520=

489=

200=

187=

674=

950=

433=

493=

680=

174=

573=

624=

754=

159=

5,2

0

4,8

9

2,0

0

1,8

7

6,7

4

9,5

0

4,3

3

4,9

3

6,8

0

1,74

5,7

3

6,2

4

7,5

4

1,5

9

Eu

rop

e

U.K

.

Swit

zerl

and

Spai

n

Po

rtu

gal

No

rway

Ne

the

rlan

ds

Luxe

mb

ou

rg

Ital

y

Ge

rman

y

Fran

ce

Fin

lan

d

Be

lgiu

m

Au

stri

a

5,8

5,8

4,6

2

,7

4

,51

4

,31,

9

5,9

9

5,4

5

,2

6

5

,2

5,3

6

,44

6,9

5

,5

4

,51

4

,3

6

,8

4,7%Avg. of yearly

averages

CEO/President

CFO

COO

Business Unit Executive

Board of Directors

0 10 20

30

40

50

60

70 80

90

100

400+250+190+70+90= 180+450+270+0+90= 410+180+180+50+170= 560+160+40+120+120=290+280+110+40+280= 650+140+210= 500+250+150+50+50= 250+500+250= 460+230+80+80+150= 260+130+300+300= 670+130+130+80= 500+500=

40% 25% 19% 7% 9%

18% 45% 27% 9%

41% 18% 18% 5% 17%

56% 16% 4% 12% 12%

29% 28% 11% 4% 28%

65% 14% 21%

50% 25% 15% 5% 5%

25% 50% 25%

46% 23% 8% 8% 15%

26% 13% 30% 30%

67% 13% 13% 8%

50% 50%

Europe

U.K.

Spain

Portugal

Netherlands

Luxembourg

Italy

Germany

France

Finland

Belgium

Austria

Figure 15.

Reporting line CIOs

31

CIO Reporting Relationship

The role of the CIO is often thought to

be shaped by to whom they report; al-

though it is unclear to what extend and

in what way formal reporting relation-

ships are related to CIO focus and job

activities5, Luftman alignment maturity

research has found that organizations

where the CIO reports to the CEO

outperform their competitors. Within

Europe, just over 40% of the respond-

ing top IT executives report directly to

their CEO (globally about 39%), a fourth

(25%) report directly to their CFO (27%

globally), and about 19% of CIOs report

to their organization’s COO (28.5%

Globally) (see Figures 15 and 16).

As for the CIO tenure the report-

ing structure differs significantly by

European country. In Luxembourg 64%

of the CIOs report directly to the CEO,

where in Belgium it is 67%. In the United

Kingdom it is only 18%.

Interestingly in the Netherlands 29%

of CIOs report to the CEO and 29% to

the Board of Directors. However, their

alignment maturity is only 2.53 out of a

maximum 5. The Global 1,000 compa-

nies average alignment level is at 3.11,

and 35.6% of the CIOs report directly to

the CEO and only 6.1% to the Board of

Directors.

From a global perspective a trend line as

shown in Figure 16, suggests that there

is a slow moving trend of an increas-

ing percentage of CIOs not reporting to

CEOs and CFOs but to the COO. Other

studies show increases for CIOs report-

ing to CEOs6, but such trends, if present,

do not appear particularly strong except

for the decrease in direct reporting to the

CEO. The percentage of CIOs directly

reporting to the CEO decreased from

nearly 60% in 2011 to below 40% in 2014.

5 Plante & Bain (2005), “The Changing Role of the CIO: Why IT Still Matters,” IT Professional, 7(3), 45-49 and Smaltz, Sambamurthy, & Agarwal (2006), “The Antecedents of CIO Role Effectiveness in Organizations: An Empirical Study in the Healthcare Sector,” IEEE Transactions on Engineering Management, 53(2), 207-222 found CIO reporting relationships to be unrelated to CIO job activities; however, Carter, Grover, & Bennett (2011), “The Emerging CIO Role of Business Technology Strategist,” MIS Quarterly Executive, 10(1), 19-29 did find a relationship between to whom CIOs report and the focus and activities of CIOs.

6 CIO magazine’s ‘State of the CIO 2014’, Kim Nash reports that ’44 percent of the CIOs report to the CEO, up from 39% last year’, http://www.cio.com/article/2380234/cio-role/state-of-the-cio-2014-the-great-schism.html.

Figure 16.

CIOs report to, 2005-2014 (global)

40%

30%

20%

10%

0%0 10 2

0

30

40

50

60

70 80

90

100

420+160+140+280= 0+0+330+670= 500+0+500= 450+150+400= 1000= 100+300+100+500= 200+0+200+600= 400+0+0+600= 1000= 250+750= 410+410+50+140= 1000= 1000=

42% 16% 14% 28%

33% 67%

50% 50%

45% 15% 40%

100%

10% 30% 10% 50%

20% 20% 60%

40% 60%

100%

25% 75%

41% 41% 5% 14%

100%

100%

Europe

U.K.

Switzerland

Spain

Portugal

Netherlands

Luxembourg

Italy

Germany

France

Finland

Belgium

Austria

Figure 17.

CIO prior employment, Europe 2014

IT, same organization

IT, outside organization

non-IT, same organization

non-IT, outside organization

32

CIO Previous Employment

CIOs responded to this question

regarding their prior position before

becoming the top IT executive in their

current organizations. Most CIOs still

come from a prior IT position (58% in

Europe, 79% globally); but this is down

this year from the 92% in 2010 and 2011

to 79% in 2014.

Within Europe (Figure 17) significant

differences can be found by country.

Within Germany and Austria 100%

of the surveyed CIOs came from an

internal IT organization. Finland (41%),

Netherlands (30%) and Spain (15%) hired

the CIO from an external IT company.

Also interestingly, within Europe 28%

of the CIOs came from outside the

company from a non IT function; the

highest globally (Africa 17%, Asia 8%,

North America 7%, Latin America 24%

and Australia 13%). More significantly,

this appears to be an important change

in the organization from where CIOs

are hired.

CEO

CFO

COO

SBUTHIS LOOKS LIKE A TREND

THIS LOOKS LIKE A TREND

THIS COULD BE A TREND

60%

50%

IT, same organization

IT, outside organization

non-IT, same organization

non-IT, outside organization

33

Globally it also appears that more CIOs

are being hired from non-IT positions,

at 21% this year, up from 18% last year

and above the five-year average of 15%

(see Figure 18).

Bottom line, 58% of CIOs came from

another company, 35% were promoted

from within, 79% came directly from a

prior role in IT, and 21% were hired from

a prior non-IT role. As Figure 18 indi-

cates, over the past several years there

has been a significant increase in CIOs

being hired from outside their current

employer, and a commensurate de-

crease in those being promoted to CIO

from within, regardless of whether they

were in a prior IT position or not.

0%

Figure 18.

Global last position before CIO or equivalent (2010 to 2014)

350 360 330 310 380 440 460 470 610 540 70 50 120 40 40 140 130 80 30 40

35

%

36

%

33

%

31%

3

8%

20%

40%

80%

60%

2010 2011 2012 2013 2014

44

%

46

%

47%

6

1%

54

%

7%

5%

1

2%

4%

4%

14

%

13

%

8

%

3%

4%

34 Performance Measurements for CIOs

The investigation of IT performance

metrics was added to the IT Trends

Study in 2012 to gain a better under-

standing of how IT is being assessed

and measured. This year respondents

were provided a list of 32 metrics (up

from only 14 last year) and asked to

separately “select up to three (3) of your

organization’s most important perfor-

mance measures for: internal IT, out-

sourced IT, and your own performance.”

The personal performance question was

added this year for the first time.

Table 11 shows the percent of the

organizations selecting each metric

in the category internal IT metrics per

geography. The Table is sorted by the

rankings of the global internal IT perfor-

mance measures used most. No trend

can be discerned, of course, since this

is the first time these CIO most used

internal performance measures data are

available; nevertheless, some important

findings are in evidence.

Examining the CIOs’ top 10 most

selected performance measures, as

shown in Table 11, notice that only three

focus on IT, while the other seven are

business focused. Equally, if not more

important, four of these top 10 are

strategic, including three of the top four,

as well as the top three: “Value of IT to

the business” (selected by over 40%).

The others are: Innovative/new ideas

(ranked 6th), Business cost reduction/

control (7th) and workforce reduction

(9th). Since performance measurements

are tied to incentives and deliverables,

this points to the current overall strate-

gic and business focus of these CIOs, a

good thing indeed.

Rounding out the top five for CIOs

are second ranked “User satisfac-

tion”, “Value of IT to the business” (at

third), fourth ranked “Satisfaction of

internal IT customers”, and number

one “Availability,” which is one of two

IT-focused performance measure to

appear in the top five for CIOs, selected

by the respondents. Moreover, although

the performance of the IT organization

is still important to their overall evalu-

ation, with five IT-centric performance

measures in their top 10, it appears the

CIOs are increasingly evaluated on their

overall contribution to the organization.

Nevertheless, the performance met-

rics for CIOs and in-house IT do have

a lot in common with “Innovative new

ideas” (ranked 6th by the CIOs) and

“Value of IT to the business” (ranked

3rd). Nevertheless, with two of Internal

IT’s top six performance measures

focused on the business, and half of

their top 10 IT focused, it is clear that

alignment of IT and business is alive

and well. As might also be expected,

Outsourced IT is more about keeping

the IT lights on than Internal IT, with

their top five metrics all IT focused

(not in this table). CIOs share only one

performance measure in their top five

with Outsourced IT – “Availability.” They

do share six in their top 10, however,

which is also indicative of an alignment.

Similarly, Internal and Outsourced IT

share seven measures in their top 10

lists.

35

Glo

bal

Afr

ica

Asi

a

Eu

rop

e

No

rth

Am

eri

ca

Lati

n A

me

ric

a

Au

stra

lia

Availability (Up time) 1 20 13 1 1 2 28

Customer satisfaction (internal IT customers) 2 4 3 11 2 1 5

Value of IT to the business 3 28 31 3 4 12 8

Satisfaction of internal IT customers

(e.g., portals, social, mobile)

4 21 26 9 3 14 32

Projects delivered on time 5 22 25 5 5 4 29

Innovative / new ideas 6 29 14 2 16 7 3

Help-desk performance 7 8 8 18 6 3 18

Business cost reduction/control 8 5 4 12 11 6 6

Workforce reduction 9 1 1 19 24 18 15

Projects delivered on budget 10 6 19 7 8 24 16

Productivity improvement 11 12 16 21 7 5 10

SLA target compliance 12 23 27 15 19 8 1

Employee attrition / retention / turnover 13 7 9 4 18 17 23

Increases in new products / services 14 13 2 26 22 15 2

IT cost control 15 24 10 24 9 13 19

IT spending as a % of revenue 16 2 15 20 12 16 17

IT cost / headcount reduction 17 14 5 6 20 21 24

Time to market 18 3 29 16 13 25 9

IT’s contribution to strategy 19 9 21 27 10 9 30

Revenue growth 20 15 30 10 15 26 25

Project return on investment (ROI) 21 10 22 14 17 10 20

Improved decision making 22 30 6 23 21 8 26

Profit / Profit growth 23 16 17 22 25 22 11

Total cost of ownership 24 31 32 25 14 20 21

Lower error rates by users/customers 25 17 23 8 27 19 27

IT spending per employee 26 25 20 13 28 30 7

Industry-specific measurements 27 18 7 17 29 23 22

Quality / defect rates in software 28 11 18 30 23 28 31

Return on equity (ROE) 29 19 28 31 26 31 4

Compound annual growth rate (CAGR) 30 26 11 28 32 27 13

Earnings per share 31 27 12 29 30 25 14

Stock price 32 32 24 32 31 32 12

Table 11.

CIO performance measures (with internal it metrics used)

Figure 19.

How CIOs spend their time across geographies (2014)

36 How CIOs spend their time, with whom, and what they do with them

The job of the CIO is complex and

evolving. Since 2007, the IT Trends

Study questionnaires have included

questions regarding how CIOs spend

their time. In particular, how much of

their time (the “how much”) they spend

with whom (the “who”) doing which

activities (the “what”). These questions

were expanded last year, and additional

questions added to assess how often

CIOs meet with various other senior

executives (expanding the “who” to

be more specific and adding the “how

often”). Questions were also added to

determine to what extent CIOs believe

those C-level relationships contribute

to the value of IT to the organization

(the “how valuable”). This year, these

questions were further expanded and

improved, with the “who” and “what”

being separated for the first time, and

both those lists expanded significantly.

These improvements, and the inclusion

of all five of these dimensions (specifi-

cally, how much, with whom, doing

what, how often, and how valuable),

significantly increase our ability to

understand and track changes in the

multifaceted role of the CIO in these

times of rapid change, albeit, it makes

it difficult to draw comparisons from

previous years.

The results are shown in Table 12. Not

surprisingly, CIOs report that on aver-

age they spend 8% of their time inter-

acting with IT employees within their

organization. CIOs spend over 26% of

their time interacting with non-IT peo-

ple within their organization (13% with

C-level, 13% with non-IT non-C-level),

indicating a significant focus on the

overall business.

0 10 20

30

40

50

60

70 80

90

100

100+90+130+120+130+100+100+90+100+50= 140+110+80+90+90+130+70+90+100+100= 100+50+70+130+210+160+70+20+180+0= 120+90+170+130+110+80+100+70+70+50= 80+110+90+90+90+60+100+80+160+140= 80+100+100+90+150+110+60+80+160+70= 110+110+150+120+120+80+100+70+100+50=

10% 9% 13% 12% 13% 10% 10% 9% 10% 5%

14% 11% 8% 9% 9% 13% 7% 9% 10% 10%

10% 5% 7% 13% 21% 16% 7% 2% 18% 1%

12% 9% 17% 13% 11% 8% 10% 7% 7% 5%

8% 11% 9% 9% 9% 6% 10% 8% 16% 14%

8% 10% 10% 9% 15% 11% 6% 8% 16% 7%

11% 11% 15% 12% 12% 8% 10% 7% 10% 5%

Australia

Latin America

North America

Europe

Asia

Africa

Global

Architecture

IT Governance

IT operations

HR

Relationship with Business

In Europe breakdown is in Figure 19. IT

operations takes 17% of the CIO time,

the highest of all geographies whereas

“relationship with business” is almost

half of the percent (11%) of the North

American CIOs (21%). Considering the

earlier alignment discussion, additional

focus on business relationships could

be recommended.

The interaction of CIOs with other

C-level in Europe is in Figure 20. Almost

twenty percent of the CIOs (19.8%)

in Europe interact with the CEO on a

monthly basis, 17.8% on a weekly basis

and 13.9% more than once a week. Over

51% of the CIOs talks to CEO at least

monthly (53.5%). The interaction with

the CFO in Europe is higher at 58.6%

indicating at least monthly with the

CFO. But the most interaction is with

the COO, with almost 65% of the CIOs

interacting at least monthly.

Relationship with IT staff

Relationship with Vendors

Software Development

Strategy

Other

Table 12.

How CIOs spend their time (global)

Figure 20.

CIO interaction with c-level (Europe)

0 10 20

30

40

50

60

70 80

90

100

117+21+11+85+117+138++4+160+202+85= 169+34+11+236+146+135++7+79+101++2= 0+30+20+182+172+141++1+141++162+5= 40+40+30+158+198++9+79+178+139+50=

11,7 2,1 1,1 8,5 11,7 13,8 6,4 16,0 20,2 8,5

16,9 3,4 1,1 23,6 14,6 13,5 6,7 7,9 10,1 2,2

1 3 2 18,2 17,2 14,1 9,1 14,1 16,2 5,1

4 4 3 15,8 19,8 8,9 7,9 17,8 13,9 5

COO

CMO

CFO

CEO

No interaction

Less than once a year

Once a year

Less than once per month

Once a month

More than once a month

Less than once a week

Once a week

More than once a week

At least daily

37

2014 Categories CIO or Equivalent

Previous years (global): How CIOs spend their time

2007-2012 Categories

2014 2013 2012 2011 2010 2009 2008 2007

IT priorities/strategy 10% 12.7% 10.0% 13.0% 13.0% 15.0% 17.0% 16.0% Strategy

Business priorities/strategy

10% 10.9%

Interacting w/ inter-nal IT employees

8% 11.9% 11.0% 5.0% 11.0% 12.0% 15.0% 13.0% Relationship mgmnt w/ IT staff

Interacting w/ non-IT non C-Level

13% 10.1%

IT Operations 16% 10.7% 12.0% 15.0% 13.0% 15.0% 8.0% 8.0% Operations

Interacting w/ non-IT C-level

13% 13.3% 15.0% 14.0% 18.0% 19.0% 26.0% 23.0% Relationship mgmnt w/ business

Interacting with IT. non employees

10% 7.6% 8.0% 5.0% 6.0% 0.0% 0.0% 0.0% Relationship mgmnt w/ vendors

IT governance 11% 8.7% 10.0% 11.0% 9.0% 10.0% 11.0% 11.0% IT governance

IT Human resources 12% 8.0% 9.0% 15.0% 7.0% 8.0% 7.0% 8.0% Human resources

Software development

7% 5.3% 7.0% 4.0% 6.0% 6.0% 4.0% 6.0% Software development

Other 5% 0.9% 9.0% 9.0% 11.0% 10.0% 6.0% 7.0% Non-IT

9.0% 9.0% 7.0% 7.0% 6.0% 8.0% Architecture

38 This year we asked a dozen questions to elicit the perspective

of the future of IT. The Appendix I includes the summary of the

respective global questions and their results. A summary is:

1. 84% of respondents believe that there will be an internal

IT organization in the future. Within Europe 82% of the

responding organizations answered that an internal IT

organization will still be needed.

2. Governance (29%) and demonstrating value (23%) will

provide the most significant changes.

In Europe both ‘Contribution/value to the business (29.8%)

and ‘Organizational reporting’ (26.3%) are considered the

most significant change to IT in the future. With regards

to organizational reporting the combination with Business

Intelligence/Big Data is made (see management con-

cerns/IT Trends in this report). Significant country differ-

ences are:

· United Kingdom sees Governance/Relationship to

Business as the most significant change to IT in the

future (40% of responding organizations)

· Switzerland sees Governance/Relationship to Business

as most significant change to IT in the future (50% of

responding organizations)

· Spain also sees ‘Gaining value from Cloud’ as significant

change to IT in the future (21.9%)

· Poland sees Governance/Relationship to Business as

most significant change to IT in the future (66.7% of

responding organizations)

· The Netherlands is most focused on ‘Contribution/value

to the business’, 60.7% of the responding organizations

identified this item as the most significant change to IT

in the future

· Luxembourg also sees ‘Gaining value from Cloud’ as

significant change to IT in the future (23.1%)

· Germany ‘Human Resources/Skills/Sourcing’ was

selected by most responding organizations as most

significant change to IT (36.4%)

3. While the skills required for entry-level and mid-level IT

professionals were previously discussed, the skills identi-

fied for CIOs (or head of IT) are described here. Overall,

like with mid-level and entry-level professionals, they

differ across geographies; albeit they have remained

relatively stable over the years, and are consistent across

Europe. The top five skills for CIOs are:

· leadership - has been and remains the top skill in North

America and Europe; it was ranked 5th in Africa, 11th in

Latin America, 14th in Asia, and 31st in Australia.

· change management – was ranked 1st in Africa, 2nd in

Latin America, 5th in Asia, 6th in Latin America, 9th in

Australia, and 16th in North America.

· business analysis – was ranked 2nd in Europe, 5th in

Asia, 65h in Latin America, 7th in Africa, 9th in North

America, and 14th in Australia.

· budgeting – was ranked 3rd in Latin America, 7th in

Europe, 11th in Asia, 12th in North America, and 13th in

Africa and Australia.

· oral communications - Asia ranked it 2nd, North

America 5th, Latin America 7th, Europe 9th, Australia

15th, and Africa 29th.

Rounding out the top ten CIO skills were user/relationship

management, accounting/finance, collaboration with oth-

ers, emotional intelligence, and decision making.

Globally 27% of the organizations predict that the future

skills of the CIO will be more business, 42% stated it will

be more business & technical, 19% stated it will be un-

changed and 12% of the responding organizations world-

wide predicted that there will be no CIO (head of IT) in the

future.

Within Europe differences can be found, in Switzerland

100% of the responding organizations stated that more

business & technical skills will be needed with regard

to the future CIOs. This is, partly, confirmed by Spain

(50%), France (50%) and Finland (47.6%). Other countries

within Europe tend to state that there will be no change

needed with regard to the skillset of the future CIOs.

Within Belgium 61.1% predicted skills of future CIO will be

unchanged. This supported by countries such as Portugal

(52.2%) and in lesser extend by Italy (46.7%), Spain (40%)

and Germany (40%).

Within Finland most organizations believe that especially

business skills are added to the future CIO. A number

of organizations do believe that there will not be a CIO

(head of IT) needed in the future. This belief is stronger in

Germany (30% of the responding organizations) and in the

Netherlands (25%).

4. The most effective way to communicate to the business is

via board meetings/presentations (44%).

European countries predict that informal discussions/

meetings are the most effective way to communicate for

CIO. This is stated by 51% of the European responding or-

ganizations which is 64% more than global average (31%).

Future of IT

39Organizations within European countries tend to see

board meeting presentations as a lesser effective way to

communicate for CIOs than other geographies. 22% of

the European organizations see board meeting presenta-

tions as the most effective way to communicate which is

significant lower than other geographies. In Australia 83%

of the organizations state that board meeting presenta-

tions is most effective way to communicate for CIOs,

in Asia 88%, Latin America 34%, North America 34% and

Africa 35% of the organizations.

Also above average is the usage of IT briefings as most ef-

fective way to communicate for CIOs, 9% of the respond-

ing organizations predict this way of communication as

most effective. This is 80% above the global average of 5%

of the responding organizations.

5. The largest increase in developing and maintaining

between Europe and the rest of the geographies exist

with regard to the expectations towards Cloud Service

Providers. Only 10.2% of the European organizations see

Cloud Service Providers as the largest increase in devel-

oping and maintaining whereas other geographies are all

above forty percent (Australia 43%, Latin America 43%,

North America 44%, Asia 42% and Africa at 60%) stating

that Cloud Service Providers will be the largest increase in

developing and maintaining applications.

Within Europe only Finland is the big exception with

50% of the Finish organizations stat that Cloud Service

Suppliers will be the largest increase in developing and

maintaining, five times more than the European average.

Most European countries predict that the largest in-

crease in developing and maintaining will be in COTS

(Commercial Off-The-Shelf) and ERP (Enterprise Resource

Planning). The largest indication for COTS are United

Kingdom (50%), Switzerland (50%), Luxembourg (53.8%)

and Italy (31.3%). The largest selection for ERP is support-

ed by Spain (33.3%), Italy (43.8%) and Germany (54.5%).

Outsourced off-shore were largely selected by

Switzerland (50%) and France (53.3%).

6. Globally 36% of the organizations predict that IT applica-

tion development staff primarily will be centralized. Within

Europe this percentage is 26.9%. The centralized IT appli-

cation development staff in the future is mainly predicted

by countries such as United Kingdom (55.6%), Switzerland

(50%), Germany (50%) and Finland (42.9%).

European countries tend to predict a networked IT ap-

plication development staff in the future more than on a

global scale. 45.1% of the European organizations predict

that networked IT application development staff will be

the primarily organization structure whereas globally 27%

of the organizations believe this is true. Within Europe

especially Spain (58.6%), Portugal (61.9%), Italy (66.7%),

France (62.5%) and Belgium (53.3%) foresee the networked

organization structure as the primary structure for future

IT application development staff.

7. The most important skill for the CTO will be knowledge of

applying IT to the business (62%).

Another development is the role of the Chief Technology

Officer (CTO) focusing on turning technology to business

value. Globally 38% of the organizations believe there

will not be a CTO in the future. European surpasses this

percentage with 46.9% of the European organizations.

This percentage is lowest in North America with just 4%

of the organizations stating that there will not be a CTO in

the future.

United Kingdom (50%), Portugal (69.9%), Luxembourg

(61.5%), Italy (58.8%), France (54.4%) and Belgium (77.3%)

state that there will not be a CTO in the future.

The countries where the expectations is that the CTO in

the future will be more technical are the Dutch (46.2%),

where the Finish organizations expect the CTO to be

more business & technical in his/her expertise.

8. When considering the most important skill of the CTO,

63% of the European organizations expect the CTO to

have knowledge of applying IT to the business. This is also

the main expectation on a global scale, supported by 62%

of the world wide organizations.

9. Globally 70% of the researched organizations believe that

the support of IT infrastructure is done by a Cloud service

provider. This percentage is lower within Europe at 62%.

10. The lead executive for data/analytics should report to the

CEO (38%), Applications Executive (29%), or the CIO (23%).

Big Data is a hot topic (see also management concerns/

Trends in IT in this report). European organizations tend

to see applications executives as the chief executive to

report Big Data initiatives to. This is supported by 46% of

40 the European organizations. 37% of the European organi-

zations state the reporting should be directly to the CEO

which is close to the global percentage of 38%. Just 9%

of the European organizations believe that the Big Data

initiatives should be reported to the CIO, which is con-

siderably lower than the global believe of 23% and much

lower than the opinion of Australian companies (38%),

Latin America companies (45%), North America (52%) and

Asia (38%).

11. The most important IT skill for non-IT executives are IT

governance (31%) and IT HR/sourcing/organization (28%).

30% of the European companies support IT governance.

23% of the Europeans forecast that the most important

skill of the non-IT executives will be to identify and imple-

ment trends in leveraging IT, this forecast is lower than the

global average whereas 28% of the organizations forecast

this skill as most important.

12. The most important consideration for a service provider is

reliability/responsiveness (63%).

Interestingly European companies consider more techni-

cal skills/expertise as most important consideration in ser-

vice provider than other geographies. 9% of the European

companies selected technical skills/expertise as the most

important consideration in service provider in the future.

41So what does all of this really mean? In essence:

IT is reshaping global markets while reshaping itself as it becomes the business.

While different countries withen Europe have responded

differently, with the enduring economic uncertainties prevail-

ing, and the dramatic changes across every industry being

enabled/driven by IT, organizations are continuing to focus on

leveraging IT to swiftly reduce expenses and, more recently

to increase revenues. SMAC (Social, Mobile, Analytics, and

Cloud) technologies are clearly transforming the industry.

While IT appears to be quite resilient, with IT budgets, hiring,

and salaries on the rise, upon closer analysis, these increases

continue to evolve cautiously. This guarded trend has brought

increased attention to reducing IT budgets through IT infra-

structure spending (especially Cloud) and innovative sourcing

models.

Are we seeing the end of the CIO role and position as we have

known it? We are clearly seeing the role of the CIO and the

overall IT organization undergoing a significant transforma-

tion. It is those organizations and individuals who are best

prepared that will prosper in these exciting times.

There are pundits and blogs espousing that the end of IT is

near. Rather than dispute the existence of IT in the future, the

important question to consider is what will CIOs or indeed IT

will have in the future.

Not only is IT not going away any time soon, the role of IT is

more important than ever. IT is going through a renaissance

that requires the role of the CIO and IT organization, as well

as how the business and IT organizations collaborate, to

transform.

IT has evolved from a group supporting back office processes,

to enabling front office processes, to driving business innova-

tion. IT is moving from an organization focusing on metrics/

SLAs and expenses to analyse itself, to an organization that is

delivering demonstrable business value through cost reduc-

tion, to an organization that is providing distinctive revenue

increases. IT has evolved from having technical initiatives

motivated by pure technology or business desires to being re-

sponsive to customer/client needs. These are significant shifts

from what we have experienced in the past.

These fundamental changes in technology and how they are

applied by the business are shaping the future of IT. Naturally

not all organizations or geographies can respond in the same

way; different scenarios will enable or inhibit these changes;

albeit the data demonstrates that there are more similarities

than differences. In general, organizations need to recognize

that competitive advantage that is facilitated by IT is clearly on

the rise.

IT organizations, with effective leaders have an opportunity

to position themselves at the heart of corporate strategy. The

key to this positioning is the people having the appropriate

balance of technical, business/management, industry, and

interpersonal skills to meet the challenge that lie ahead.

Summary and Conclusions

42

Appendix I: Future of IT Results

43

39+15+8+6+5+4+4+3+3+3+2+1+1+6+t

44 This research has evolved from the lead

authors coordination of the SIM survey

from 1999-2013. The SIM survey has

been conducted since 1980. Surveys

prior to 2000 focused exclusively on the

top management concerns. Since then,

the survey has been extended to pursue

more specific insights regarding key IT

issues of the day. A significant strength

of this research is in its ability to identify

important trends by comparing survey

data from previous years. Beginning in

2008 the survey has been extended to IT

executives from around the globe.

The 2014 survey was similar to previ-

ous ones in methodology and process.

The questions were based on previous

surveys, with questions modified based

on previous results, and suggestions

from respondents and researchers

(academic and industry). Additionally,

some questions were updated and new

questions were added based on (1) lists

from other similar research, (2) input

from Board members from sponsoring

organizations, and (3) the lead author’s

experience. Additional question were

asked related to the participants view of

the future of IT.

Senior IT executives were invited to take

the online survey. The purpose of this

paper is to provide important interna-

tional insights and trends.

The authors anticipate extending the

reach of this important research to a

more complete set of countries and

geographies, and invite leading re-

searchers with a strong network of IT

executives to contact us.

The authors wish to express their appre-

ciation for the support of Herman van

Bolhuis and Hendrik Deckers (CIONET)

in obtaining the European data.

The European country demograph-

ics for the 801 European organizations

surveyed are below. We hope that the

spread across European countries will

continue to improve.

Most economic sectors and industries

are represented in the figure on the

next page. Differences in representa-

tion can be found in the industries

Food beverages consumer packaged

goods, Telecommunication, Wholesale/

Retail/Trading, Public Sector/Non

Profit, Education, and Auto/Industrial

Manufacturing.

Appendix II: Research Methods, Design, and Demographics

Netherlands

SpainFinland

Germany

Portugal

Austria

Belgium

Italy

Luxembourg

United Kingdom

France

Poland

Switzerland

Other (<1%):

Norway

Romania

Albania

Sweden

Ukraine

Denmark

Ireland

Iceland

Lithuania

Macedonia

Slovenia

Industry representation (global & Europe) 45

393= 201=243= 207=318= 220=991= 239=280= 304=710= 310=262= 414=860= 466=299= 640=1000= 789=804= 828=318= 854=280= 1000=1000= 1000=1000= 1000=822= 1000=

3,93%

2,01%

2,43%

2,07%

3,18%

2,20%

9,91%

2,39%

2,80%

3,04%

7,10%

3,10%

2,62%

4,14%

8,60%

4,66%

2,99%

6,40%

11,78%

7,89%

8,04%

8,28%

3,18%

8,54%

2,80%

10,22%

11,96%

10,28%

10,47%

10,93%

8,22%

13,84%

Construction

Transportation / warehousing

Chemicals / energy / utilities

Food beverages consumer packaged goods

Pharmaceutical / biotechnology / life sciences

Telecommunication

Media / entertainment / travel and leisure

Wholesale / retail/ trading

Healthcare

Public sector / non profit

Hardware / software / networking

Education

Auto / industrial manufacturing

Aerospace / defense

Business professional services

Financial services / real estate / insurance

46

Jerry Luftman’s experience combines the strengths of prac-

titioner, consultant, and academic. His proficiency in busi-

ness-IT alignment and IT trends, eighteen books, published

research, consulting, mentoring, and teaching/speaking en-

gagements exemplify Dr. Luftman’s expertise and leadership.

After a notable twenty-two year career with IBM, he had an

exemplary career for almost twenty years as Distinguished

Professor, Founder and Associate Dean of the Stevens

Institute of Technology Information Systems Programs; one

of the largest in the world. Driven by the strong demand for

a global executive education program focusing on manag-

ing information technology, Dr. Luftman has leveraged his

experience as a CIO, IT management consultant, and leading

academic, with his strong network prominent IT practitioners

and academics, to provide a valuable and innovative offering

via the Global Institute for IT Management.

Dr Luftman’s project experience ranges from senior manage-

ment issues through tactical implementation. Dr. Luftman

most recently pioneered the vehicle for assessing the maturity

of IT-business alignment; where he has a benchmark reposi-

tory of over one-third of the Global 1,000 companies. He also

serves on the Executive Board of several companies, associa-

tions, and publications.

Dr. Luftman’s last responsibility at IBM, after being a CIO, was

a key speaker at their Customer Executive Conference Center

in Palisades, N.Y. While responsible for management research,

he played a significant role in defining and introducing the IT

Strategy and Planning, and Business Process Re-engineering

practice methods for the IBM Management Consulting Group.

His framework for applying the strategic alignment model is

fundamental in helping clients understand, define, and scope

the appropriate strategic planning approach to pursue. Dr.

Luftman’s annual global IT trends research sponsored by

SIM,CIONET, and other CIO associations is recognized inter-

nationally as an industry barometer.

Barry Derksen’s career includes positions as research scien-

tist, management consulting, senior management, managing

director, director research, manager Architecture & Business

Processes and educator.

Dr.lec. Barry Derksen MSc MMC CISA CGEIT is associate

professor at the Vrije Universiteit in Amsterdam, professor at

Novi University of Applied Sciences, research director of the

Business & IT Trends Institute (bitti.nl). He worked as manager

on several organizations and programmes all related on real-

izing business value with IT. As management expert he advised

several large and medium organizations on IT investments

with evidence based research and consultancy (e.g. business

case development / six sigma / etc.).

Barry is speaker and teacher at several Dutch universities and

author of several books. The book ‘Trends in IT, invest in time

in the right technology’ is the bestseller with over 300,000

sold copies. Barry previously worked as senior manager within

KPMG Information Risk Management. With his company BITTI,

he and his colleagues focus on research benchmark, assess-

ment, audit and consultancy / project management. Barry is

also manager of Architecture & Business Processes at Stedin,

a Dutch energy supplier working on smart grids.

Barry’s work area is an expert on Alignment, IT Strategy, IT

Trends, strategic Information architecture, IT governance and

IT sourcing.

Appendix III: About the Authors

47

About CIONET

We are CIONET, the biggest community of IT executives

in Europe. Bringing together over 4200 CIOs, CTO’s and

IT directors from wide ranging sectors, cultures, aca-

demic backgrounds and generations, CIONET’s mem-

bership represents an impressive body of expertise in IT

management. CIONET’s mission is to feed and develop

that expertise by providing top-level IT executives with

the resources they need to realise their full potential.

CIONET develops, manages and moderates an integrat-

ed array of tools and services from the online CIONET

platform – the world’s first social network for CIOs –

to a range of offline networking events, conferences,

workshops and executive education programmes all

tailored to top-level management. CIONET also provides

exclusive access to the latest research through regular

online and offline publications and a number of value

adding partnerships with key players from the academic

and corporate worlds.

Faced with the rapidly changing role of today’s IT

executive, CIONET not only helps its members keep up

with the pace of change but empowers them to take

an active role in shaping the future of their field, always

challenging them with “What’s next.”

About GIIM

The objective of the Global Institute for IT Management

(GIIM) is to impart a complete, flexible, and immedi-

ately actionable set of best practices by an international

group of over 250 prominent academics, practitioners,

and management consultants, to prepare IT thought

leaders and business executives for the challenges and

opportunities that lie ahead. The institute provides a

comprehensive set of 32 IT management certificates,

with each frequently considered as being the single

most important educational experience in the attendees’

professional life.

The courses within the 32 respective certificates (130

courses) are delivered face-to-face (online is available)

in concert with affiliate IT management associations, in-

dividual company groups/cohorts, or universities (where

Masters Degrees can also be awarded). The learning

opportunities are in close proximity to the job, on a just-

in-time basis, and integrated into the clients broader

learning and development objectives. We partner with

our clients to deliver the right solutions to meet their

education objectives. See www.globaliim.com.

About BITTI

The Business & IT Trends Institute (BITTI.nl) is a bench-

mark, assessment, audit and consultancy organization

located in the Netherlands. IT’s goal is to be an added

value organization towards Business & IT questions

organizations have with the instruments benchmark,

assessment, audit and consultancy. These services are

delivered on a wide range such as alignment, (cyber)

security, value of IT and IT costs, governance and other.

dr. Barry Derksen (author of this report) is founder and

CEO of BITTI.

The world continues to experience profound chances. The economic conundrum endures. Overall, IT is becoming more strategic as organizations around the globe evolve from applying IT to reduce back-office expenses to leveraging it for innovative revenue generating initiatives. It is clear that the role of IT (and the CIO) is going through a transformation. Some suggest that IT is the business. The purpose of this 4th annual IT trends report produced by the authors for CIONET is to provide important insights on these changes, focusing on the European considerations. It is those organizations and individuals (IT and non-IT) that are prepared who will prosper.

Global GlobalEurope Europe

5 5MOST IMPORTANT IT MANAGEMENT CONCERNS

MOST INFLUENTIAL TECHNOLOGIES

3. Velocity of change in IT

4. Business Cost Reduction / Controls

5. Business Productivity

3. Business Cost Reduction / Controls

4. Business Productivity

5. Infrastructure Capability

1. Business & IT Alignment 1. Analytics / Business Intelligence

2. Business Agility 2. Application / Software development

3. Data Centre Infrastructure

4. Cloud Computing

5. Enterprise Resource Planning

2. Big Data

3. Customer Relationship Management

4. Cloud Computing

5. Bring Your Own Device