According to Deloitte’s first global survey for CIOs and equivalent IT leaders, most of the CIOs in Luxembourg stated that the worst of the IT budget cuts are behind them. This statement was also the case for most geographies and industries. The result this year confirms a positive trend, in contrast to what was observed over the last few years following the 2008 financial crisis, with most CIOs being forced to balance IT spending against decreasing IT budgets.

The survey analysis was completed through the insights from over 720 technology leaders from 36 countries globally, including about 40 responses from leading companies and organisations located in Luxembourg, across various industries.

IT budgets increasing

71% of the participating companies in Luxembourg have seen their budgets increase or stay the same compared to last year. Despite this positive trend of budget increases across all industries, 29% of respondents in Luxembourg reported a budget decrease compared to 22% globally, demonstrating a slower rise in Luxembourg than in other countries.

The Luxembourg survey results further indicate an almost even split in terms of how much of the IT budget is allocated to cover business-as-usual (BAU) activities (53%) versus supporting change (48%). This is an encouraging result for Luxembourg to reflect upon. In contrast, globally, 60% of IT budgets are deployed to BAU suggesting that local CIOs are investing more to transform their services.

Even more promising are the results from the financial services respondents in Luxembourg. These report a larger ‘change’ budget, most probably reflecting the restructuring that the industry is going through and the need to adjust their business models.

IT leaders need to become business partners

According to the results, interesting trends both in Luxembourg and globally regarding sourcing were identified: developing IT sourcing strategies and increasing offshoring are seen as very low priorities on most CIO’s agendas.

The survey, however, also indicates that, within their organisations, CIOs are not seen as strategic business partners yet. IT leaders are clear on the need to become a more effective business partner.
According to the responses from Luxembourg IT leaders, only 26% rate themselves as excellent business partners and 71% see themselves as fair business partners.

The lack of a dedicated business partnering function coupled with lack of business understanding of IT, changing IT priorities and resources and reduced business understanding within the IT organisation are the most frequently observed reasons for the ineffectiveness of business partnering.

Innovation - a key business development enabler for CIOs

There is a general perception among CIOs that IT could contribute more to the business in terms of innovation. Interestingly, despite believing that IT could play a significant role in driving business innovation, only a third of IT leaders (32%) believes that their function is seen as the hub of innovative development within their organisation.

Patrick Laurent, Partner and CIO Leader at Deloitte Luxembourg, further develops: “Over the past years, the role of our CIOs has clearly moved from a focus on technology expertise and operational management to business support functions or even in some cases to a business partner role. Organisations are not getting the best out of their IT leader, while expectations of the CIO are changing.”

The full report with all results of the survey is available on the Deloitte Luxembourg website at www.deloitte.com/lu/ciosurvey