Finance

IT spending increases signal a new view of the CIO

‘CEOs are now having CIOs be direct reports. You see CIOs moving into operations more. Some CIOs are becoming CEOs,’ said one CIO.
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· 3 min read

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When Signature Healthcare migrated its electronic medical records (EMR) into the cloud, Nick Szymanski was around to translate.

“It was my job to be able to communicate to the rest of leadership and the organization why that’s a big deal, how much of a lift there was, and how good it went,” said Szymanski, CIO and VP at the Massachusetts-based medical group and hospital.

With major implementations like an EMR overhaul, Szymanski is quite literally in the room with execs, and he senses a change in how IT pros are being viewed. “CEOs are now having CIOs be direct reports. You see CIOs moving into operations more. Some CIOs are becoming CEOs,” Szymanski told IT Brew.

As IT pulls up a chair, recent reports show an uptick in tech spending—another signal that the CIO has established itself as a critical leader in business decision-making.

The data. In the same month that a Gartner survey found IT to be last on the cut-list, a report from Avasant Research surveyed 225 companies—all with at least $1M of IT operational spending:

  • About 80% of companies plan to increase their IT budgets this year.
  • Budgets are poised to rise by 5% at the median, “an increase we have never seen in the cloud era, where typically, budget increases were restrained by the improved efficiency of the cloud,” read the report.
  • 60% of organizations plan to increase IT headcount.

The drivers:

  • Covid. IT teams had to set up newly remote workers with the right hardware, from new monitors to VPNs. “IT used to be perceived as a cost center, and it’s now perceived as an area where you can get strategic growth and actually increase top-line revenue,” said David Wagner, senior research director at Avasant's Computer Economics research group.
  • Digital business. Online retailers require e-commerce systems. Healthcare facilities call for patient medical records systems, wearables, and other clinical data systems. “You can’t grow your business without the intelligence that comes from data and analytics,” said Dan Priest, cloud and digital leader at PwC.
  • Cloud. Cloud infrastructure has increased from an average of 2.3% of the total IT operational budget last year to 5.7% in 2022.

No matter the economic outlook, IT has a critical value proposition to growing the business or making it more profitable, according to Dan Priest, cloud and digital leader at PwC.

“CIOs and CIO teams are really coming into their own. They’re a prominent member of the C-suite. They’re an important part of the success of any business. And increased spending is a signal that that’s happening,” Priest told IT Brew.

Szymanski, after all, is CIO and senior VP—a sign perhaps that the role of CIO is gaining more prominence.

CIOs are getting more support from their business than ever before, according to Wagner, but also more pressure:

“Because, now, they’re really being asked to deliver.”—BH

Do you work in IT or have information about your IT department you want to share? Email [email protected] or DM @BillyHurls on Twitter.

Top insights for IT pros

From cybersecurity and big data to software development and gaming, IT Brew delivers the latest news and analysis of trends shaping the IT industry, like only The Brew can.