What’s on the Mind of CIOs for 2023?

Without question, 2023 will be a challenging year for CIOs and the enterprises that they support. Agility will be critical as the impact of economic tailwinds become clearer. CIOs will likely need to be able to do some trimming but also not slow down high-priority initiatives focused upon transformation or building a data-centric business.

With this said, how are CIOs reading the tea leaves for 2023 and what choices do they expect to make?

Biggest Challenges to IT Strategic Plan

Market analyst Dion Hinchcliffe says from his research the biggest challenges for the 2023 plan will be the following:

• Uncertain operating conditions including the economy, supply chain and talent.
• IT budget hedging and cloud costs.
• How big to go on disruptive strategic technology including AI.
• Cybersecurity and ransomware level of focus.
• Environmental, social and governance.

Given this, it comes as no surprise that former Verizon CIO Ben Haines says, “CIOs have to know which levers to pull should cost cutting need to occur.” Ed Featherston, Enterprise Architect for Thermo Fischer adds, “cost cutting/control/minimize spend will be the theme across most businesses due to inflationary concerns.” As well, he fears, “there will be strong push for tactical vs strategic spending.”

Former Iron Mountain CIO Ken LeBlanc, however, says, “I would not refer to it as cost cutting, rather tightening and a focus on non-discretionary and truly differentiating expenditures. Those that cut mindlessly will come out the other end weaker.”

Without question, there continues to be uncertainty about how 2023 will pan out. New Zealand CIO Anthony McMahon, for example, believes “it will go the way of 2020, 2021 and 2022, all evolved.” Martin Davis agrees and says, “it depends on whether you believe there will be a recession, many of the economic indicators in the US still disagree. I think the normal rules still apply. So how do we make best use of the budget available to support strategic initiatives and add value to the business.”

And as CIOs have become increasingly focused upon business models and corporate value propositions, it is uncertain how spending can be easily eliminated. Miami University CIO David Seidl says, “for me, it is the backlog of strategic work from the height of the pandemic. There is so much that needs done. At the same time, we are continuing to fight a tough IT labor market, supply chain bumps, and of course the potential for recession combined with inflation making budgeting and planning challenging.”

So, in planning Capgemini Executive Steve Jones says CIOs should align to the business strategic plan and show how IT is relevant to the plan. All too often IT’s strategic plan isn’t strategic, it’s what IT wants to do.” Michigan State University CIO Melissa Woo agrees and says, “the discussion should not be about cost-cutting but instead about prioritizing where to apply resources and reallocating resources to higher value activities.”

Related Article: Why — and How — CIOs Support Customer Experience Programs

In Recession, How Should the 2023 Plan Change?

Seidl is clearly right when he suggests, “everything depends on the depth of the recession. We may need to adjust timelines for some efforts or pause them, but others will continue because the cost of not doing them in a timely way exceeds the savings from pausing them due to financial changes.” Davis is correct in saying, “there will be an increased focus on short term value and efficiency.” With this said, Hinchcliffe suggests that top priorities will not change much, except even more advanced automation.” What he believes gets reduced is “work on employee experience, lower priority SaaS subscriptions, duplication, overprovisioning cloud/licenses, and device upgrades.”

Featherston, however, worries about “businesses that knee jerk reactions and go fully tactical. Those that do not do this, will come out better in the end.” There is impressive supporting research that says that organizations that do this do worse in a recession and come out weaker afterwards. Seidl says that he has seen organizations do the opposite, set the stage for really impressive gains on the way back out of the recession. And this matters, says Featherston, because in a rapidly evolving technology landscape, losing six months’ time can leave you in the stone age quickly.

Hinchcliffe agrees and says, “the challenge is that as digital business and economy are becoming a larger share of revenue. Bezos and the seven years to exit average of technology unicorns have proven it must be a long-term strategy. Or do not play.” But at the end of the day, Jones says, “if the business strategic plan changes, IT needs to pivot. If you do not already have pivots points built into your 2023 plans, then you are baking in failure. The IT plan has to adapt to the business reality. There is no other way.”

Dealing With a Changing Economic Climate

CIOs are clear they are planning for a changed economic climate in 2023. Financial Services CIO Dennis Klemenz says, “an obvious revisit of budget and usage. IT budgets can have a lot of bloat without business impact. Better to cut those than cut people but so many businesses go after people first.” Similarly, Grand Valley State CIO Miloš Topić says, CIOs should “focus on talent, clear priorities, unified commitment, courageous leadership, playing the long game.”

McMahon says, “CIOs should focus upon initiatives which make the organization more effective, reduce costs and grow revenue. Anything that removes high-volume-low-value-work from expensive resources allowing them to focus on high value activity is a good starting point.”

Meanwhile, Arts and Wellness CIO Paige Francis says in the mix of this it is important to focus on people — not just yours if you are a communicative, empathetic leader. You should spread the care everywhere.” And learned from managing through COVID-19, Francis says, “help where can you add value without carrying everything.”