Over the next few weeks we invite you to join our CIO Dinner Party Blog Series as we delve into the various roles that work together to maximize the return on investment of software spend, be it on-premises or in the cloud. This week we set the stage for our host – the CIO.
CIO Magazine recently released its 16th annual State of the CIO report and as organizations evolve from transactional to transformational so must the CIO role. With this shift in business practices 87% of CIOs felt the role has become more challenging than in the past (down a percentage point from last year) as CIOs grapple with continuing to manage day to day IT tasks, such as vendor management and negotiations, but also must spearhead business innovation and technology strategy – such as moving certain pieces of the business to the cloud.
For CIOs just starting out on their journey you likely have more on your plate than ever before, but with this also comes increased visibility. Nearly half (46%) of CIOs now report into the CEO – the highest since 2004. At the same time CIOs are increasingly viewing themselves as strategic (31%) and transformational (50%), while those who deem themselves as functional has fallen to nearly 20%, from 27% last year.
Top priorities for all CIOs continue to be security, overall line of business needs, and, of course, software spend and budget. There is a lot at stake when it comes to understanding one’s software spend – and by a lot we mean the average company allocates approximately 5% of its revenue towards the IT budget, and software spend is typically around 20% of the IT budget. That means a manufacturer bringing in $2B in revenue is approaching an IT budget of $100M, with close to $20M being spent on software. Further – although the cloud is shifting this somewhat today – a majority of this budget (about 66%) is spent on operations, maintenance and support of existing applications and IT services. This does not leave much budget for growing and transforming the business.
As CIO how can you help move your organization forward – be it towards the cloud or other strategic initiatives – if your budget is tied up in the status quo? What if you could shift the committed operations budget to driving innovation?
This is where software portfolio management (SPM) – particularly SoftwareONE’s modern day approach to SPM – can help drive immediate results. SPM helps your organization procure, deploy and manage your software assets to reduce the overall total cost of ownership and maximize the return on software investments. Put simply, SPM can free up your valuable IT budget to drive innovation and create a competitive advantage.
To do this, you need a team. Every great host knows a dinner party is only as successful as its guests. Bringing together people from different backgrounds to keep the conversation flowing, interesting and exciting, as well as bringing new food to the table to sample and discuss makes for a great evening. As a CIO, you surround yourself with those “guests” that bring new ideas to the table when it comes to finding space in your software spend for innovative projects. These guests are typically the procurement officer, IT director, compliance officer, CFO and stakeholders from your lines of business. Everyone adds to the conversation and can help you determine new ways to accomplish and show results in a timely manner. Join us for our next dinner party as our guests arrive and bring their perspective and recommendations to the table on how to maximize the value of your software estate.
In the meantime, before our next dinner party, familiarize yourself with PyraCloud: A Modern Approach to Software Portfolio Management.