When asked how they were adjusting their innovation strategy to current economic conditions, 54 percent of the CIOs participating in StrategicCIO360’s July poll said they were staying the course and not implementing any cuts for the foreseeable future. In fact, nearly one quarter (24 percent) said they were increasing their technology spend to seize opportunities in this down market.
“Changing economic conditions are creating opportunities for new solutions,” said Stephen Alford, CIO at Worldwide Environmental, a mid-sized environmental consultant in Brea, California.
Alford says while his current priority as CIO/CISO is to futureproof the business, he is doubling down on the company’s technology investments, expecting to increase IT staffing, cyber investments and overall technology investments by more than 20 percent over the coming year.
And he’s far from alone. Three-quarters (73 percent) of the respondents said they were increasing tech-related investments through the next 12 months—and nearly half (47 percent) were adding to their IT headcount.
Laurent Comès, CIO at global investment manager VanEck, says he’s also looking for opportunities and increasing technology investments in anticipation of the recovery. “Markets and economics will stabilize or improve,” he said, noting many indicators are already positively trending.
While high (especially when compared to those reported by the CEOs our sister publication Chief Executive polled earlier this month), these numbers are well below where they were just two months ago, when we last polled CIOs about their plans for the year ahead.
For instance, the proportion of CIOs expecting to increase cyber investments over the coming months is down 21 percent since May 2002—and down 30 percent since its peak in October 2021. The same is true with IT staffing expectations: the proportion of IT chiefs planning to add to their team this year is down 14 percent since May and down 24 percent since October.
“We are still losing good employees faster than we can hire and train replacements,” said the CTO of an IT consultancy, echoing the sentiment of others in the industry.
Perhaps this is indicative of the pressing need for CIOs, according to the 121 U.S. CIOs and senior IT executives who participated in the survey conducted July 11-16, to futureproof the business. Overall, 26 percent of respondents said that was atop the agenda for the coming months, followed by creating or launching new products and services (19 percent) and improving data/insights quality (16 percent). Reducing costs only received 9 percent of the votes, tied with customer acquisition.
Interestingly, the CEOs polled earlier this month by sister site ChiefExecutive.net overwhelmingly said their focus was on customer retention amid the current economic challenges. Only 3 percent of CIOs participating in our poll concurred.
But CIOs are also more optimistic about the trajectory of the economy than their chief executives. Forty-one percent of them said they expect business conditions to have improved by this time next year, compared to only 14 percent of CEOs. Instead, 58 percent of chief executives forecast worsening conditions, vs. 31 percent of CIOs.
Our data shows CIOs tend to be more optimistic in general, perhaps due to the accelerated pace of digital adoption across companies since the pandemic. In a recent study we conducted in partnership with AWS, we found most companies have yet to transform into true data-driven enterprises, which is critical to the future of business. This may be fueling the optimism of tech executives.
“The growth that drove industry has not gone away,” said Anthony Esposito, VP of IT at Peoples Services Inc., a network of third-party logistics companies. “The markets continue to reflect non-business impacts; this is certainly the case in my business.”
“We believe that the mortgage Industry will recover substantially faster than many industries in the coming recession due to significant housing shortages in most markets,” said Russ Donnan, CIO for Certified Credit Reporting.
“I am in the mortgage lending business—interest rates, home prices and home availability, including new construction should be more favorable a year from now,” echoed Tom Knapp, CIO of Waterstone Mortgage.
“[There’s] continued need for insurance and financial solutions along with an underserved market,” said Richard Wiedenbeck, CTTO at Ameritas.
“The industry is compressed and if a recession hits, we are primed to be the leader in our service lines,” said MedHealth Partners CIO Paul Green to explain his forecast.
“I believe that if we’ve dipped into a recession, it will be shallow and not prolonged,” said Jeff Dirks, TrueBlue’s chief information & technology officer. “I also believe monetary management will lead to improved inflationary conditions.”