Boardroom ignorance curbs tech goals

With organisations extremely reliant on technology for almost all of their business processes and a majority of companies progressing digital transformation strategies, IT leaders should have little difficulty securing the ear of the board when required. It is surprising then that a new survey of more than 200 European IT decision makers finds that a lack of boardroom influence is seriously threatening digital innovation.

Confessions of a CIO, commissioned by Excelian Luxoft Financial Services, reveals that the vast majority (86 per cent) of respondents have recently championed a major digital project that failed because it did not get past the boardroom. IT executives believe misconceptions about technology by executives are partly to blame for these failures with four-fifths (78 per cent) agreeing that senior executives do not understand technology. And a similar number are frustrated by unrealistic demands to innovate with new technologies while also having to cut costs.

It seems that IT executives in UK financial services firms are particularly frustrated by their senior colleagues who are seemingly unable to “grasp” new technologies with 85 per cent of respondents in the UK saying that senior executives do not understand technology well enough. This compares to three-quarters (76 per cent) in Germany and three-quarters in Austria. One fifth (22 per cent) go as far as saying that lack of support from senior executives keeps them awake at night.

As a result, Roman Trakhtenberg, group managing director and global head of Excelian Luxoft Financial Services, reckons tensions in IT departments are reaching “boiling point”. “Technologists in finance want to be the gateway to innovation but right now they are unable to influence decisions at the top,” he says. “Instead, IT professionals in finance are stuck dealing with internal legacy systems and imminent cyber-risks, and are not getting the support they need to implement real change.”

CIOs from the sector also bemoan the lack of investment even though the report shows that top executives want their companies to innovate with new technology and most understand its importance to the business.

There is no doubt that disconnected thinking like this will be hugely damaging to organisations which are trying to keep pace in the technological evolution and this digital traction failure in financial services should serve as a stark warning to leadership teams from other sectors wishing to innovate with technology but who are not prepared to invest in it. The survey also indicated that mounting pressures on IT departments, including cost-saving initiatives introduced since the 2008 financial crash, means IT leaders have lost the ability to innovate.

While IT executives are uncertain about how to encourage greater innovation, two-fifths (41 per cent) are at least perceptive enough to be aware there needs to be cultural change in their businesses if digital innovation is to be embraced. As culture change champions, we at Rialto acknowledge the IT leaders for this call to action and are minded to suggest that their outlook makes them a step ahead of top tier colleagues.

IT has been democratised by the cloud and business models such as software-as-a-service have made it easier, faster and cheaper to deploy. Employees now use much of the same technology at work as they do in their homes. There are also far less overheads and resource required to put in place IT infrastructure than previously. Granted, increasing reliance on technology means budget is required for IT security and system failure but it should be recognised as core to business continuity and arguably not necessarily be a cost siloed to IT.

The factors above underline that IT has evolved to the stage where it is embedded in our daily working lives and a culture change regarding its use has been building for several years among the workforce. But this evidence suggests it has still to reach the top tier. If so, it is time for leaders to step back and reflect on the fact that lack of investment in IT could be one of the biggest false economies they make.

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