CIO Crisis Alert: India Will Lead Asia Pacific IT Salary Increases In 2014

With a weakening economy, skyrocketing food prices, and an attrition rate of around 14%, Indian CIOs’ biggest worry is increasing the salaries of their IT staff. Data from Forrester’s Forrsights Budgets And Priorities Survey, Q4 2013, indicates that 71% of Indian CIOs will increase their spending on IT staff salaries and benefits in 2014 — tops in the Asia Pacific region (figure below).

                                                    

In return for the increase in staff salaries, Indian CIOs will face two challenges:

  • Increased pressure from CEOs to contribute to the company’s top line. By 2016, 70% of Indian CIOs will report to CEOs. As the boundary between IT and business blurs further, CEOs will get more directly involved in business-led technology discussions as a means to differentiate their organization and drive business growth. They’ll look for new technology capabilities to respond to customer needs better, faster, and cheaper — and won’t be satisfied with an IT organization that merely keeps the lights on.
  • The need to retool their IT teams. All too often, IT lacks business-oriented communication skills and team members rarely or never share business knowledge with each other. IT staff continue to be order-takers. The biggest challenge for CIOs today is how to make their technical people more business-savvy; this problem will only get more difficult as pressure from the business increases.

Indian CIOs need to lead a fundamental shift in their teams in order to be well-prepared for the future. In particular, they should:

  • Add a customer-obsessed business technology (BT) agenda to existing performance metrics. Forrester recently published a report on why it’s critical for CIOs to add a BT agenda — to win, serve, and retain customers — to their existing IT agenda. CIOs must alter their teams’ job descriptions and performance metrics to win in the age of the customer. And CIOs need to rethink their staffing: We believe that only 60% to 70% of IT staff will be able to adopt the BT agenda.
  • Create a BT budget to drive a customer-focused agenda. IT budgets meant for managing infrastructure and running operations are declining. But Forrester predicts that investment in BT technologies — such as customer experience software, mobility, customer analytics, and customer content management — will grow substantially in 2014 and beyond. CIOs need to ensure that their BT budgets are directly linked to performance metrics to deliver clear business outcomes for their organization.

2014 will be a boom or doom year for Indian CIOs. The price to pay for increased staff salaries is to clearly demonstrate how they help drive their organization’s BT agenda. Indian CIOs who are slow to adopt this agenda will find their CEOs giving the BT mission to other business leaders in the organization. CIOs stuck with a traditional IT agenda will find themselves left behind.