Global Chief Information Officer Study by IBM Spotlights Budget Concerns, Service Delivery

CIOs should also focus on better data governance, IT investment.

by / February 10, 2010

"It's a new world." Or, "we're in a new normal." These are increasingly common phrases, but certainly palpable in the wake of the financial crisis, which is now a global economic slowdown. What's clear is that the nature of change has not only become more complex and intertwined -- it has accelerated. But it's more than the events of the past year; the world has been rapidly evolving, with cultural and demographic shifts and technological advances that have raised expectations for creating value.

Many governments around the world are in the middle of this and are facing more complex decisions and tremendous transformation and service delivery challenges. Information, communications and technology are crucial to both. And with heightened expectations for greater visibility, transparency and accountability, the stakes are high.

Public CIOs are at a critical stage in the evolution of their role. On one hand, they've never been more central to governments' plans to modernize and transform. There's growing recognition by politicians and public-sector leaders that better use of information, communications and technology is central to making it happen.

On the other hand, it's unclear if government CIOs have the full confidence of citizens or their management colleagues to deliver on these heightened expectations. Politicians and colleagues don't always appreciate the complexity of driving IT change through complex public organizations. Government IT projects that fail to deliver or suffer cost overruns are highlighted in the press. Public CIOs fear budget cuts at a time when investment in information, communications and technology is needed most to deliver efficiencies across the public sector while accelerating progress toward desired program and mission results.

In short, with IT increasingly recognized as government's "central nervous system," CIOs have an opportunity to establish themselves at the heart of government. But they must choose to do so, while delivering quickly and well to program/mission colleagues and partners -- or they face the prospect of budget cuts and a downward spiral, struggling to meet demands for basic services.

IBM carried out a comprehensive global survey of the CIO's role, conducting face-to-face interviews with 287 government CIOs from 48 countries, as part of a cross-industry survey of more than 2,500 CIOs. Sixty-one of those government CIOs were from the U.S., cutting across federal, state and local jurisdictions. This article focuses on the findings for government CIOs in the U.S. The survey identified the key goals for CIOs and their organizations in the years ahead; the roles that CIOs will need to fulfill to achieve them; what many government CIOs are doing to adapt to these roles compared with their private-sector counterparts; and a point of view on what this might mean for government CIOs in the future.

Government CIOs must deliver on three key goals:

1. Making innovation real. Achieving this goal is more likely when mission and public outcomes are aligned. CIOs will need to work with program and mission areas to apply information and technology in innovative ways that address complex public challenges and deliver results.

2. Improving the value on IT investment. Government CIOs will need to enable better use of information for decision-making, communicating more effectively and delivering results, while increasing efficiency.

3. Expanding the impact of IT on programs and missions beyond the IT function, so that a professional IT function is working with colleagues on programs that not only transform the agency, but also government as a whole.

The survey found some encouraging results. Government CIOs reported that they are actively represented at senior management levels in developing and presenting strategy. This was even higher at state and local government levels, perhaps because they are closer to the delivery of services to citizens. They also reported a strong interest in innovative technologies, such as virtualization, mobility solutions and collaborative solutions, and were keen to drive innovation across the organization. In all these areas, the results for government CIOs were noticeably higher than their private-sector counterparts. It may be that government has lagged behind the private sector in this area and what we might be seeing is an acceleration of government's own IT revolution in light of the "new normal."

However, the survey also points to areas where government CIOs must improve their performance. Above all, they need to turn their visionary plans into capabilities that help their agencies deliver results, accelerate progress toward public outcomes and improve financial performance for the public sector -- closing the gap between the expectations of politicians and citizens, the aspirations of CIOs, and actual results. For all government organizations, there's a long way to go before the potential of IT is realized. To achieve this, CIOs need to:

1. Expand their impact at senior levels, so they can secure the resources needed for the right IT investments with the right commitments from senior management to sponsor joint action that will speed up implementation. While CIOs report that they are invited to participate in setting strategy, it's not clear to what degree they influence the business agenda.
2. Tackle public-sector barriers to change. Many CIOs expressed interest in innovative solutions, but referred to difficulties implementing them in government. They must identify these constraints, help their program/policy colleagues and public officials better understand them, and work with them and external partners in challenging and overcoming barriers. CIOs also will need to consider radical approaches and innovative solutions, including new business and operating models. The private sector has been more active here: 54 percent of private-sector CIOs see business model changes as one of their greatest challenges, compared with only 38 percent in the federal government. However, that figure rose to 50 percent in state and local government. Government CIOs must challenge why they cannot implement these changes in their organizations.
3. Get the basics right. In particular, they need to make the appropriate data readily available and useful while ensuring that it's reliable and secure (e.g., through effective data governance). Only 24 percent of federal CIOs reported that they had a strong and effective data governance model in place, and 26 percent of state and local CIOs said the same. Many CIOs reported that they were overwhelmed with the routine demands of delivering an IT service. Only by improving the efficient delivery and productivity of these services (e.g., through standardization or centralization) can time be freed up for CIOs to spend on the more strategic elements of the role.
4. Demonstrate how they can deliver improved public value and contribute meaningfully to outcomes through better use of information. There are many excellent examples where government organizations have delivered services using new channels or increased transparency by sharing information with citizens. And CIOs are enthusiastic about innovating in government. But there's much progress still to be made. CIOs will need to overcome public-sector culture and processes that often focus on lowest cost rather than best value in public procurements. It's also particularly difficult to get support for projects where value is created across organizational (and budgetary) boundaries. The key ingredient for both scenarios: outcomes, especially as CIOs make design choices that optimize value and cost.
5. Learn from and work with private-sector colleagues on how to increase the visibility and accountability for IT costs. Despite pressures on IT spending and budgets, government CIOs aren't measured by their colleagues on cost-effectiveness as much as their private-sector counterparts are (only 19 percent of federal government CIOs and 33 percent of state and local CIOs mentioned cost-effectiveness as among the top three performance criteria versus 44 percent in the private sector). Government CIOs must more effectively plan and manage IT in year and in life cycle, which will widen understanding of and accountability for IT costs, and drive efficiencies.
6. Build an IT department with the skills needed for the future. This includes technical skills in IT, but also expertise in key areas like innovation, program management, project delivery and an intelligent customer relationship function to optimize value from external partners.

The study focuses on the opportunities and challenges facing the government CIO. But there are important messages too for senior public-sector managers and public officials. Program and business managers need to actively drive what's needed from information and technology. To do so, they need an appreciation of what IT can deliver.

Too many managers and officials still perceive IT narrowly as an overhead -- as a "provider of core technology services" -- rather than a creator of value (43 percent in federal government and 40 percent in state and local government). Hence, CIOs also said the top performance criteria for IT was "project execution" -- ranking above aligning business and IT, budget control and cost-effectiveness. But what was also encouraging was that, similar to the private sector, 22 percent of government CIOs in all jurisdictions said program areas also are seeing IT as a critical enabler of the mission and business vision. Colleagues across the organization need to help CIOs address the constraints that too often hinder the realization of IT's potential value to government and the citizenry. Public officials can help address structural issues through the legislative and budget processes.

CIOs have an excellent opportunity to propel the transformation needed and expected of government. Above all, program, mission and business colleagues, public officials, CIOs, and the IT community must develop more productive and constructive working relationships -- working together to understand and ultimately overcome the constraints that historically held back the rapid implementation and application of IT that's now expected. Indeed, flexibility and collaboration are key to accelerating progress and getting things done. With the "new normal" upon us all, the time to act is now.

The complete CIO study can be found at


Lynn Reyes Contributing Writer
Lynn Reyes is a senior managing consultant in IBM's Institute for Business Value. She has more than 10 years of experience in industry and as a strategy and change consultant.