The role of the chief information officer (CIO) has evolved over the last several years. In the 1990s and early 2000s, CIOs were largely tasked with overseeing core information technologies and on-premises networks. Today, CIOs often run diverse, hybrid technology infrastructures and make decisions that go beyond technology into areas like corporate strategy, sustainability, finance, innovation, operations, sales, marketing and human resources/talent management.
To succeed, CIOs need to be versatile and vigilant. In addition to ensuring their current technology stack is secure and performant, CIOs must be on the lookout for innovative ways to leverage emerging technologies to increase business productivity and performance. None of this is easy. A global study conducted by Lenovo (opens in a new tab) found 82% of global CIOs say the role has become more challenging compared with only two years ago.
This article examines the top 11 challenges CIO will likely face in 2023 and explores solutions that can help them manage some of these diverse and complex challenges.
11 CIO Challenges to Know in 2023 and Beyond
1. Cybersecurity
As companies digitise more business processes, their attack surfaces expand. Cyber criminals have more potential inroads to a company, today, than ever before. In recent years we’ve seen ransomware disrupt operations and bring businesses to a halt, including attacks on critical infrastructure like hospitals and energy pipelines. Given the proliferation of nation states and cyber armies dedicated to penetrating any weak spot in a business’s infrastructure, a cyberattack on any CIO’s business becomes an issue of when, not if.
It makes sense, then, that cybersecurity consistently ranks as one of the top CIO challenges and that it will continue to be a major threat in 2023. However, there’s also often been a disconnect between the ranking of cybersecurity as a priority and corporate investment in cyber defence — surveyed security professionals consistently report that their efforts are underfunded by 10% to 20%. But that may be about to change. An annual CIO survey (opens in a new tab) from Gartner in November 2022 found that 66% of respondents said they planned to increase investment in cybersecurity in 2023, making it the top investment priority for CIOs going into the new year. Overall, Gartner forecasts that worldwide information security and risk-management spending will reach $188.3 billion in 2023, up more than 11% from the current year.
Solution: Given the current cyber threat landscape, CIOs need to make cybersecurity a top investment in 2023, both financially and strategically. That means ensuring the software and systems they invest in have a strong security posture and are backed by a long-term player in the technology industry. The products and solutions they deploy should use both application and operational security strategies to block unauthorised network and service connections and create multiple layers of protection for the business. They should include encryption, role-based access controls, multifactor user authentication and token-based application authentication. In addition, round-the-clock monitoring and a dedicated and tenured security team — backed by advanced tools, controls and policies — can help ensure the strongest operational data centre security. Seek cloud systems that are externally audited to meet standards such as SOC 1 and SOC 2 Type 2 and that maintain ISO 27001 and 27018, PCI DSS and PA-DSS compliance. Finally, ensure cloud providers employ constant monitoring and are staffed by a dedicated, expert security team that maintains an uncompromising stance and best practices around governance, risk and compliance.
2. Resilience
For CIOs, the term “resilience” traditionally referred to uptime — making sure systems were highly available and any downtime was addressed quickly and effectively. But recent years have shown that CIOs must be prepared for sudden, broader change, too. When the COVID-19 pandemic struck in early 2020, CIOs had to support employees moving to remote work en masse and help the organisation reimagine its business models. So, the definition of resiliency changed: Resiliency now means handling business disruption without business interruption. CIOs must always be prepared for the next pandemic, natural disaster, or other major disruption while also ensuring operational flexibility.
Solution: In many cases, the answer to improved resiliency lies in the cloud. While some CIOs feel data is safer on-premises, most on-premises systems use two geographically close physical servers that failover to one another. That risks catastrophic data loss in the case of hardware or software failure or a natural disaster, fire or break-in. Cloud-based systems provide operational resilience because data is replicated, backed up, distributed across geographic regions (as data residency regulations allow) and available whenever and wherever it’s needed. Multiple levels of redundancy are provided to ensure continuous access to data, and replication and synchronisation across data centres provide CIOs with disaster recovery confidence. Established cloud providers protect availability through virtualisation. When servers are virtualised with redundant instances in multiple data centres, providers can rapidly migrate from one data centre to another if a failure occurs. Cloud providers typically locate redundant data centres in different geographic areas, far from each other. Therefore, should a natural disaster occur in one area, customer data will still be available via another location.
3. Automation
Productivity challenges, hybrid work, increasing customer demands and new forms of competition are driving organisations to seek automation-first strategies. CIOs are challenged to increase business process automation — the ongoing process of using software to automate manual workflows — throughout their organisations. Further, there is a “better productivity through automation” challenge that is growing more acute as workforces shrink. Consider, for example, the slow growth of workforces in Australia and Japan. In Australia, the annual increase in the working age population over the past 60 years has hovered around only 150,000, and it is expected to decline to about 100,000 from 2020 onwards as baby boomers retire faster than millennials enter the workforce, according to United Nations Population Division data. In Japan, the working population has been in decline since 1995. Even in the U.S., the number of workers fell 400,000 between March and August 2022, according to U.S. Labor Department data.
Solution: CIOs must help their organisations automate business processes. Automating business processes saves time and money, helps reduce the amount of manpower it takes to complete key tasks, and allows workers to focus on more important projects. There are many areas where automation has the potential to generate improvements across many aspects of business. For instance, when a company automates accounts receivable processes or customer service chat rooms online, paid labour can centre its efforts on more critical, business-building tasks. Automation can also help reduce costly errors and the time it takes to correct them.
BPA, where technologies like virtual agents or cognitive engines built into software take over routine tasks, can make companies more efficient and agile. According to a report (opens in a new tab) based on interviews with enterprise CIOs in Europe, the most common automation tools currently in use include robotic process automation (RPA), AI, and low-code and no-code tools.
4. Customer Experience (CX)
The customer should always be a top priority for any business leader, and the CIO is no exception, especially as companies increasingly make customer experience a differentiating competitive advantage. The customer should be at the heart of everything a CIO does. Not only can that lead to more customers and improved loyalty, it can also separate digital leaders from followers. According to a survey report from digital consultancy SPR (opens in a new tab), 59% of IT organisations identified as “leaders” said they were extremely effective at responding to customer needs compared with only 37% of the “laggards”.
Solution: For most CIOs, improving the customer journey means figuring out what technologies help their organisations better serve customers. Technology that reduces friction, including things like centralising the customer management system and self-service, can go a long way towards improving the customer journey. Business to business (B2B) companies are turning to self-service features like online account portals to cut down on routine tasks that plague business buyers, such as contacting their sales representative to reorder or check order statuses. CIOs should look for customer account portal solutions that provide access to billing, order and subscription data, and lets customers channel requests directly to sales and service teams, which can help reduce costs and improve customer satisfaction.
5. Inflation
Inflation has been a significant factor for the last 18 months. According to the International Monetary Fund, global inflation went from 4.7%in 2021 to 8.8% in 2022 — the highest it’s been in 40 years. That puts significant strain on CIOs looking to invest in new technologies. Inflation is also making it more difficult for CIOs to obtain the labour they need. According to Gartner research (opens in a new tab), a combination of sustained economic growth, a dwindling labour pool, and pandemic-induced shortages are contributing to significant increases in labour costs.
Solution: Technology can be a strategic tool for dealing with inflation by helping organisations reduce costs and streamline processes. When viewed in that light, CIOs can be seen as key to enabling a business to run more effectively and efficiently. Be on the lookout for technologies that can help the business automate tasks or work more efficiently. For businesses that are still on-premises, moving to subscription-based SaaS software models can often eliminate expenses, like hardware refreshes, while easing access to new technologies that may offer additional opportunities to streamline processes. Similarly, moving from an on-premises data centre to the cloud can help shift spending from CapEx to OpEx and reduce infrastructure costs, or at least make them variable so that they rise and fall in concert with business cycles. For companies that are already using SaaS-based solutions, taking a close look at utilisation might provide an opportunity to optimise or reduce costs.
6. Hiring
Finding and retaining talent has been called (opens in a new tab) a key challenge that cuts across all CIOs. Several large IT companies laid off significant numbers of employees in 2022, so it’s possible this challenge will become less daunting once the market has had a chance to self-level. But it’s more likely CIOs will continue to struggle to fill all the key roles they need in 2023. In a McKinsey survey (opens in a new tab) of 1,216 senior executives globally, two-thirds of respondents said their companies are not adequately prepared to address the workforce disruptions they are anticipating. And a separate McKinsey survey found that (opens in a new tab) 61% of responding HR professionals believe hiring developers will be their biggest challenge in the years ahead.
Solution: CIOs should think about their organisation’s value proposition from the employee’s point of view. What incentives — beyond typical salary and time off benefits — will interest an IT employee in working for a company? This could include a training or mentorship program. And it should definitely include a well-defined career path with documented, specific skills that IT employees need to acquire to reach each higher rung on the IT career ladder. Employees who don’t see such a clear path to advancement can become demotivated and disengaged. CIOs should also ensure the technology they are using — or plan to use in the future — is of interest to an engineer or data scientist. A company that uses legacy on-premises systems is likely of less interest to a job candidate than a company that employs cloud-based systems and leading-edge technologies like AI and ML.
Part of the solution may lie in HR and the CIO working more closely together to define that clear career path for employees and to describe tech roles that are more exciting and/or creative than the thousands of tech roles currently posted on job sites. Doing so requires imagination — and the organisation’s ability to follow through on those promises. Otherwise, you risk losing hard-won new employees.
7. Hybrid Workforce
The challenge is that a hybrid workforce is harder to support than an in-office workforce — or a fully remote workforce. But, as we enter the third post-pandemic year, some organisations have begun requiring more employees to return to the office, often with mixed reactions. While some employees are happy to leave the confines of home and return to a more interactive workplace, others prefer to remain at home and, if pushed, are willing to leave their jobs instead. For CIOs, that means figuring out a balance that works for everyone. CIOs must consider technologies that enable employees to work from anywhere and that promote collaboration without risking corporate security or degrading the employee experience.
Solution: The cloud is certainly key to enabling employees to work from anywhere. It’s also key to enabling things like AI and automation that can augment a hybrid work model. For example, AI can improve remote work environments by offering support for key areas such as communications, workflow management, security and collaboration. But perhaps the most important thing is to have a hybrid workforce strategy in place. A hybrid workplace strategy should consider employee relationships, clearly define policies, and ensure teams can be securely connected whether employees are at home or in the office. For example, workplace activities that include remote employees can help them stay connected and feel part of the team. Consider things like contests or casual get-togethers that can include both remote and in-person employees.
8. Cloud Migration
Cloud adoption continues to gain momentum worldwide. According to one research house, global spending on cloud services is expected to roughly double (opens in a new tab) from USD $546 billion in 2022 to USD $1.2 trillion in 2027. With enhanced scalability and improved availability and redundancy, cloud provides businesses the flexibility they need to respond to market changes and customer demands quickly, contributing to enhanced performance and innovation — and, potentially, leading to faster revenue growth.
Solution: CIOs should develop a cloud migration strategy that enables them to spend less time managing multiple systems and more time driving innovation and growth for the company. Look for a cloud-based system that centralises information and automates processes in every part of the organisation. Use a unified data model and robust business analytics to unlock more confident decision-making. And incorporate role-based access controls that will protect company data while giving each user a tailored view into the metrics that matter to them. Finally, look for a cloud solution that enables rapid deployment so the business can take advantage of cloud benefits faster. CIOs should approach cloud migration with a focus on simplifying IT operations, enabling the organisation to gain agility and foster innovation, and delivering efficiency companywide.
#1 Cloud ERP
Software
9. Skills Gap
Qualified talent is in short supply at many organisations. At the same time, the number of skills required for any job is increasing by 10% each year, according to Gartner (opens in a new tab). To fill these gaps, employers should invest in upskilling through on-the-job training. Upskilling can be a cost-effective way to manage the talent crunch. It can also be a powerful employee retention tool. A recent NetSuite survey (opens in a new tab) found 43% of employees said management should add or improve in-house training opportunities.
Solution: First, a CIO can assess their IT department’s skills gap. Then, he or she can work with HR to define a program aimed at helping employees develop the skills they’ll need for current and future roles. There are a lot of cost-effective options to help upskill employees today, from formal university programs to online education and peer mentoring. Whichever upskilling route CIOs take, they should also give employees opportunities to put their new skills to the test and experience using that knowledge to further their own and the company’s goals.
10. Organisational Culture
As management guru Peter Drucker once said, “Culture eats strategy for breakfast”. An organisation's culture affects business performance, customer experience and talent engagement. In fact, a Grant Thornton study called the “Return on Culture Report” found that executives who classify their culture as “extremely healthy” are 1.5 times more likely to report average revenue growth of more than 15% for the past three years. But organisational culture isn’t just a challenge for HR; CIOs are also challenged to lead workplace culture. Gartner suggests (opens in a new tab) CIOs ensure that their departmental practices, processes and tools align with organisational values. “Changing how organisations operate has a much greater positive impact on aligning the workforce to the organisation’s desired culture”, Suzanne Adnams, a Gartner managing vice president/analyst, was quoted saying in the linked-to Gartner article. “Any behaviour, habit or routine will continue to persist as long as there is something in the environment that rewards and reinforces that continued action”.
Solution: CIOs that seek to transform their organisational culture should first work to understand how values, mindsets and practices intersect with each other within their immediate group and within the overall organisation. Then, they can work to put a plan in place to better align practices with cultural values, and appoint team members to help lead the effort. Ultimately, the goal is to identify, model and encourage behaviours that contribute positively to the achievement of business goals. Most importantly, remain flexible and patient. Transforming organisational culture takes time and is no easy task.
11. Governance
IT governance is a way to improve IT management so that business risks from IT activities are minimised and the value that returns from the organisation’s IT investments is maximised. Good IT governance also ensures that IT activities align with organisational business strategy. Poor IT governance can risk a company's reputation and even its ability to conduct business, so this is a serious challenge for CIOs. IT governance includes compliance requirements, which must be given careful consideration as companies move to the cloud. CIOs need cloud-based solutions with features to secure sensitive data, including credit card and personally identifiable information. In addition to compliance concerns, CIOs should look for solutions that include user access management controls, improve auditability by setting up customised workflows to process and enforce approvals, and provide regular security and vulnerability scans.
Solution: Select software solutions that include governance, risk and compliance capabilities that are built in to the solution. Such capabilities should be designed to handle increasingly complex regulatory, operational and compliance challenges, help CIOs to establish the right controls to meet organisational risk objectives, and then monitor and report on the effectiveness of those controls. Governance solutions should also be scalable to handle increasingly complex compliance challenges as a company grows. Finally, automation of such processes can allow for greater efficiency, reduce risk and enhance the CIO’s ability to track changes.
Face Challenges Head on with NetSuite
NetSuite's cloud-based enterprise resource planning (ERP) solution can help CIOs address many of the challenges they’ll face in 2023. NetSuite’s ERP is delivered on a SaaS platform, allowing CIOs to take advantage of the latest technology, efficiencies and innovations, while saving time and money by eliminating the burden of maintenance and hosting — and ensuring seamless upgrades. NetSuite software can automate accounting, manufacturing, supply chain management, project management, customer relations, ecommerce and many other aspects of company operations by integrating business processes so that one triggers another, within and across departments.
When it comes to security, NetSuite is externally audited to meet SOC 1 and SOC 2 Type 2 standards and maintains ISO 27001 and 27018, PCI DSS and PA-DSS compliance. NetSuite employs constant monitoring and is staffed by an expert security team that maintains an uncompromising stance and best practices around governance, risk and compliance.
With an investment in NetSuite, CIOs spend less time managing multiple systems and more time driving innovation and growth for their companies.
Today’s CIOs face many diverse challenges. Those challenges likely won’t get any easier in 2023. To achieve their goals in the coming year, CIOs need to be versatile and vigilant and find innovative ways to leverage emerging technologies that can help increase business productivity and performance while reducing costs. The right technology can help achieve those goals.
CIO Challenges FAQ
What is the biggest challenge facing the IT industry?
Cybersecurity consistently ranks among the top IT industry challenges and is expected to remain a major threat in 2023 and beyond.
What are some of the challenges that CIOs and HIT departments must address in order to be successful in the future?
Some of the biggest challenges CIOs and Health Information Technology (HIT) departments must address today include security, managing customer (and patient) experiences, keeping up with changing governance, compliance and risk requirements, securely migrating workloads to the cloud and automating more business processes.
What are the challenges faced by IT managers?
Among the top challenges for IT managers are cybersecurity risks and the growing difficulty of hiring IT professionals skilled in the rapidly changing requirements demanded by continuously advancing information technologies. They’re also challenged to develop ways to maintain system availability in the face of increasing disruptions, supporting the tech needs of hybrid (i.e., in-office and remote) workforces and managing costs in the face of inflationary pricing trends.
