2015 IT Trends Comprehensive Report PDF

This research made possible through the generous support of:
Price $500.00 (free download for SIM members)

Comprehensive Report: 2015 SIM IT Trends Study
Issues, Investments, Concerns, and Practices of Organizations and Their IT

Executives: Results and Observations from the 2015 SIM IT Trends Study
Leon Kappelman, University of North Texas Ephraim McLean, Georgia State University
Vess Johnson, University of the Incarnate Word Natalie Gerhart, University of North Texas
“If your time to you is worth savin’; Then you better start swimmin’ or
you’ll sink like a stone; For the times they are a-changin’.” – Bob Dylan
Executive Summary
Since 1980, the Society for Information Management’s survey of its members has helped IT
leaders and other executives around the globe better understand important technology-related
issues and trends. This report presents the major findings of SIM’s 35th Anniversary IT Trends
Study based on responses from 717 mostly U.S.-based organizations, representing nearly 25% of
the U.S. economy’s Gross Domestic Product (GDP) and $200 billion in IT spending annually.
The Study finds that organizations continue to invest in IT to improve operations, reduce costs,
and enable strategies. IT budgets, hiring, and salaries are modestly increasing and IT executives
are cautiously optimistic that this trend will continue into next year.
The five most important IT management concerns of these organizations are:
1. Alignment of IT with the Business
2. Security and Privacy
3. Business Agility and Flexibility
4. Business Productivity
5. IT Time-to-Market/Speed of Delivery
Their five largest IT investments are:
1. Analytics and Business Intelligence
2. Data Center Infrastructure
3. Enterprise Resource Planning
4. Application Software Development
5. Cloud Computing
The Study and this report also include other important IT topics, including:
• IT spending patterns, including sourcing and the use of cloud and shared services.
• IT workforce trends, including retirement forecasts and specifics about the performance
measures used for in-house and outsourced IT, as well as to evaluate IT executives.
• To whom CIOs report, what they do with their time, with whom they spend it, what they
do with them, and what they think about the role of IT in strategy and innovation.
• Skill needs for the success of new IT hires, mid-level IT professionals, and CIOs.
• The personal views of senior IT leaders about their most important or worrisome IT
management issues and technologies.
Overall, the Study finds IT is becoming more strategic and business-focused; and it appears that
organizations are becoming more digitized with their focus shifting away from tactical and
operational IT issues like efficiency, service delivery, and cost reduction to more strategic and
organizational priorities like business agility, innovation, the velocity change in the organization,
IT time to market, and the value of IT to the business. Time will tell if this is a widespread trend,
but it is here now among SIM members and their organizations; and it is confirmed by a
corresponding shift in how CIOs are spending their time.
A big “THANKS!” to all SIM members who completed the IT Trends Study questionnaire! Page i
The 2015 SIM IT Trends Study:

Issues, Investments, Concerns, and Practices
of Organizations and Their IT Executives
Leon Kappelman, University of North Texas
Ephraim McLean, Georgia State University
Vess Johnson, University of the Incarnate Word
Natalie Gerhart, University of North Texas
This research was made possible through the generous support of:
Comprehensive Report (Price: $500)

** Free download to SIM Members on simnet.org **
This is the complete report of the Society for Information Management’s 35th
Anniversary IT Trends Study. It is embargoed by SIM until after it is presented at
their SIMposium conference in Denver on November 4, 2014. The slide deck of that
presentation will be available to the public on <www.simnet.org> after the
conference. An abridged version of this report will appear in the December 2014
issue of MIS Quarterly Executive and be available free of charge to all SIM members.
October 21, 2014

We have done our very best to make this report error free. But it is software; and you know how that goes
sometimes. So if you find defects or have questions, please let me know via Leon.Kappelman@unt.edu.
(C) 2014 The Society for Information Management and Leon A. Kappelman
A big “THANKS!” to all SIM members who completed the IT Trends Study questionnaire! Page ii
Table of Contents
Executive Summary ......................................................................................................................... i
Introduction ..................................................................................................................................... 1
I. The Top IT Management Issues and Concerns................................................................... 2
A. The Five Most Important IT Management Issues and Concerns of Organizations ............ 3
B. The IT Management Issues Most Important or Worrisome to IT Leaders ......................... 4
C. Comparing Organization’s Key Issues to Those Most Important or Worrisome to IT
Leaders ........................................................................................................................................ 5
II. The Largest IT Investments and Most Important Technologies ......................................... 7
A. The Organizations’ Largest IT Investments ....................................................................... 7
B. The Five Largest Technology Investments of Organizations ............................................. 8
C. Comparing Organizations’ Largest IT Investments to Their Most Important Ones ........... 9
D. The Most Worrisome Technologies for Senior IT Leaders .............................................. 10
E. Comparing IT Leadership’s Most Worrisome Technologies to the Largest Technology
Investments of Organizations ................................................................................................... 11
III. Participating Organizations and Their IT Practices .......................................................... 13
A. IT Organization Structure ................................................................................................. 14
B. Role of IT in Strategy and Innovation .............................................................................. 15
C. IT Budgets and Staffing Trends ........................................................................................ 17
i. IT Budgets and Spending Trends ................................................................................... 17
ii. IT Budget Allocations ................................................................................................ 18
iii. IT Staffing and Salary Trends .................................................................................... 21
a. IT Employees and Their Salaries ............................................................................ 21
b. IT Contractors and Consultants .............................................................................. 22
c. Turnover and Retirements, Education and Training ............................................... 23
D. Use of Cloud, Shared Services, Service Catalogs, and Chargebacks ............................... 25
i. Cloud-Based IT Services and Solutions ......................................................................... 25
ii. Shared Services for IT Delivery ................................................................................. 26
iii. Service Catalogs and Chargebacks ............................................................................. 28
IV. CIO Reporting Relationships, Time Allocation, Background, Tenure and Performance
Measurement ................................................................................................................................. 30
A. CIO Tenure ....................................................................................................................... 30
B. CIO Reporting Relationships ............................................................................................ 31
C. CIO Previous Employment ............................................................................................... 32
D. Performance Measurement for CIOs ................................................................................ 34
A big “THANKS!” to all SIM members who completed the IT Trends Study questionnaire! Page iii
E. How CIOs Spend Their Time, with Whom, and What They Do with Them ................... 36
V. Skills Needed for the Success of New IT Hires, Mid-Level IT Professionals, and CIOs 42
A. The Top Five Skills for the Success of CIOs, Mid-Level IT Professionals, and New IT
Hires .......................................................................................................................................... 42
B. Skills for Success and Career Progression ........................................................................ 45
VI. Summary and Conclusion ................................................................................................. 47
Appendix: Research Methods, Design, and Delivery of SIM’s IT Trends Study ........................ 49
A big “THANKS!” to all SIM members who completed the IT Trends Study questionnaire! Page iv
Figures and Tables

Figure 1: Organizations’ Top 10 Most Important IT Management Concerns, 2003-2014 ............. 2
Figure 2: IT Leaders’ Most Important or Worrisome IT Management Concerns (2013-14) ......... 5
Figure 3: Comparison of Personal to Organization’s Top 10 IT Management Issues.................... 6
Figure 4: Organizations’ Largest/Most Significant IT Investments, 2003-2014 ............................ 7
Figure 5: Comparing Organizations’ Largest IT Investments to its Most Important (2014)........ 10
Figure 6: Personally Most Worrisome Technologies (2013-2014) .............................................. 11
Figure 7: Comparing IT Leadership’s Most Worrisome Technologies to the Organization's
Largest IT Investments (2014) ...................................................................................................... 11
Figure 8: Percent of Revenue Allocated to IT Budget (2005-2014) n=493 ............................. 13
Figure 9: IT Organization Structure 2006-2014 (717 responding organizations) ........................ 14
Figure 10: IT Organization Structure with Averages 2006-2014 (717 responding organizations)
....................................................................................................................................................... 15
Figure 11: IT Alignment, Credibility, and Role in Strategy and Innovation ................................ 15
Figure 12: IT is Aligned with the Business (717 unique organizations) ...................................... 17
Figure 13: Change in IT Budget from Previous Year (2004 to 2014 actual, 2015 projected)...... 18
Figure 14: IT Budget Allocations 2014 Actual and 2015 Projected (n = 366) ............................. 19
Figure 15: 2009-2014 IT Budget Allocation (Actual) and 2015 Projection ................................. 20
Figure 16: 2009-2014 IT Budget Allocations (Actual) and 2015 Projection, with Trendlines .... 20
Figure 17: Change in Number of Internal IT Employees ............................................................. 22
Figure 18: Full-Time IT Employee Actual Turnover Rate 2006-2014......................................... 23
Figure 19: Percent of IT Budget Spent on Training and Education ............................................. 24
Figure 20: Distribution of Organizations by Percent of IT Delivered by Cloud (n = 528) .......... 25
Figure 21: Percentage of External Cloud-Based IT Services Delivered In These Categories. ..... 26
Figure 22: Distribution of Organizations by Percent of IT as Shared Service (n = 452) ............. 27
Figure 23: Delivery of IT Shared Services – Internal versus External Capabilities (n = 267) ..... 28
Figure 24: The Use of Service Catalogs and Chargebacks (n = 615) ........................................... 28
Figure 25: In my organization we have an IT services catalog (n = 615) .................................... 29
Figure 26: We charge users for the IT services they consume (n = 615) ..................................... 29
Figure 27: Average Job Tenure of CIOs (2006-2014) (n = 451 CIOs) ........................................ 30
Figure 28: To Whom the CIO Reports, 2005-2014 by percentage of respondents ...................... 31
Figure 29: To Whom the CIO Reports, 2005-2014 by percentage of respondents ...................... 32
Figure 30: CIOs with a Seat at the Strategy Table (n = 364 CIOs) .............................................. 32
Figure 31: CIO Prior Employment (2010 to 2014) with Subtotals (n = 451 CIOs) ..................... 33
Figure 32: CIO Prior Employment (2010 to 2014) ....................................................................... 33
A big “THANKS!” to all SIM members who completed the IT Trends Study questionnaire! Page v
Figure 33: CIO Performance Measures (with Internal & Outsourced IT Metrics)....................... 35
Figure 34: Average Percent of a CIO's Time Spent Working with the Following (n = 305) ....... 37
Figure 35: Summary: With Whom Do CIOs Spend Their Time? (n = 305) ................................ 38
Figure 36: Frequency of CIO Interactions with Other Executives ............................................... 38
Figure 37: Frequency of CIO Interactions with Other Executives ............................................... 39
Figure 38: Frequency and Value of CIO Interactions with Other Executives (2013-14) ............. 39
Figure 39: Compare Two Calculations of Percent of CIO Time Spent Working with Whom ..... 40
Figure 40: What CIOs Do with Their Time .................................................................................. 41
Figure 41: Most Important Skills for the Success of CIOs, Mid-Level IT Professionals, and New
IT Hires ......................................................................................................................................... 43
Figure 42: Top Five Most Important Success Skills for CIOs, Mid-Level IT Professionals, and
New IT Hires................................................................................................................................. 44
Figure 43: Top Five Most Important Success Skills for New, Mid, and CIOs Sorted by CIOs’ . 45
Figure 44: Top Ten Most Important Success Skills for New, Mid, and Top Sorted by Top 10 of
New ............................................................................................................................................... 46
Figure 45: Response by Industry for 717 Unique Organizations ................................................. 49
Figure 46: Total Revenue of Organization (n = 564) ................................................................... 50
Figure 47: Modifications to List of IT Management Concerns/Issues ......................................... 50
Figure 48: Modifications to List of IT Investment Priorities and Concerns ................................. 51
Figure 49: Additions and Changes to the List of Performance Measures .................................... 52
Figure 50: Changes to the Lists of What CIOs Do and With Whom They Do It ......................... 53
A big “THANKS!” to all SIM members who completed the IT Trends Study questionnaire! Page vi
“What we observe is not nature itself, but nature exposed to our

method of questioning.” – Werner Heisenberg
Introduction
Since 1980, the Society for Information Management (SIM), in a joint effort with different
universities, has conducted a Study of the key issues facing IT executives. Over time, these
studies have expanded to include questions pertaining to spending, workforce sizing and salaries,
sourcing, reporting relationships, performance measurement, and various other IT organizational
and management practices. They also explored how IT executives spend their time, with whom
they spend it, and what they do with them, as well as their assessment of the role and state of IT
in their organizations. In addition to providing a snapshot of the state of IT, another important
contribution of this multi-year research effort is its ability to identify important trends across the
industry and the IT profession. This report presents the major findings and insights gained from
the 35th Anniversary SIM IT Trends Study, conducted in the second quarter of 2014, with
comparisons to earlier SIM Study results, organized into the following five main sections, with
an appendix describing the conduct of the Study.
I. The Top IT Management Issues and Concerns
II. The Largest IT Investments and Most Important Technologies
III. Participating Organizations and Their IT Practices
IV. CIO Reporting Relationships, Time Allocation, Background, Tenure, and
Performance Measurement
V. Skills Needed for the Success of New IT Hires, Mid-Level IT Professionals, and
CIOs
Last year, for the first time, the most important IT Management Issues and largest IT
Investments sections were expanded to compare organizational priorities with the issues and
technologies of greatest personal concern to IT leaders. This provided some intriguing results
and we continued the practice this year, further expanding upon it to include the most important
technologies of the organization. In the Performance Measurement section, in addition to the
most important metrics for internal and outsourced IT, questions were added regarding the
measures of IT executive performance. A new section was also added about the most important
skills for the success of new IT hires, middle-career IT professionals, and the responding IT
executives themselves, as well as some new questions about the role of IT in their organizations.
In the pages that follow, these and other modifications and improvements are discussed further.
An invitation was distributed by individual e-mail with a personal link to all 4,612 SIM
members. A record total of 1,002 complete responses were received for a 21.7% response rate,
up from 655 the prior year. Of these, 839 were senior IT leaders from 717 unique organizations
(represented by their highest ranking IT executive). We also analyzed separately the responses
from 451 CIOs, who identified themselves as the “top or highest IT person, (e.g., the CIO)”
among those who completed the questionnaire 1. See “Appendix: Research Methods, Design,
and Delivery of SIM’s IT Trends Study” for additional information about the research.
1
428 of these CIOs are from the 717 unique organizations while organization affiliation was not available for 23 of
the CIOs.
A big “THANKS!” to all SIM members who completed the IT Trends Study questionnaire! Page 1
“We are entering a period of consequences. We cannot avoid

this period; we are in it now.” – Winston Churchill
I. The Top IT Management Issues and Concerns

The participants were asked to select, from a list of 40, up to three IT management issues that
they considered “most important” to their organization and up to three issues that were “most
important or worrisome” to them personally or that “keep you up at night.” This is similar to the
approach used since the first SIM IT Trends Study in 1980; although the second, personal
question was added for the first time last year. Capturing both the organizational and personal
perspectives of the respondents provides additional insights. Some items on the selection list
were modified or deleted (based on very low selection rates the previous year), and additional
ones added for this year’s Study. A complete listing of these changes can be found in the
Appendix.
The organization’s top 10 most important IT management concerns, from the perspective of the
senior-most IT leader in each of the 717 organizations, are shown in Figure 1, together with the
comparative rankings from prior SIM IT Trends Studies since 2003. Four new items appear in
the top 10 list this year: Two of these are completely new (“Innovation” and “IT Value
Proposition in the Business”) and two are the result of “Time to Market/Velocity of Change”
becoming three separate selections (“Velocity of Change in the Business,” “IT Time-to-
Market/IT Speed of Delivery,” and “Velocity of Change in IT”), the first two of which ranked in
the top 10.
Figure 1: Organizations’ Top 10 Most Important IT Management Concerns, 2003-2014

IT Management Concerns/Issues 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003
Alignment of IT with the Business 1 1 2 1 3 2 1 2 1 1 1 1
Security/Privacy (a) 2 7 9 8 9 9 8 6 3 2 3 3
Business Agility/Flexibility (b) (c) 3 2 3 2 2 3 13 17 7 5 7
Business Productivity 4 3 1 4 1 1 7 4
IT Time-to-Market/Speed of IT Delivery 5 (c) New; was with “Velocity” in 2013, and “Agility” through 2012.
IT Value Proposition in the Business 6 New
Velocity of Change in the Business 7 (c) New; was with “Time to Market” in 2013, and “Agility” through 2012.
Innovation 8 New
Business Cost Reduction/Controls 9 4 Combined with “Business Productivity” through 2012.
Revenue Generating IT Projects 10 10 4 9 6 8 17
(a) “Security” and “Privacy” were recombined this year. Separated in 2013, “Privacy” was not selected by any respondent.
(b) “Flexibility” added this year.
(c) In 2013, “Business Agility & Speed to Market” became “Time to Market/Velocity of Change” and “Business Agility.” This
year, “Time-to-Market/Velocity of Change” was separated and became three selections: “Velocity of Change in the
Business,” “Velocity of Change in IT,” and “IT Time-to-Market/IT Speed of Delivery.”
(-) Blank cells, unless otherwise noted, indicate that the issue was not asked in that year of the Study.
n = senior-most IT leader in 717 unique organizations
Comparing this year’s remaining six top 10 with those of prior years, these issues have been
relatively stable, although their rankings did shift a bit with “Security/Privacy” moving up to the
number two slot from number seven and “Business Cost Reduction” moving from fourth to ninth.
“Alignment of IT with the Business” remains in the number one position for a second straight
year. New items “IT Value Proposition in the Business” and “Innovation” appear in the sixth
and eighth positions respectively, and “Revenue Generating IT Projects” held steady at number
ten.
Three items fell off the organizations’ top 10 list this year. “IT Cost Reduction and Controls,”
which had appeared as a top 10 issue since 2003, dropped to 17th position. “IT Service
Delivery,” added to the list last year when it ranked eighth, became “IT Operations/ITIL/IT
Service Delivery/‘Keeping the Lights On’” this year and fell to 22nd place. Finally, “IT
Efficiency,” in the top 10 since 2009, and ninth ranked last year after being separated from “IT
Reliability,” dropped out of the top 10 to 21st.
It appears that, aside from “Security” rightfully moving up, given the many high profile and
costly breaches in the past year, there has been a shift in priorities and focus among
organizations and their IT leadership away from tactical and operational IT issues like efficiency,
service delivery, and cost reduction to more strategic and organizational priorities like business
agility, innovation, the velocity of change in the organization, IT time to market, and the value of
IT to the business. It seems that IT is becoming more strategic and business-focused and
presumably the organization is becoming more digitized. Time will tell if this represents a
widespread trend, but it is here now among SIM members and their organizations.
A. The Five Most Important IT Management Issues and Concerns of Organizations

Looking at the organizations’ top five most important IT management concerns in Figure 1,
Aligning IT with the Business, which has ranked in the top three positions for over a decade, is
ranked number one this year. Security/Privacy, which were recombined this year, ranks number
two, up five positions. Business Agility ranks third and has appeared in the top three since 2009.
Business Productivity, also in the top five since 2009, ranks fourth, and IT Time-to-Market is
number five. It is noteworthy that only one of the selections, Alignment, was chosen by more
than 20% of respondents. This suggests a significant amount of variance in focus and priorities
across organizations in terms of the IT management issues they face. Even though over 95% of
responding organizations are U.S.-based, this is not surprising given the relatively high degree of
diversity in terms of industries and sizes in our sample of 717 organizations (see Appendix for
details).
1. Aligning IT with the Business
Aligning IT with the Business has been a top ten concern since it first appeared in the SIM
studies in 1984. It ranked number one in eight of the last twelve years, and second in all but
one. This year, 188 of 717 organizations, or 26.2% of all the responding organizations,
identified Alignment as one of their top three IT management concerns. The issue of IT
Alignment with the Business has been of significant interest to both researchers and
practitioners for decades and appears to be central to how IT executives view the purpose of
IT and their own roles. Perhaps alignment is a persistent issue because organizations,
markets, economies, and technologies are constantly changing, and thus getting and staying
aligned is a continuous activity too. Although applicable and useful, we wonder if this
decade’s old concept has perhaps overstayed its welcome, in some ways fostering a divisive
us-them mentality rather than the holistic oneness required of a digitized, agile, fast, and
efficient enterprise. On the other hand, perhaps the definition of the term will evolve as we
are still discovering and inventing what it really means to align IT with the organization.
2. Security and Privacy
In this year’s Study, Security and Privacy were recombined into a single selection, since
Privacy received no votes last year when listed separately for the first time. Security and
Privacy has hovered between sixth and ninth position since 2007, but moved up to number
two this year. Security and Privacy was considered one of their top three issues by 126
(17.6%) of the participating organizations. This high ranking is not surprising given that in
the past year significant breaches were reported at Adobe, Community Health Systems,
Experian, Facebook, Home Depot, Neiman Marcus, PF Chang, Target, Twitter, the U.S.
Department of Homeland Security, the U.S. Federal Reserve Bank, and countless other
organizations. In fact, once could reasonably conclude that it is a surprisingly low response
on the part of the respondents. Even so, it regrettably took these very high profile breaches
and their high costs to reputations, brands, finances, and careers to help bring about this rise
in the importance of cybersecurity to the organization; nevertheless, it is most welcomed and
long overdue. Hopefully Security stays near the top going forward.
3. Business Agility/Flexibility
Business Agility has ranked in the top three positions since 2009. Although still in the top
five, this year it fell from second to third position with 120 or 16.7% of organizations
choosing Business Agility as one of their top three IT management issues. Agility’s
continuously high ranking suggests that the greater uncertainly and increasing pace of change
that characterize these times correspondingly increases the need for organizations to be more
flexible and responsive to market, economic, regulatory, legal, and other changes. Thus
Business Agility becomes ever more important in achieving business success. But on the
other hand, organizational agility requires IT to be agile and fast also, not just in terms of
understanding the business and its requirements, but also by having a technological
infrastructure in place that can be quickly and economically changed as the business
requirements change. Organizational agility also requires an agile culture.
4. Business Productivity
Business Productivity, introduced into the SIM IT Trends Study in 2007, was selected as a
top IT management concern by 113 organizations (15.8%) making it this year’s fourth most
important concern, down from number three in 2013 and number one in 2012. Business
Productivity has been in the top five in all but one year since its initial introduction, and
ranked number one three times during that seven-year period. Its continued high ranking
demonstrates that organizations are still striving to “do more, with less.”
5. IT Time-to-Market
IT Time-to-Market, an enabler of Agility (3rd), Productivity (4th), and IT Value Proposition
(6th), is a critical component of coping with Velocity of Organizational Change (7th) and even
of quickly-changing Security (2nd) needs. Therefore, it is not surprising that IT Time-to-
Market ranks number five as a top organizational concern, selected by 107 (14.9%) of the
participating organizations. It can be argued that it is also an important contributor to IT-
Organization Alignment.
B. The IT Management Issues Most Important or Worrisome to IT Leaders

For a second year, we asked respondents to report not only on the IT management issues
important to their organization, but also on issues that were personally “most important or
worrisome to you (i.e., things that keep you up at night).” While we have only two years of data
to present in Figure 2, the year-to-year changes are significant in that five new or revised
selections moved into the top 10.
Security and Privacy moved from second into the number one position with 183 (25.5%) of 717
participating senior IT leaders selecting it as one of their three personally most important or
worrisome IT management issue. The IT Talent/Skill Shortage/HR moved up from third into the
number two position with 150 (20.9%) participants selecting it as a top concern. Alignment of
IT with the Business, a consistently top first or second organizational concern, fell as a personal
concern from first to third. Rounding out the top five are the revised selection, IT Time-to-
Market/Speed of IT Delivery, in fourth place and the brand new item, IT Value Proposition to
the Business, in fifth.
Figure 2: IT Leaders’ Most Important or Worrisome IT Management Concerns (2013-14)

Most Important/Worrisome Concerns to the IT Leader 2014 2013
Security/Privacy 1 2 (c)
IT Talent/Skill Shortage/HR 2 3
Alignment of IT with the Business 3 1
IT Time-to-Market/Speed of IT Delivery 4 New 6 (a)
IT Value Proposition to the Business 5 New
Prioritization Process for IT Projects 6 5
Velocity of Change in IT 7 New 6 (a)
IT Strategic Planning 8 11
Velocity of Change in Business 9 New 6 (a)
IT Disaster Recovery 10 4 (b)
(a) Last year “Time to Market/Velocity of Change” was one selection but it was neither IT- nor Business-
specific. So this year, it became three items, all of which ranked in the top 10.
(b) The selection “Business Continuity/Disaster Recovery” ranked fourth last year and was split this year into
two separate selections, “Business Continuity” and “IT Disaster Recovery.”
(c) This was simply “Security” last year.
The five items dropping out of the personal top 10 are Business Continuity/Disaster Recovery
(was fourth last year), Business Agility (was sixth), IT Service Delivery (was seventh), Change
Management (was eighth), and the CIO Leadership Role (was tenth). Particularly noteworthy is
that all three of the selections that replaced last year’s Time-to-Market/Velocity of Change made
the personal top 10, with IT Time-to-Market/Speed of IT Delivery (at fourth this year), Velocity
of Change in IT (at seventh), and Velocity of Change in Business (at ninth). It seems the pace of
change is increasing; but even if it is remaining constant, there is little doubt that coping with it
is significantly on the minds of IT leaders.
Moreover, these changes in the top 10 personal concerns also point to a shift in priorities and
focus among senior IT leaders away from tactical and operational IT issues like disaster
recovery, service delivery, and change management to more strategic and organizational
priorities like the IT value proposition, IT strategic planning, faster delivery, and coping with
changing conditions.
C. Comparing Organization’s Key Issues to Those Most Important or Worrisome to IT

Leaders
As discussed above, respondents were asked to select up to three IT management concerns that
they considered most important both to their organization and most important or worrisome to
them personally. Interestingly, as was also the case last year when this was done for the first
time, this brought to light several significant differences between their personal concerns and
their organizational concerns (see Figure 3). Only three items ― Security, Alignment, and IT
Time-to-Market ― appear in the top five of both the senior IT leaders’ most important IT
management concerns and their organizations’ concerns, with two others, IT Value Proposition
and Velocity of Business Change, in the top 10 of both lists, for a total of five in common.
Figure 3: Comparison of Personal to Organization’s Top 10 IT Management Issues

Most Important or Worrisome Most Important to the
to IT Leaders (2013) Organization (2013) IT Management Issues
1 (2) 2 (7) Security/Privacy
2 (3) 18 (16) IT Talent/Skill Shortage/HR
3 (1) 1 (1) Alignment of IT with the Business
4 (New) (a) 5 (a) IT Time-to-Market
5 (New) 6 (New) IT Value Proposition to the Business
6 (5) 14 (11) Prioritization Process for IT Projects
7 (New) (a) 26 (a) Velocity of Change in IT
8 (11) 14 (15) IT Strategic Planning
9 (a) 7 (a) Velocity of Change in Business
10 (4) 27 (14) (b) IT Disaster Recovery
(a) Last year “Time to Market/Velocity of Change” ranked sixth, but was only one selection and neither IT- nor
Business-specific.
(b) The selection “Business Continuity/Disaster Recovery” ranked fourth last year and was split this year into
two separate selections, “Business Continuity” and “IT Disaster Recovery.”
Security/Privacy, selected by 183 (25.5%) of senior IT leaders is the top personal concern for IT
management, and is the number two concern for organizations. IT Talent/Skill Shortage/HR is
the number two personal issue, selected by 150 (20.9%) respondents. However, this issue ranks
18th for the organization, which is not surprising since it is an IT operational issue. Alignment of
IT with the Business is number one for the organization and is the number three personal issue,
having been selected by 143 (19.9%) of respondents. The fourth and fifth personal issues are IT
Time-to-Market and IT Value Proposition to the Business respectively. These items appeared in
the fifth and sixth position on the organizational priority rankings. The only other item that is
common to both top 10 lists is Velocity of Change in Business. This issue ranked ninth as a
personal issue and seventh as an organizational issue.
Not surprisingly, the five items in the personal top 10 but not in the organization’s top 10, are
rather specific to the responsibilities of IT leaders; i.e., IT Skills Shortage, Prioritization Process
for IT Projects, Velocity of Change in IT, IT Strategic Planning, and IT Disaster Recovery.
Although clearly relevant to the organization too, they are the “table stakes” for the credibility of
the IT department and its leadership. To fail on any of these, or on Security or IT Time-to-
Market, is to be denied that coveted “seat at the table” of business strategy, and even the prospect
of finding oneself looking for a new job.
“Data was always big. It was the thinking (and

marketing) that was small.” – Howard Rubin
II. The Largest IT Investments and Most Important Technologies

A. The Organizations’ Largest IT Investments
Participants were asked to select, from a list of 47 technologies, up to three of their
“organization’s largest /most significant current or near-future IT investments,” up to three that
are “most important” to their organization, and up to three that cause “the greatest concern to me
personally.” Some items on the selection list last year were deleted (based on very low selection
rates the previous year) or modified, and additional ones added to this year’s Study. A complete
listing of these changes can be found in the Appendix.
Figure 4 lists the top 15 technologies identified as the largest investments for the 717
participating organizations, along with their rankings since 2003. The ranking have shifted when
compared to 2013, yet all but two entries in this year’s top 15 were also top 15 entries last year;
specifically, a new item, “Data Center Infrastructure” which ranks second, and “Legacy
Applications,” tied at 15th. There are also two new entries in the top 10, (“Data Center” and
“Security”), and two in the top 15 that fell out of last year’s top 10 (Mobile Applications and
Portals).
Figure 4: Organizations’ Largest/Most Significant IT Investments, 2003-2014

2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003
Analytics/Business Intelligence 1 1 1 1 1 1 2 2 2 3 2 1
Data Center Infrastructure 2 New
Enterprise Resource Planning 3 4 3 3 3 3 14 6 5
Application & Software Development (d) 4 6 11
Cloud Computing (f) (e.g., SaaS, IaaS, etc.) 5 3 2 2 5 17 (a)
Customer Relationship Management 6 2 5 5 9 13
Security/Cybersecurity (b) 7 14 11 8 8 1
Integration (c)/Application Integration 8 7 8 9 18 5 12 10 2 8 3
Network/Telecommunications 9 8 12
Big Data 10 5 10
Disaster Recovery 11 11 13 14 4 6 3 4
Virtualization 11 13 15 7 2
Mobile/Wireless Applications (e) 13 6 6 4 9 24 4 11
Customer/Corporate Portals 14 9 16
Collaboration Tools 15 12 4 8 7 7
Legacy Applications 15 16
(a) Blank cells indicate that the technology was not asked about in that year of the Study.
(b) In 2006 and 2008, this was listed as “Security Technologies” and simply “Security” in 2010, 2011, and 2013.
(c) In 2013, “Enterprise Application Integration” (EAI) ranked 7th and “EAI Management” (EAIM) 19th; in 2008-12
only EAI/EAIM appeared; in 2007, only “Integrating Applications”; in 2005, “System Integration” ranked 2nd and
EAI 10th; and in 2003, only EAI appeared.
(d) In 2013, this was “Apps” and ranked 6th and “Application Development” was 11th in 2012.
(e) “Mobile/Wireless Applications” appeared in 2003, 2005, and 2009 through 2013 ranking 24th, 9th, 4th, 6th, and 16th.
“Mobile Apps” also appeared in 2013 ranking 6th.
(f) In 2009, 2010, and 2011 “SaaS” was also included and ranked 15th, 9th, and 6th.
Generally speaking, and consistent with last year, a relatively small percentage of the 717
respondents selected any one technology. This indicates that IT investments are well diversified
across a broad number of options. Only the top nine were selected by more than 10% of the
respondents. This is not particularly different than the IT management issues shown in Figure 1,
of which only the top 10 were selected by more than 10% of the participating organizations.
B. The Five Largest Technology Investments of Organizations

Analytics/Business Intelligence was selected by 30.1% of the respondents and it is the number
one IT investment for the sixth year in a row. A new item, Data Center Infrastructure, ranks
number two (selected by 19.1%) and Enterprise Resource Planning is number three (selected by
18.7%). Applications/Software Development is ranked fourth (18.4% of respondents); Cloud
Computing, fifth (15.6%); Customer Relationship Management, sixth (13.8%); Security, seventh
(11.9%); Integration, eighth (11.2%); and Network/Telecommunications, ninth (11%). The
items ranked 10th to 17th were each selected by between 5% and 9% of respondents.
1. Analytics/Business Intelligence
Analytics/Business Intelligence (A/BI) remains in first place as the largest IT investment, a
ranking it has held for six years straight. It has ranked in the top three since 2003, when it
was first added to the list. A/BI was selected by 216 organizations (30.1%), as one of their
three largest or most significant IT investments. However, the percentage of organizations
selecting this is down from 42% last year. It is worth mentioning that potential synergies
exist between A/BI systems and the data made available via investments in third-ranked
ERP, sixth-ranked CRM, and ninth-ranked Big Data, as well as many of the other
technologies listed in Figure 4.
2. Data Center Infrastructure
Data Center Infrastructure was added to the list of options this year and jumped into second
place, selected by 137 or 19.1% of responding organizations as one of their three largest
technology investments. These large investments in infrastructure are surprising in light of
the significant growth of publically traded cloud providers and the many reported moves to
“the Cloud” appearing in the business and IT press, where capital investments can be turned
into current expenses. Increasing use of the Cloud is confirmed by this year’s IT Trends
Study’s IT budget and cloud utilization data too, as reported below. Nevertheless, nearly
20% of the respondents reported making large investments in Data Center Infrastructure. It
is noteworthy; however, that this year’s Study finds that nearly half of cloud-base IT services
are delivered via in-house private clouds, and that only five responses separated the second-
and fourth-ranked technology investments.
3. Enterprise Resource Planning (ERP)
Investments in ERP systems have ranked in third position in five of the last six years. This
year it was selected as one of the three largest investments by 134 (18.7%) of the
respondents. Like data centers, ERPs tend to be large investments. However, unlike data
centers, ERP systems are designed to provide a vehicle for reducing business expenses and
optimizing business processes, both important management objectives. Also, ERP systems,
by virtue of the comprehensive and integrated data that they provide about internal
operations, as well about supply chains and customers, enable second- and third-order
benefits when used in combination with A/BI and other systems. Thus it is not surprising to
see that ERPs continue to be large, significant investments for many organizations.
4. Application and Software Development

Selected by 132, or 18.4% of the respondents, Application and Software Development is
ranked fourth this year. Interestingly, software development has been moving up in the
rankings since its introduction in 2012. This high ranking may come as a surprise in the
world of off-the-shelf software, Software-as-a-Service (SaaS), and Cloud Computing; and
yet, custom software development is still a critical undertaking in many organizations.
Nearly 35% of the responding organizations are in industries where developing and/or using
custom software is common. Figure 45 in the Appendix shows that 14.8% of the 717
responding organizations are in financial services; IT hardware, software, and services
(9.1%); government (5.3%); and medical technology, telecommunications, and electronics
(4.0% combined).
5. Cloud Computing
Cloud Computing was selected by 112 organizations (15.6%) as one of their three largest IT
investments. As indicated in Figure 4, the first appearance of Cloud Computing was in 2009,
when both “Cloud Computing” and “Software-as-a-Service (SaaS, PaaS)” appeared
separately. These listings continued in 2010 and 2011; but in 2012, Cloud Computing was
redefined to include SaaS, PaaS (Platform-as-a-Service), and IaaS (Infrastructure-as-a-
Service). Despite this single, expanded definition, Cloud Computing dropped to fifth place
this year as the largest or most significant investment, down from third place in 2013 and
second place in both 2011 and 2012. That does not necessarily mean, however, that fewer IT
budget dollars are going to Cloud Computing, or that fewer IT services or solutions are being
delivered that way; and in fact, it appears quite the opposite is occurring (as discussed the
“Participating Organizations and Their IT Practices” section below).
Last year, for the first time, respondents were asked to report on both their organization’s largest
IT investments as well as those “of greatest concern” personally to the senior IT leaders
themselves. This proved quite revealing 2, and so it was repeated again in this year’s Study.
Additionally, this year respondents we also asked to select up to three technologies that are
“most important” to their organizations. By separately assessing organizations’ largest
technology investments, those of greatest importance, and those of greatest concern to IT leaders,
additional detail and granularity are added to the research. This also provided some interesting
insights as detailed below.
C. Comparing Organizations’ Largest IT Investments to Their Most Important Ones

The technologies identified by the respondents as being most important to their organizations
map fairly well to those technologies where the organization is making the largest investments.
As indicated in Figure 5, nine of the top ten are present on both of the lists, but with different
rankings. Also, Legacy Applications only appears on the most important list (at 10th) and Big
Data only appears on the largest investments list (also at 10th but 12th on the importance list).
As for the differences in the rankings between the two lists, Data Center Infrastructure, a capital
intensive item for an organization, ranks only sixth on the most important technology list (with
13.1% selecting it), but second on the largest IT investment list (selected by 19.1%). Legacy
Applications, selected by 5.6% of organizations and ranking as the 15th largest investment, was
selected by 7.9% to rank 10th as a most important technology. Big Data is 10th on the top 10 list
2
Kappelman, L. A., McLean. E. R., Luftman, J., Johnson, V. (2013) Key Issues of IT Organizations and Their
Leadership: The 2013 SIM IT Trends Study, MIS Quarterly Executive, 12(4), 227-240.
of largest investments (selected by 8.8% of organizations), but only ranks 12th on the most
important list (selected by 7% of responding organizations’ senior-most IT leaders).
Figure 5: Comparing Organizations’ Largest IT Investments to its Most Important (2014)

Most Important Largest IT
Technology to the Investments for Technology/Application
Organization the Organization
1 1 Analytics and Business Intelligence
2 3 Enterprise Resource Planning
3 4 Application and Software Development
4 6 Customer Relationship Management
5 8 Integration/Enterprise Application Integration
6 2 Data Center Infrastructure
7 5 Cloud Computing
8 7 Security and Cybersecurity
9 9 Networking and Telecommunications
10 15 Legacy Applications
D. The Most Worrisome Technologies for Senior IT Leaders

This year’s top six technologies that are most personally worrisome to senior IT leaders (“things
that keep you up at night”) were selected by more than 11% of the respondents, with numbers
seven thru 19 by between 5% and 10%. The top 10 most worrisome technologies remained
fairly consistent when compared to last year. However, there are some differences. In
particular, BYOD (18th this year), Enterprise Architecture (15th), and CRM (13th) all dropped out
of the top 10 to be replaced by Application Development (fifth, up from 15th last year) and the
two new items, “Data Center Infrastructure”(tenth) and “Innovative/Disruptive Technologies”
(tied for seventh). Security moved up from second to first, being selected by 224 or 31.2% of the
respondents, while second-ranked Analytics and Business Intelligence was selected by 160
respondents (22.3%). Disaster Recovery ranks third this year as the most worrisome technology,
selected by 106 (14.8%). Integration is fourth with 14.5%; and rounding out the top five is
Software Development, selected by 13.1%. The only other item selected by at least 10% of the
respondents is Cloud Computing, at sixth with 11.6%.
Looking over this year’s rankings of the things that keep senior IT leaders up at night, they seem
about evenly divided between “keeping the IT lights on” (i.e., security, disaster recovery, legacy,
and infrastructure) and “increasing business capabilities” (i.e., analytics, integration, software
development, innovation, and ERP). Cloud could be in both categories, and disruptive
technologies could be seen as in a strategic IT-value proposition category of its own.
Figure 6: Personally Most Worrisome Technologies (2013-2014)

Information Technology 2014 2013
Security and Cybersecurity 1 2
Analytics and Business Intelligence 2 1
Disaster Recovery 3 3
Integration 4 7(b)
Application Software Development 5 15 (a)
Cloud Computing 6 4
Legacy Applications 7 8
Innovative/Disruptive Technologies 7 New
Enterprise Resource Planning 9 9
Data Center Infrastructure 10 New
(a) Last year, “Apps” ranked 15th and “Mobile/Wireless Applications” ranked 14th.
(b) Listed as “Enterprise Application Integration” (EAI) last year.
E. Comparing IT Leadership’s Most Worrisome Technologies to the Largest Technology

Investments of Organizations
As was the case last year, the technologies that keep senior IT leaders up at night are somewhat
different than the largest IT investments in their organizations 3. Nevertheless, as indicated in
Figure 7, the similarities in some ways outweigh the differences, with seven items on both top 10
lists and two on both top five listings. This is more than last year, when only four of the IT
leaders’ top 10 were in the organizations’ top 10. However, there are still some interesting
differences, with Disaster Recovery (third for IT leaders) and Legacy and Innovative/Disruptive
Technologies (tied for seventh) appearing only on the personally most worrisome top 10, while
CRM (13th for IT leaders), Network/Telecom (17th), and Big Data (12th) appear only on the
organizations’ top 10 largest investments list (as shown in Figure 4 above).
Figure 7: Comparing IT Leadership’s Most Worrisome Technologies to the Organization's

Largest IT Investments (2014)
Most Largest IT
Important/Worrisome Investments for Technology/Application
to Senior IT Leader: the Organization:
Rank (% selecting) Rank (% selecting)
1 (31.2%) 7 (11.9%) Security and Cybersecurity
2 (22.3%) 1 (30.1%) Analytics and Business Intelligence
3 (14.8%) 11 (6.7%) Disaster Recovery
4 (14.5%) 8 (11.2%) Integration
5 (13.1%) 4 (18.4%) Application Software Development
6 (11.6%) 5 (15.6%) Cloud Computing
7 (9.8%) 15 (5.6%) Legacy Applications
7 (9.8%) 20 (4.3%) Innovative/Disruptive Technologies
9 (8.6%) 3 (18.7%) Enterprise Resource Planning
10 (7.3%) 2 (19.1%) Data Center Infrastructure
3
Kappelman, et al., (2013), ibid.
The percentage differences shown in Figure 7 are also revealing. Some technologies represent
large investments, yet they’ve been around long enough that senior IT leaders are experienced
with them and don’t feel that they need to worry about them. For example, ERPs have been with
us for decades and most senior IT leaders have extensive experience with them. Although ERPs
represent a large, expensive, and therefore risky technology project, it only ranks ninth (8.6%) on
the personally most worrisome list, while third on the largest investment list with 18.7%. On the
other hand, Analytics, a newer technology and typically involving projects that are much smaller
and less risky than ERPs, was selected by over 30% of the respondents and is number one on the
organizations’ largest investment list, and number two on their personally most worrisome list
(22.3%). Some of the other differences are technologies that may not require a very large
investment but are critical for keeping the IT lights on, and thus are fundamental for the
credibility, reputation, and job security of senior IT leaders. Security is an example of this, as it
ranks as the number one personal concern with 31.2% selecting it, compared to seventh with
only 11.9% selecting it as one of the three largest technology investments of their organization.
Similarly, Disaster Recovery ranks number third as a personal concern, with 14.8% selecting it,
while 11th on the largest investment list, with only 6.7% choosing it.
“We shape our buildings; thereafter they shape us.” – Winston Churchill
III. Participating Organizations and Their IT Practices

We identified 717 unique organizations represented by a senior IT leader; these are the primary
dataset for this report. Nearly all (95.1%) of these organizations are based in the U.S. Most
economic sectors and industries are represented, with the top five making up 50.9% of the
sample (Financial Services, 14.8; Manufacturing, 13.1%; Health/Medical, 9.9%; Education,
7.8%; and Government, 5.3%). Additional details about these organizations are in the Appendix,
including their distribution by industry in Figure 45.
Their average revenue is $5.58 billion, for the 564 organizations that reported these data, up from
$4.36 billion last year. Assuming that all 717 of the organizations in the respondent dataset have
about the same average revenue as this smaller subset, they represent nearly $4 trillion in
revenue or about 25% of U.S. Gross Domestic Product. As indicated in Figure 46 in the
Appendix, the majority have revenue between $100 million and $5 billion; and their median
revenue of $494 million is about the same as last year. Organizations of all sizes and industries
are well represented, which is fairly uncommon in studies of this kind. All this speaks well to
the diversity among SIM’s member organizations.
Their IT spending as a percentage of revenue averaged 5.145% for the 493 organizations that
provided data, up from 4.95% last year, with a median of 2.50%, up from 2.24% last year.
Assuming that all 717 organizations have about the same average percentage of IT spending to
revenue, we estimate the average IT budget at about $287 million; so our sample represents over
$200 billion in annual IT spending 4.
Figure 8: Percent of Revenue Allocated to IT Budget (2005-2014) n=493
As indicated in Figure 8, average IT spending as a percentage of revenue for the past three years
has been significantly above the 10-year (2005-2014) average of 4.08%. This may represent a
4
On the other hand, the IT spending levels reported by 535 responding organizations averaged $105.2 million, with
a median of $8.5 million. Assuming that all 717 organizations have about the same average IT spending levels, we
estimate that the sample represents over $75 billion in annual IT spending. The difference in these two estimates is
due to several factors, including that (1) there is a difference between the sample of respondents to the two questions
as indicated by the different number responding to them; (2) in general there is a large variance in the data since
there is a great diversity among the organizations of the responding SIM members as indicated above and in the
Appendix; and (3) they are calculated differently as the $105 million is the average of the budgets reported and the
$288 million is calculated by multiplying average revenue times the average percentage of IT spending as a percent
of revenue (5.145%, which is the average of the individual calculation of this for each respondent who provided
both of the required pieces of data). Reality is likely somewhere between these two estimates.
“new normal”; however, it may also to some extent be indicative of “catch up” IT investments
making up for the lean “Great Recession” years of 2008 to 2010, when both revenue and IT
investment contracted in most organizations (see Figure 13, Figure 15, and Figure 16). This
increase is also being affected by new investments in cloud and shared services, digital
marketing and analytics, and health care informatics, as well as the increasing digitization of
organizations in general.
A. IT Organization Structure
As in previous years, the majority of organizations (71.1%) report having a Centralized IT
organization structure (see Figure 9). This is up from 65.2% last year and above the 9-year
(2006-2014) average of 69.7%. With 717 organizations responding, 28.9% report a
Decentralized/Federated/Hybrid IT structure, down from 35% and below the 2006-2014 average
of 30.3%. Although sample differences from year to year make trend analysis a bit problematic 5,
Figure 9 indicates that centralized structures declined from 2007 through 2012, while
decentralized approaches tracked upward during that period. However, since 2012 centralized
structures have tracked upward while the more-decentralized ones have declined.
Figure 9: IT Organization Structure 2006-2014 (717 responding organizations)
This suggests that IT department structure could be cyclical, and there is some anecdotal
evidence of structure “fads,” with pendulum swings between centralization and decentralization.
But changing IT organization structure is about changing behaviors in the host organization; and
though it can certainly be worthwhile to do so, it is complex, time consuming, and costly. Thus
structure change is not something most organizations do frequently, take lightly, or do simply
because it is fashionable. Plotting the data with the averages, as shown in Figure 10, suggests that
5
For example, this year there are 717 responding organizations, 280 last year, and less than 200 the year before that.
There is also a concern about the precision of the responses given that Weil and Ross noted (albeit a decade ago)
that “our study of almost 300 enterprises around the world suggests that IT governance is a mystery to key decision
makers at most companies. On average, just one in three senior managers knows how IT is governed at his
company.… In this case, ignorance is definitely not bliss. When senior managers take the time to design,
implement, and communicate IT governance processes, companies get more value from IT” (“A Matrixed Approach
to Designing IT Governance,” Sloan Management Review, Winter 2005).
while IT is centralized in most organizations, there is a slow-moving trend toward more

decentralized IT structures and fewer centralized ones. Time will tell whether that is in fact the
case, or if that trend has begun to reverse. On the other hand, this distinction between centralized
and decentralized/federated IT organization structures (as shown in Figure 9 and Figure 10) may
be blurring, as IT governance becomes more federated and IT delivery becomes more
centralized. That is a matter to explore in future SIM IT Trends Studies.
Figure 10: IT Organization Structure with Averages 2006-2014 (717 responding organizations)
B. Role of IT in Strategy and Innovation

New in this year’s Study, some questions were added regarding the role of IT with respect to
strategy and innovation. Respondents were provided with several statements and asked to
identify the degree to which they agreed or disagreed with them on a five-point Likert scale as
indicated at the top of Figure 11, which also summarizes the responses of the most-senior IT
leader in the data set of 717 unique organizations.
Figure 11: IT Alignment, Credibility, and Role in Strategy and Innovation

Neither
Agree
Strongly nor Strongly Don't Average
Disagree Disagree Disagree Agree Agree Know or Score
N =1 =2 =3 =4 =5 N/A (out of 5)
IT leadership is involved in strategic business planning. 717 5.2% 11.7% 12.4% 35.0% 35.7% 0.0% 3.84
IT helps shape business strategy. 614 3.9% 14.2% 18.6% 36.3% 25.9% 1.1% 3.67
IT enables business strategy. 614 1.1% 3.7% 8.6% 45.6% 39.6% 1.3% 4.20
IT & business strategy are done together, as one. 615 8.5% 18.7% 18.9% 34.8% 17.7% 1.5% 3.35
IT is involved in providing innovation. 614 2.6% 6.5% 10.9% 47.1% 31.9% 1.0% 4.00
IT has high credibility with executive leadership. 717 5.4% 9.3% 12.4% 35.8% 36.7% 0.4% 3.89
In my organization IT is aligned with the business. 717 4.0% 6.1% 9.1% 40.2% 40.4% 0.2% 4.07
The average scores for all the questions in Figure 11 are positive (being greater than 3.0), with a
range of 3.35 to 4.2 out of a possible 5.0. When asked about IT leadership’s involvement in the
strategic planning process, the average score is quite positive at 3.84, with 70.7% responding
either Strongly Agree or Agree (35.7% and 35.0%, respectively). However, more than one-sixth
(16.9%) indicate a lack of involvement, with 5.2% answering Strongly Disagree and 11.7%
Disagree that IT leadership is involved in strategic business planning. The average rating of
these senior IT leaders regarding IT’s role in helping to shape business strategy is 3.67, with
62.2% selecting either Agree or Strongly Agree (36.3% and 25.9%, respectively). Still, nearly
19% neither Agree nor Disagree and over 18% responded negatively.
However, when asked about IT’s role in enabling business strategy, over 85% of the responses
are positive, with the average score a very positive 4.2 out of 5.0 possible. Less than 5% of the
responses are negative and 8.6% are neutral. This is the most positive response for the seven
questions in Figure 11. Slightly more than half (52.5%) of the organizations report that IT and
business strategies are developed together. Although undoubtedly positive with an average score
of 3.35, this is lowest of the scores and positive response rates in the table. This is not altogether
surprising since this is the one question most sensitive to organization size. The negative
response rate is 27.2% and nearly 20% are neutral. Respondents were much more sanguine with
respect to IT’s role in providing innovation to the organization, with almost 80% positive (31.9%
Strongly Agree and 47.1% Agree). The average score was an even 4.0, although nearly 11% are
neutral and almost 10% negative.
Interestingly, the credibility of IT with executive leadership mirrored closely the results seen
with respect to IT’s involvement in strategic planning, with an average score of 3.89. This
suggests that the more that IT leadership is involved in the strategic planning process, the more
credibility they build with upper management. However, the opposite may be true; it may be
more likely that their credibility earned them a seat at the strategy table. The majority (72.5%)
of the respondents chose a positive response agreeing that IT has high credibility with executive
leadership; however, nearly 15% are negative and nearly one-eighth are neutral.
With respect to IT’s alignment with the business, over 80% of the 717 responding senior IT
leaders either Strongly Agree or Agree that IT is aligned, with just over 10% responding
negatively, and about 9% neutral. Nevertheless, other C-suite executives appear to be less
positive about IT’s contribution to strategy, innovation, and organizational performance. 6 This
perceptual divergence between IT leadership and many others in the C-suite raises questions
6
Unlike this IT Trends Study, which is limited to SIM members and their organizations, consider the following
quotes from other sources: A 2014 survey of 3500 executives by Forrester found that “a majority of business leaders
think that their IT departments are more of a burden than a help…. CIOs are considered to be gatekeepers; they’re
not seen as innovators or helping with driving new business for the company. The criticism of IT was nearly
unanimous. Among customer service, product development and sales, 79, 78 and 74 percent said respectively, that
IT is not helping them to succeed. Among R&D and marketing managers, 69 and 51 percent say that IT doesn’t
factor into the technology projects that they’re working on” http://formtek.com/blog/it-business-cios-get-no-respect/;
“Only about a quarter [of CFOs] said their IT department ‘has the organizational and technical flexibility to respond
to changing business priorities,’ or ‘is able to deliver against the enterprise/business unit strategy’”
http://www.itbusinessedge.com/cm/blogs/hall/survey-cio-cfo-relationship-still-prickly/?cs=47533; “[O]nly 13% [of
financial executives] view their IT function as transformational (up from 8% in 2012)”
http://www.financialexecutives.org/KenticoCMS/Research/FERF-Files/Survey-Analysis-CFOs-Top-
Imperatives.aspx; “[O]nly 43 percent [of CEOs] say that IT actively collaborates with the business side on
organizational strategy and innovation,” http://www.oneconnectinc.com/blog/the-good-and-bad-news-disparities-
regarding-cio-perceptions/; “[O]nly 32% of CFOs have a close relationship with their CIO”
http://www.computerweekly.com/news/2240227121/Only-32-of-CFOs-have-a-close-relationship-with-their-CIO;
“most CEOs still regard their CIOs as itinerant specialists.… Few thought they would move on to a business
leadership role,” Mark Raskino & Jorge Lopez (2012). CEO Survey 2012: The Year of Living Hesitantly, Gartner
Group, http://www.gartner.com/newsroom/id/1984416; “Almost half of CEOs feel IT should be a commodity
service purchased as needed [… and] rate their CIOs negatively in terms of understanding the business and
understanding how to apply IT in new ways to the business,” Jim Stikeleather (2013) “The IT Conversation We
Should Be Having,” HBR Blog Network, April 25, http://blogs.hbr.org/2013/04/corporate-it-and-the-conversat/.
about how IT leaders are defining “alignment” and how thoroughly they understand the goals
and requirements of their organizations.
Figure 12: IT is Aligned with the Business (717 unique organizations)
C. IT Budgets and Staffing Trends

i. IT Budgets and Spending Trends
Economic conditions have a significant impact on IT budgets. As indicated in Figure 13, prior to
the “Great Recession” (2004-2007), the majority of organizations reported increasing IT budgets.
However, as the economy slowed in 2008 only 46% of respondents reported an increase in IT
budgets; and in 2009 only 25% of organizations reported increases, with 75% of the respondents
indicating that their IT budgets had remained flat or decreased. Things tentatively improved in
2010 with 34% reporting increases, but 66% still indicated flat or decreasing IT budgets from the
prior year.
In 2011 the trend improved further with 56% of the respondents reporting increasing IT budgets,
27% flat, and only 17% decreasing (less than half of the 2010 rate of decreases). The percent of
organizations reporting increases pulled back a bit in 2012 with nearly 48% of organizations
seeing budget increases and 34.5% decreases. In last year’s SIM IT Trend Study, 61% of the
respondents reported increasing budgets; and when respondents were asked to forecast budgetary
changes for this year, they accurately predicted a slight improvement.
Figure 13: Change in IT Budget from Previous Year (2004 to 2014 actual, 2015 projected)
This year, the number of organizations reporting IT budget increases is 62.9%, up slightly from
last year’s 61% and above the 2005 high of 62.5%. Organizations with budget allocations
remaining flat are up slightly to 12.7% and decreasing budgets are down from 27% to 24.4%.
However, when asked to project next year’s IT spending, the outlook of these senior IT leaders is
more pessimistic. Only 52.4% of organizations anticipate an IT budget increase in 2015. This
represents a 16.7% decline in the number of organization’s currently reporting budgetary
increases. Moreover, 17.3% (36% more than this year) are projecting flat budgets and 30.3%
anticipate a decrease in IT spending (nearly 25% more than this year). This could be a signal of
increasing economic uncertainty, an anticipated overall weakening in the broader economy, or
the end of the “catch up” period in IT investments making up for the lean investment years early
in the Great Recession.
ii. IT Budget Allocations

Since 2009 when the SIM IT Trend Study first began gathering IT budgetary data, the survey
focused on two major categories: people and things. These two categories were then further
subdivided into In-House, Outsourced, Foreign, and Domestic spending. However, this
approach could not properly track the increasing IT budget outlays that were going to cloud-
based services that combine people and things into a single expense 7. Therefore, this year we
separated location, sourcing, and budget allocation into separate questions and added a new
budget category for “Services (SaaS, PaaS, IaaS, cloud, processes, etc.).” These changes expand
the precision and granularity of the data collected and provide improved analytical capabilities as
well. However, this does make comparisons to prior years a bit problematic
Overall, with 512 organizations reporting, IT budgets are up 1.88% this year, with a median
increase of 2.0%. IT spending is expected to grow next year, but at a slower pace with 485
7
In last year’s IT Trends Study, it was reported that 26.5% of all IT services and solutions were cloud-based:
12.1% delivered via internal/private clouds and 14.4% via public/external ones (Kappelman, L. A., McLean,
E. R., Luftman, J., Johnson, V. (2013) Key Issues of IT Organizations and Their Leadership: The 2013 SIM IT
Trends Study, MIS Quarterly Executive, 12(4), 227-240).
organizations projecting an average increase of 0.91%, with a median of 1.0%. But this
projected change is not evenly distributed across all budget categories. This year, for the first
time, respondents were asked to report the allocation of their current year’s IT budget and
forecast next year’s IT spending in the following seven categories: “Hardware, Software,
Facilities (including supplies and consumables), Employees, Consultants, Contractors, [and]
Services (SaaS, PaaS, IaaS, cloud, processes, etc.)”. The results are shown in Figure 14.
Figure 14: IT Budget Allocations 2014 Actual and 2015 Projected (n = 366)
% Allocated to Category
Projected Percent Projecting
Change 2015 Allocations Will:
2014 2015 2014-
Budget Categories Actual Projected 2015
Decrease Flat Increase
Hardware 15.7% 15.4% -0.3% 25% 66% 10%

Software 17.9% 17.6% -0.3% 18% 67% 14%
Facilities (including supplies and consumables) 5.6% 5.4% -0.2% 13% 82% 5%
Employees 38.5% 38.8% 0.3% 13% 68% 19%
Consultants 6.5% 6.1% -0.4% 12% 77% 11%
Contractors 5.8% 5.4% -0.4% 12% 81% 7%
Services (SaaS, PaaS, IaaS, cloud, processes, etc.) 10.1% 11.3% 1.2% 6% 68% 26%
While overall IT budgets are expected to rise, spending contractions are predicted in all
categories except Employees and Services. Not surprisingly, most of the increase is expected to
go to a larger allocation for Services, presumably in large part to the Cloud, since Facilities,
Consultants, and Contractors are now separate categories. The increase in spending for
Employees is consistent with their projections that both total and average IT salaries will also
rise next year about 1.3% (with medians for both at 2.0% and with 480 and 474 organizations
responding respectively). Yet despite the positive message in theses averages, Figure 14 makes
clear that the vast majority of these senior IT leaders (66% to 82%) expect IT budget allocations
in all categories to remain flat next year in their respective organizations, with more
organizations decreasing than increasing in every category, except as noted Employees and
Services.
More than twice as many respondents expect a decrease in Hardware allocations next year (25%
versus 10%), but two thirds are predicting no change at all. Similarly, more than eight out of ten
project flat expenditures on Facilities; while a mere 5% anticipate an increasing allocation. The
projections for Contractors, Consultants, and Software are similarly down, though generally
more positive than the outlook for Hardware. Even next year’s anticipated budget bright spots
for Employee and Services, show only 19% and 26%, respectively, of organizations expecting
increases, while the rest are flat or down.
As for how these numbers stack up against the data from 2009 to 2013 8, the people-related
budget categories (Contractors, Consultants, and Employees) align fairly well when the
Domestic and Offshore subcategories from prior years are combined for each category. Since
Hardware, Software, and Facilities were combined in prior years, and then subdivided into In-
House, Outsourced, Domestic, and Offshore this year, adding them all into a single number and
8
For details about the budget allocations previously used in the IT Trends Study, see last year’s report in
Kappelman, L. A., McLean, E. R., Luftman, J., Johnson, V. (2013) Key Issues of IT Organizations and Their
doing the same with this year’s Hardware, Software, and Facilities categories, also yields a
reasonably comparable situation. The results of this are show in Figure 15.
Figure 15: 2009-2014 IT Budget Allocation (Actual) and 2015 Projection

2009-14
average
2009-
2015 adjusted 2014
Projected 2014 2013 2012 2011 2010 2009 to 100% 9 Average
Employees 38.8% 38.5% 40.3% 40.0% 40.0% 46.0% 43.0% 38.1% 41.3%
Contractors 5.4% 5.8% 9.5% 11.0% 5.0% 12.0% 12.0% 8.5% 9.2%
Consultants 6.1% 6.5% 3.1% 9.0% 11.0% 10.0% 12.0% 7.9% 8.6%
Hardware, Software, Facilities 38.4% 39.2% 47.1% 40.0% 44.0% 32.0% 33.0% 36.2% 39.2%
Cloud Services 11.3% 10.1% 9.3% 10.1%
Albeit an imperfect mapping, especially since there is no way to calculate what amount in prior
years should go into the new Services category, some insights can be gleaned from this analysis.
Not surprisingly, in light of the inclusion of this new category, every spending category except
“Things” (i.e., the combined Hardware, Software, and Facilities category) is below its 6-year
(2009-2014) average, and spending on Things is only at its average. Even when weighing the
six-year (2009-2014) averages so that they total to 100%, this year only the Employees and
Things are above their averages; and this holds true for next year’s projections as well. This may
be unexpected since one would reasonably expect that spending on things like Hardware,
Software, and Facilities would contract when cloud-based services increase. However, with
31.1% of all IT services and solutions cloud-based this year (up from 26.5% last year) and about
55% of that delivered via public/external capabilities (about the same as last year’s 54.3%), that
leaves nearly 83% all IT services and solutions delivered via in-house capabilities. A graph of
the data series in Figure 15 is shown in Figure 16.
Figure 16: 2009-2014 IT Budget Allocations (Actual) and 2015 Projection, with Trendlines
50%
40%
Employees 30%
Hardware, Software, Facilities
Contractors
Consultants 20%
Cloud Services
10%
0%
2009 2010 2011 2012 2013 2014 2015
Projected
9
For details about the budget allocations previously used in the IT Trends Study, see last year’s report in
Kappelman, L. A., McLean, E. R., Luftman, J., Johnson, V. (2013) Key Issues of IT Organizations and Their
Recall that these data represent the relative amount (out of 100%) of the average IT budget going
to these different categories, not the absolute amount of money actually being spent. In fact, the
budget of an individual organization, as well as the total for all organizations as a whole, could
be increasing or decreasing while the percent of those budgets going to different categories
would always total 100%. So Figure 14, Figure 15, and Figure 16 represent the relative amounts
going into each budget category. Thus it is noteworthy that only the relative amounts of
spending on the Hardware, Software, and Facilities category is rising during this period, while
the others are contracting as a relative percentage of the total. And that trend may have turned in
the past few years too.
However, given the very low IT spending levels, especially on capital investments during 2009,
but also in 2010, as shown in Figure 13 and Figure 15, one would expect some spending is still
taking place to “catch up” on replacements and upgrades. Add to this all the new investments in
electronic medical records, marketing management, analytics, big data, the Internet of things,
and countless other technologies (see Figure 4 for a list of the largest IT investments this year
and those of the previous decade), it is no wonder that IT spending on Things, as opposed to
People, has been growing. Nevertheless, as indicated in Figure 16, spending on IT Things has
fallen below the trendline this year for the first time since 2010, and is predicted to continue
downward next year. Going forward, separately tracking these three categories of Things
(Hardware, Software, and Facilities), in combination with the new Cloud Services category, will
make possible a better understanding of actual IT spending patterns in this time of change.
iii. IT Staffing and Salary Trends
a. IT Employees and Their Salaries

In order to provide greater insight into IT personnel practices, IT staffing is another area that was
refined and expanded considerably in this year’s IT Trend Study. The average number of “full-
time IT employees (IT FTEs, not including contractors or consultants)” who “report under or to
the top IT person” is 342, with the senior-most IT leader in 648 unique organizations responding.
Despite this high average, nearly 70% of respondents reported 100 IT FTEs or less. Given the
diversity among responding SIM member organizations, it is also noteworthy that the median is
40, and the range is from one to 21,000. Moreover, 40.6% have 25 or fewer IT FTEs, 28.4%
between 26 and 100, 21% between 101 and 500, and only 10% 501 or greater.
On average 10.44% of these IT FTEs are “located outside your home country (i.e., offshore).”
Interestingly, this includes the nearly two-thirds of the 648 responding organizations (65.1%)
reporting that none of their full-time IT employees work outside of their home country, and over
76% report 10% or less. Moreover, 11% report that between 1% and 10% work offshore, 12.8%
between 11% and 20%, 4.8% between 21% and 50%, and 6.3% report that between 51% and
100% are based outside the organization’s home country. Thus it is not surprising that the
median is zero and the standard deviation more than twice the average at 20.96%.
Nearly forty-six percent (45.7%) of the 508 organizations that responded report an increase in
the number of internal IT employees this year and only 21.1% report a decrease, while 33.3%
report no change at all. This is very similar to the numbers reported in last year’s SIM IT Trend
Study. On average, internal IT employment rose 0.9% (median 0%, standard deviation 4.2%).
Looking to next year, the outlook for 2015 is fairly consistent with 2014. Nearly forty-seven
percent (46.7%) of the 486 organizations responding anticipate an increase in staffing, while
only 23.5% anticipate staffing reductions, with 29.8% expecting no change. The average
projected increase is 0.7% (also with a median of 0% and a standard deviation of 3.8%).
Ninety-three percent of the 499 organizations responding report that average IT salaries either
remained flat or increased in 2014, with 79% reporting increases and 14% reporting no change.
This is down from last year, when 89% reported increases and 7% reported no change. This
year, 7% reported average salaries decreasing, which is up from the 4% reported in last year.
The average increase reported this year is 2.03%, with a standard deviation of 2.3% and a
median of 2%. Looking forward, the outlook is less positive, yet still bright with 69.8%
anticipating increases in average IT salaries and 9.5% expect salaries to remain flat.
Nevertheless, 20.7% anticipate decreases in the average IT salary in 2015. The average increase
projected for next year is 1.32% with a standard deviation of 2.8% and a median also of 2%.
Figure 17: Change in Number of Internal IT Employees

(2013-14 actual, n = 508; 2014-15 projected, n = 486)
The data indicate a similar situation for total IT salaries. Nearly 78% of responding
organizations report an increase in total IT salaries this year, while only 11% report a decrease
and 11% no change. However, looking forward to 2015, only 67.9% forecast an increase in total
IT salaries and 22.9% forecast a reduction. The average increase in total IT salaries this year is
2.13%, with a standard deviation of 3.1. As with their average salary projection for 2015, it is
expected that total IT salaries will increase on average only 1.3%, with a standard deviation of
3.4%. Still, the IT employment outlook of these senior IT leaders is positive; but cautiously so,
and consistent with their IT budget projections for 2015, which anticipate an overall average
increase of 0.91%, (as reported above) and small increase of 0.80% in the percent of IT budget
spent on “IT employees” (as per Figure 15 above).
b. IT Contractors and Consultants

The average number of contractors and consultants utilized by the 476 responding organizations
is 63.7, but the median is only five and the standard deviation is a large 257. Nearly 20%
(19.3%) of the 476 organizations report utilizing no contractors or consultants at all, 36.1%
reported between one and five, 12.2% reported between six and ten, 19.7% reported between 11
and 50, and 12.6% reported over 50. More importantly, the IT budget projections of these senior
IT leaders are less sanguine when it comes to contractors and consultants in 2015. As also
indicated in Figure 15, they project rather large decreases in the percent of IT budget going to
both contractors and consultants, decreases of 6.9% and 6.2%, respectively. Still, 42.6% of 491
responding organizations report an increase in the number of contractors and consultants this
year when compared to last year; only 21% report a decrease and 36.1% report no change.
Looking to 2015, the outlook is similar, with 40.2% projecting an increase in the number of
contractors and consultants, 23.7% projecting a reduction, and 36.1% anticipating no change.
The size of the average increases are small, however, with this year only 0.78% above last year,
and a projected average increase in 2015 of only 0.53% in the number of contractors and
consultants.
Since the calculation of the average increase or decrease does not take into account the number
of contractors and consultants employed by an organization, the decreases projected in Figure 15
may be more indicative of what is to come. Moreover, the cost of a contractor or consultant can
be highly variable, depending on the providers and their locations. Currently, only 14.8% of
contractors and consultants are reported as “located outside your home country (i.e., offshore)”
with 67.2% reporting none offshore at all, 21.4% between 1% and 50%, and only 11.3% of the
476 organizations responding indicate that more than 50% of their contractors and consultants
are located offshore.
c. Turnover and Retirements, Education and Training

Last year we saw a significant (greater than 25%) increase in the IT turnover rate over 2012.
That trend continues, as this year’s turnover rate for full-time IT employees is 8.97%, up more
than 36% over last year. As indicated in Figure 18, with 539 senior IT leaders responding, this is
the highest IT turnover rate since the Study began tracking it in 2006, and well above the nine-
year average rate of 6.26%. Moreover, the 8.97% average rate includes nearly 22% of the 539
unique organizations reporting a zero turnover rate.
Figure 18: Full-Time IT Employee Actual Turnover Rate 2006-2014
Increasing average turnover rates are often seen as an indication of an improving job market,
with more job opportunities inducing some employees to consider switching employers;
although retirements and other factors could also be at play. In order to better understand this,
respondents were also asked what percentage of their turnover rate was “involuntary (i.e., the
result of downsizing, layoffs, terminations, etc.)” or “voluntary (i.e., quitting, retirements, etc.).”
For the 419 organizations reporting more than zero turnover, their average voluntary turnover
accounted for nearly twice the involuntary turnover rate, 66.55% versus 33.45%. Using this
ratio, one could estimate that this year about 5.97% of turnover is voluntary and 3.0% is
involuntary. This further supports the premise that turnover is being heavily driven by voluntary
movements in the job market.
What about voluntary turnover due to retirements? For the first time last year, senior IT leaders
were also asked to estimate “what percentage of the IT employees in your organization (IT
FTEs) are going to retire within the next five years?” Surprisingly, in light of baby boomers
reaching retirement age 10, the average five-year retirement estimate in 2013 was 5.46% (or about
1.09% per year on average), with 32% predicting 1% or less of their IT employees retiring over
the next five years. This year, the average increased more than 26.6% to 6.91% (or about 1.38%
per year on average), with over one third (33.6%) of the 471 responding organizations predicting
zero retirements in the next five year, 28.2% predicting 5% or less, and 20.4% predicting more
than 10%. Again, this is somewhat surprising in light of our alleged aging workforce; but
perhaps, the IT workforce is actually younger than we thought or aging boomers plan to work
longer. Using the estimate that 1.38% of the voluntary turnover rate is due to retirements, then it
appears that the remaining 4.59% of the 5.97% voluntary rate (or about half of the 8.97% total
turnover rate for IT FTEs this year) is due to IT employees moving to what they believe are
better employment opportunities.
Investments in employee education and training are believed to be an effective way to increase
the retention of IT workers. Increasing investment in IT training has historically been seen as an
indicator of an improving IT employment picture. In last year’s IT Trends Study, spending on IT
education and training increased a significant 63% over the previous year to 4.68%, and more
than 1% above the 2009-2013 average of 3.47%. As indicated in Figure 19, this trend continues
this year as 537 organizations report that on average 4.99% of their IT budgets are allocated to
education and training. This further supports the notion of a bright IT job market, driven by
increasing investments in information technologies, increasing IT budgets, and IT skill shortages,
coupled with only moderate increases in IT salaries and CIOs losing sleep over this skills gap.
Thus it is not surprising that we see increasing investments in the education and training of IT
workers in order to increase retention and reduce voluntary turnover.
Figure 19: Percent of IT Budget Spent on Training and Education
10
“Roughly 10,000 Baby Boomers will turn 65 today, and about 10,000 more will cross that threshold every day for
the next 19 years,” http://www.pewresearch.org/daily-number/baby-boomers-retire/, December 29, 2010.
D. Use of Cloud, Shared Services, Service Catalogs, and Chargebacks

i. Cloud-Based IT Services and Solutions
Last year questions were added to determine “what percentage of ALL IT services is delivered to
your organization through either a public or private “cloud”? These questions were included and
expanded upon in this year’s Study in one of the optional sections of the questionnaire.
Although it appears anecdotally that cloud-based delivery of IT services and solutions is
increasing, with the addition of these questions, we will be better able, in future SIM IT Trends
Studies, to understand empirically the strength of this trend. This is important since over 10% of
IT spending this year is going to cloud-based services, presumably from external providers, with
significant growth projected into next year, as indicated above in Figure 15.
In this year’s Study, organizations on average deliver 31.1% of all their IT services via the cloud,
up from 26.5% last year. The distribution is somewhat u-shaped and skewed to the left (as
indicated in Figure 20), with a median of 19% and a standard deviation 31.7%. Of the 528
organizations responding to this use-of-cloud question, 90.5% indicate that they utilize “the
cloud” to some extent, up from 81% in 2013. More than one-third (33.9%) obtain more that 30%
of all IT services via the cloud, up from 27% in 2013; nearly one-fourth (23.5%) obtain more
than 50%, while almost 42% (41.7%) obtain 10% or less of all IT services via the cloud, which is
down nearly 18% from 51% last year. Clearly, the use of cloud-based capabilities to deliver IT
services and solutions is growing.
Figure 20: Distribution of Organizations by Percent of IT Delivered by Cloud (n = 528)
The 478 respondents who indicated that they utilized cloud-based services to some extent were
then asked “what percentage of the cloud-based IT services are provided in each of the following
[two] categories” (which were required to total 100%): “internally/private cloud,
externally/public cloud.” Of the 405 respondents who answered this question, 52.1% indicated
some combination of internal and external cloud, 35.2% indicated external only, and 12.7%
indicated internal only. On average, 45% of cloud-based IT is delivered via internal private
cloud-based capabilities and 55% via external capabilities. Therefore, with 31.1% of all IT
services and solutions being cloud-based this year, and about 55% of this being delivered via
external capabilities, then nearly 83% all IT services and solutions currently are being delivered
via in-house capabilities.
Despite the fact that more than half of the respondents indicate that they use a combination of
public and private clouds, it appears that organizations tend to rely more on one or the other. So,
of the nearly two-thirds of the organizations that utilize internal private clouds to some extent
(261 of 405), 67% indicate that more than 50% of their cloud-based IT is provided in-house, and
almost 59% indicate that it is more than 70%. Of the nearly 87% that report using external
public clouds to some extent (352 out of 405), more than 55% report that more than 50% of their
cloud-based IT is delivered via external public clouds, and almost 51% indicate that it is more
than 70%.
The respondents were also asked to indicate what “percentage of the external cloud-based IT
services are provided in each of the following categories: Software as a Service (SaaS), Platform
as a Service (PaaS), Infrastructure as a Service (IaaS), and Process as a Service.” Again, each
respondent’s answer was required to total to 100%. The results are shown in Figure 21. The
vast majority (77.7%) use SaaS, with far fewer utilizing IaaS (27.7%), PaaS (18.5%), and
Process-aaS (6.5%). Interestingly, 2.7% selected “other” and provided suggestions to improve
next year’s questionnaire. Not including those who do not use a particular cloud capability at all
in the averages (as shown in Figure 21), those who use SaaS use it for 75.5% of their external
cloud capabilities, IaaS for 12.2%, PaaS for 7.4%, and 3.3% for Processes. Given that on
average 17.1% of all IT is external cloud-based (55% of the 31.1%), then (as shown in the
bottom row of Figure 21) about 12.9% of all IT services and solutions are external SaaS
delivered, 1.3% PaaS, 2.1% IaaS, and 0.9% as Process services or Other.
Figure 21: Percentage of External Cloud-Based IT Services Delivered In These Categories.

SaaS PaaS IaaS Pr-aaS Other
% of those using it at all 77.7% 18.5% 27.7% 6.5% 2.7%
Average utilization (including those with zero use) 62.4% 6.1% 10.1% 2.7% 1.3%
Average utilization of those using it 75.5% 7.4% 12.2% 3.3% 1.6%
Average of all IT delivered this way 12.9% 1.3% 2.1% 0.6% 0.3%
ii. Shared Services for IT Delivery

Respondents were also asked “What percentage of ALL IT services are delivered as a ‘shared
service’ to your organization?” With 452 senior IT leaders responding, 83.4% indicated that
their organizations deliver some level of IT shared services. This is a significant increase from
the 70.1% reported last year. As indicated in Figure 22, the average amount of all IT services
delivered as shared services this year is 46.9%. The distribution in the figure is plainly u-shaped,
with a median of 40 and a large standard deviation of 38.3%.
Figure 22: Distribution of Organizations by Percent of IT as Shared Service (n = 452)
Respondents who indicated that some IT is delivered as a shared service, were then asked what
percentage of those services were delivered via either an “internal/private cloud” or an
“external/public cloud.” Responses from 267 organizations, as shown in the similarly u-shaped
Figure 23, indicate that on average 62.2% of IT shared services are hosted internally (median
80%, standard deviation 40.7%) and 36.1% externally (median 20%, standard deviation 40.2%),
with “other” providing the remaining 1.7%. Interestingly, 22.1% don’t use internal capabilities
at all and 30.7% don’t use any external capabilities for IT shared services. Over one-third
(34.8%) deliver 90 to 100% of their shared services via internal private systems and 77.9% use
internal capabilities to deliver at least some of their IT shared services. Not surprisingly, the use
of an external capability for IT shared services delivery was lower, with only 21.7% reporting 90
to 100% utilization and only 69.3% of respondents reporting at least some use of external
delivery capabilities.
Figure 23: Delivery of IT Shared Services – Internal versus External Capabilities (n = 267)
iii. Service Catalogs and Chargebacks

In this year’s SIM IT Trend Study, new questions were added related to the use of service
catalogs and chargebacks. Specifically, on a five-point scale, respondents were asked to what
degree they agree or disagree with the following statements: “We have an IT services catalog”
and “We charge users for the IT services that they consume.” Results from the 615 respondents
are shown in Figure 24, which also includes the scale from one to five used in the calculation of
average score.
Figure 24: The Use of Service Catalogs and Chargebacks (n = 615)

Neither
Agree
Strongly nor Strongly Don't
Disagree Disagree Disagree Agree Agree Know or Average
=1 =2 =3 =4 =5 N/A Score
In my organization we have an IT services catalog 21.3% 25.2% 13.8% 25.9% 10.4% 3.4% 2.78
We charge users for the IT services they consume. 38.7% 22.1% 11.9% 17.7% 7.0% 2.6% 2.30
Interestingly, although tilted toward Disagree with an average score of only 2.78 out of 5.0
possible, the results are somewhat divided for the use of IT services catalogs, with 46.5%
selecting either Strongly Disagree or Disagree and 36.3% either Strongly Agree or Agree. This
dichotomy can be seen in Figure 25, with the remaining 17.2% selecting either neutral (i.e.,
“Neither Agree nor Disagree”) or indicating that they did not know.
Figure 25: In my organization we have an IT services catalog (n = 615)
With respect to charging users for IT services, with an average score of only 2.3 out of 5.0, this
practice is less common than IT services catalogs. Only 24.7% Strongly Agree or Agree that
they utilize chargebacks, while 60.8% Strongly Disagree or Disagree. As evidenced in Figure
26, the results are strongly skewed toward not using chargebacks.
Figure 26: We charge users for the IT services they consume (n = 615)
"The first responsibility of a leader is to define reality; the last is to say 'Thank
you.' In between the two, the leader must become a servant." – Max De Pree
IV. CIO Reporting Relationships, Time Allocation, Background, Tenure and

Performance Measurement
The 717 unique organizations provide insights into what the IT organization is doing and how it
is performing and interacting with the business. To better understand the role and activities of IT
leaders in organizations, we turn to the data set consisting of the 451 people who responded that
they are the “top IT person (e.g., the ‘CIO’)” in their organizations. Hereafter, we will refer to
them as the “top IT executive” or the “CIO.” This data set contains 47 CIOs (10.4%) who do not
consider themselves as “IT employees,” but who never the less identified themselves as the top
IT person. This CIO data set also includes 23 people who are not included in the 717 unique
organizations data set since their organizational affiliation is not known.
A. CIO Tenure
The average time these 451 CIOs have been in their current position increased this year by over
4% from last year, from 5.20 to 5.41 years (see Figure 27). The average tenure since 2006 is
4.75 years, up from last year’s average of 4.66 years. Overall, CIO tenure appears to be on an
upward trend over the last decade. This trend is confirmed by other studies; although, CIO job
tenure varies across studies 11. The 451 respondents in this year’s Study reported longer tenure as
CIO than any year in the last nine, except for 2012. The median CIO job tenure increased this
year from 3.55 years to 4.0 years. The average total organization tenure of the top IT person is
8.26 years, with a median of 6.0 years; both of which are very similar to last year’s results.
Figure 27: Average Job Tenure of CIOs (2006-2014) (n = 451 CIOs)
11
As of July 2014 http://www.ejobdescription.com/IT_Salary_Survey.html reports CIO tenure at 4.33 years. In
January 2014 CIO magazine reported it at 5.92 years http://fedscoop.com/survey-2014-brings-challenges-wind-shift-
cios/.
In terms of distribution, it is worth noting that nearly half (49.4%) of the CIOs have been in their
current position for less than four years, 38.1% for less than three years, and nearly one fourth
(24.6%) for less than two years. On the other hand, 36.8% have been in their current position for
six years or more, nearly one sixth (16.3%) for ten years or more, and 7.3% for 15 years or more.
B. CIO Reporting Relationships

The role of the CIO is thought to be shaped by to whom the CIO reports; although it is unclear to
what extent and in what way formal reporting relationships are related to CIO focus and job
activities 12. Nearly 45% (44.2%) of the responding top IT executives report directly to their
CEO, more than a fourth (25.7%) report directly to their CFO, and about 15% of CIOs report to
their organization’s COO (see Figure 28). Nearly a tenth (9.4%) of CIOs report to the leadership
of a “business unit, function, or department executive.” But all of this year’s responses are
similar to their averages over the past ten years; moreover, year-to-year variability due to sample
differences are to be expected, but do seem to be leveling out over the last two years as the
sample size increased.
Figure 28: To Whom the CIO Reports, 2005-2014 by percentage of respondents

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Avg.
CEO 43% 45% 31% 43% 46% 44% 49% 43% 44.7% 44.2% 43.3%
CFO 22% 25% 29% 28% 24% 31% 32% 27% 27.1% 25.7% 27.1%
COO 21% 16% 22% 14% 14% 11% 12% 19% 14.4% 15.0% 15.8%
Business Unit Executive 6% 9% 7% 3% 9% 4% 5% 10% 9.2% 9.4% 7.2%
Other 9% 5% 10% 12% 7% 10% 2% 2% 4.6% 5.8% 6.7%
n = # of responding CIOs 284 448
Graphing the data in Figure 28 with a trendline, as shown in Figure 29, suggests that there is a
slow moving trend of an increasing percentage of CIOs reporting to CEOs, CFOs, and business
unit executives, and a decreasing percentage reporting to COOs and others. Other studies
confirm increases for CIOs reporting to CEOs 13, but such trends, if present, do not appear
particularly strong.
12
Laplante & Bain (2005), “The Changing Role of the CIO: Why IT Still Matters,” IT Professional, 7(3), 45-49 and
Smaltz, Sambamurthy, & Agarwal (2006), “The Antecedents of CIO Role Effectiveness in Organizations: An
Empirical Study in the Healthcare Sector,” IEEE Transactions on Engineering Management, 53(2), 207-222 found
CIO reporting relationships to be unrelated to CIO job activities; however, Carter, Grover, & Bennett (2011), “The
Emerging CIO Role of Business Technology Strategist,” MIS Quarterly Executive, 10(1), 19-29 did find a
relationship between to whom CIOs report and the focus and activities of CIOs.
13
In CIO magazine’s “State of the CIO 2014,” Kim Nash reports that “44 percent of CIOs report to the CEO, up
from 39 percent last year” http://www.cio.com/article/2380234/cio-role/state-of-the-cio-2014-the-great-schism.html.
Figure 29: To Whom the CIO Reports, 2005-2014 by percentage of respondents
This year, a new question, only for CIOs, asked to what extent do they agree (on a five-point
scale) with the statement “I am on the top management team that makes strategic business
decisions.” As shown in Figure 30, the average score is high at 4.1 out of a possible 5.0, with
364 CIOs responding. More than three-fourths (76.6%) confirm that they do have a seat at the
business strategy table, over half (55.2%) Strongly Agree with the statement, and only 13.8%
indicate they do not participate in business strategy
Figure 30: CIOs with a Seat at the Strategy Table (n = 364 CIOs)
Neither
Agree
Strongly nor Strongly Don't
Disagree Disagree Disagree Agree = Agree = Know Average
=1 =2 =3 4 5 or N/A Score
I am on the top management team that
makes strategic business decisions. 4.7% 9.1% 8.8% 21.4% 55.2% 0.8% 4.14
C. CIO Previous Employment

All 451 CIOs responded to this question regarding their prior position before becoming the top
IT executive in their current organizations. Overwhelmingly, CIOs still come from a prior IT
position (89.8%); but this is down a little this year from the five-year average of 91.2% (see
Figure 31). More significantly, there appears to be an important change in the organization from
where CIOs are hired.
Figure 31: CIO Prior Employment (2010 to 2014) with Subtotals (n = 451 CIOs)
5-year
2014 2013 2012 2011 2010 Average
IT, same organization 27.5% 32.0% 36.6% 31.3% 38.0% 33.1%
IT, outside organization 62.3% 59.0% 53.5% 61.6% 54.0% 58.1%
Non-IT, same organization 2.9% 5.0% 5.0% 4.0% 4.0% 4.2%
Non-IT, outside organization 7.3% 4.0% 5.0% 3.0% 4.0% 4.7%
Outside organization 69.6% 63.0% 58.4% 64.6% 58.0% 62.7%
Same organization 30.4% 37.0% 41.6% 35.4% 42.0% 37.3%
Prior IT position 89.8% 91.0% 90.1% 92.9% 92.0% 91.2%
Prior non-IT position 10.2% 9.0% 9.9% 7.1% 8.0% 8.8%
As has been the case since the IT Trends Study began asking this question five years ago, the
majority of CIOs (69.6% this year) came from another organization; but this is up from 58.4%
just two years ago and from 63.0% last year (see Figure 31 and Figure 32). The 2010-2014
average for this is 58.1%. Before becoming the top IT person in their current organization,
62.3% were in an IT position in another organization (up from 53.5% two years ago) and 27.5%
were in an IT position in their current organization (down from 36.6% two years ago). It
remains to be seen how this increase in the percentage of CIOs coming from an outside
organization plays out over time, but it has certainly been a strong trend over the past few years.
It also appears that more CIOs are being hired from prior non-IT positions, at 10.2% this year, up
from 9.0% last year and above the five-year average of 8.8%. Perhaps more importantly, and
confirming the trend of more hiring from outside the organization, 71.6% of this year’s 10.2%
came from a non-IT position in an outside organization, which is far above the five-year average
of 51.8%.
Figure 32: CIO Prior Employment (2010 to 2014)
Bottom line, 69.6% of CIOs came from another organization, 30.4% were promoted from within,
89.8% came directly from a prior role in IT, and 10.2% were hired from a prior non-IT role. As
Figure 32 indicates, over the past several years there has been a significant increase in CIOs
being hired from outside their current employer, and a commensurate decrease in those being
promoted to CIO from within, regardless of whether they were in a prior IT position or not.
D. Performance Measurement for CIOs

The investigation of IT performance metrics was added to the SIM IT Trends Study in 2012 in
order to gain a better understanding of how IT is being assessed and measured. This year
respondents were provided a list of 32 metrics (up from only 14 last year, see Appendix for
details) and asked to separately “select up to three (3) of your organization’s most important
performance measures for … internal IT, outsourced IT, and your own performance.” The
personal performance question was added this year for the first time. In this section of the
report, the focus is on CIO performance measurement using the data set of 451 top IT executives,
all of whom responded to these questions.
Figure 33 shows the percent of the 451 CIOs selecting each metric in each of the three
categories, and the rankings for each metric in each category too. The table is sorted by the
rankings of the CIO’s job performance measures. It also includes, in the left-most column, a
“focus” code to one of three groups of metrics: IT, Business Operations, and Strategic. No trend
can be discerned, of course, since this is the first time these CIO performance measures data are
available; nevertheless, some important findings are in evidence.
Examining the CIOs’ top 10 most selected performance measures, as shown in Figure 33, notice
that only three focus on IT, while the other seven are business focused. Equally, if not more
important, four of these top 10 are strategic, including three of the top four, as well as the top
one: “Value of IT to the business” (selected by over 40%). Since performance measurements are
tied to incentives and deliverables, this points to the current overall strategic and business focus
of these CIOs, a good thing indeed. Thus it is not surprising that 54.6% of the 383 CIOs
responding to the statement “I am on the top management team that makes strategic business
decisions” (in the first optional Bonus section of the questionnaire) answered “Strongly Agree”
and 20.9% more answered “Agree,” while only 14.1 chose “Disagree” or “Strongly Disagree,”
with an average score of 4.12 out of a possible five (see details above in Figure 30).
Rounding out the top five for CIOs are second ranked “User satisfaction” (29.9%), “IT’s
contribution to strategy” (at third with 27.7%), fourth ranked “Innovative new ideas” (20.2%),
and number five “Availability,” which is the only IT-focused performance measure to appear in
the top five for CIOs, selected by nearly 19% of the respondents. Also note that “Availability” is
the top ranked metric at number one for both Internal and Outsourced IT, selected by 36.4% and
25.7% respectively, indicating, as expected, that they are both more IT focused than these top IT
executives. Moreover, although the performance of the IT department under a CIO’s purview is
still important to their overall evaluation, with only three IT-centric performance measures in
their top 10, it appears the CIOs are largely evaluated on their overall contribution to the
organization.
Figure 33: CIO Performance Measures (with Internal & Outsourced IT Metrics)
Used for: My Personal Internal External
% % %
Focus Performance Measures selecting Rank Rank selecting Rank selecting
S Value of IT to the business 40.80% 1 3 27.49% 10 9.76%
B User satisfaction 29.94% 2 2 32.82% 7 15.52%
S IT's contribution to strategy 27.72% 3 9 10.64% 21 1.77%
S Innovative new ideas 20.18% 4 16 7.10% 16 4.21%
I Availability 18.63% 5 1 36.36% 1 25.72%
I Projects Delivered on Time 17.74% 6 4 23.28% 2 21.29%
I IT Cost controls 13.30% 7 8 12.42% 6 17.07%
B Productivity improvement 12.20% 8 6 14.19% 11 9.09%
B Business Cost Reduction Controls 9.53% 9 10 7.98% 8 10.64%
S Revenue Growth 9.53% 9 15 7.32% 28 0.67%
I Projects delivered on Budget 9.31% 11 7 13.30% 5 17.52%
B Projects ROI 8.20% 12 12 7.76% 14 6.43%
B Improved decision making 7.54% 13 18 4.88% 24 0.89%
B Total Cost of Ownership 5.76% 14 13 7.54% 8 10.64%
B IT spending as a % of revenue 5.32% 15 10 7.98% 19 2.88%
B Time-to-Market 4.88% 16 13 7.54% 15 4.66%
S Profit Growth 4.88% 16 22 3.10% 24 0.89%
B Employee Attrition / Retention / Turnover 4.66% 18 19 3.77% 24 0.89%
I SLA Target Compliance 3.33% 19 17 5.54% 4 17.96%
I Help Desk Performance 2.66% 20 5 16.19% 12 7.76%
I IT Cost / Headcount reduction 2.66% 20 20 3.55% 17 3.33%
S Increases in new products / services 2.66% 20 24 2.88% 17 3.33%
I Quality / Defect Rates in SW 2.44% 23 20 3.55% 13 7.10%
S Return on Equity 2.22% 24 24 2.88% 24 0.89%
XXX NONE 1.77% 25 27 1.33% 3 19.29%
S Earnings per share 1.77% 26 30 0.67% 30 0.22%
S Compound annual growth rates 1.55% 27 31 0.44% 31 0.00%
S Industry specific measures 1.33% 28 27 1.33% 23 1.11%
I IT spending per employee 1.33% 28 22 3.10% 29 0.44%
B Workforce Reduction 0.67% 30 29 0.89% 20 2.22%
B Lower error rates by users 0.67% 30 26 1.55% 22 1.33%
S Stock Price 0.00% 32 31 0.44% 31 0.00%
FOCUS: I = IT, B = Business operations, S= Strategic
Nevertheless, the performance metrics for CIOs and in-house IT do have a lot in common. This
too is not unexpected since “keeping the IT lights on” is “table stakes” for an IT leader to earn
that coveted “seat at the table” of strategy and business innovation. Notice in Figure 33 that
CIOs and Internal IT share three measures in their top five and eight in their top 10. The two
measures that only appear in the top 10 of the CIOs are business-focused and largely strategic:
“Innovative new ideas” (selected by over 20% of CIOs) and “Revenue growth” (selected by
9.5% of responding CIOs). Nevertheless, with two of Internal IT’s top five performance
measures focused on the business, and only half of their top 10 IT focused, it is clear that
alignment of IT with the business is alive and well in In-house IT organizations. As might also
be expected, Outsourced IT is more about keeping the IT lights on than Internal IT, with their top
five metrics all IT focused.
CIOs share only one performance measure in their top five with Outsourced IT – “Availability.”
They do share six in their top 10, however, which is also indicative of an alignment. Similarly,
Internal and Outsourced IT share seven measures in their top 10 lists. The most surprising thing
about the performance measures for Outsourced IT is that nearly 20% of CIOs report that they
have no measures whatsoever for evaluating the performance of those vendors to whom they
outsource. Thus, “None” ranks as the third most used performance measure for Outsourced IT;
however, it is not a measure at all, but rather the absence of performance measures. Sadly, this is
about the same amount for the data set of 717 unique organizations. This suggests a profound
immaturity in a large percentage of organizations when it comes to managing vendor
relationships, a very important capability in these days of increasing outsourcing and external
cloud.
E. How CIOs Spend Their Time, with Whom, and What They Do with Them
The job of the CIO is complex and evolving. Since 2007, the SIM IT Trends Study
questionnaires have included questions regarding how CIOs spend their time. In particular, how
much of their time (the “how much”) they spend with whom (the “who”) doing which activities
(the “what”). These questions were expanded last year, and additional questions added to assess
how often CIOs meet with various other senior executives (expanding the “who” to be more
specific and adding the “how often”). Questions were also added to determine to what extent
CIOs believe those C-level relationships contribute to the value of IT to the organization (the
“how valuable”). This year, these questions were further expanded and improved, with the
“who” and “what” being separated for the first time, and both those lists expanded significantly.
The specific changes are described in the Appendix.
These improvements, and the inclusion of all five of these dimensions (specifically, how much,
with whom, doing what, how often, and how valuable), significantly increase our ability to
understand and track changes in the multifaceted role of the CIO in these times of rapid change.
On the other hand, we are to some extent in the early stages of learning how to best collect and
analyze this rather complicated data set regarding the very complicated role of the CIO. Further
questionnaire improvements are likely in the future, as we and others come to better understand
this phenomena 14. However, the data we now collect about how CIOs spend their time are so
different that comparisons with past data are somewhat problematic.
All of these what, who, how often, how much, and how valuable questions came at the very end
of the questionnaire this year, in the second Bonus section. First came the “who” and “how
much” questions, asking “what percentage of your time on your job is spent … interacting with
or developing relationships with” each of nine categories of people. The list consisted of seven
people categories (i.e., C-level (non-IT); business (non-IT, non-C-level); IT employees
(internal); IT contractors, vendors, and service suppliers (not employees); external customers
14
For example: Weill, P., & Woerner, S. (2013). “The Future of the CIO in a Digital Economy,” MIS Quarterly
Executive, 12:2, 65-75; Carter, M., Grover, V, & Thatcher, J. (2011). “The Emerging CIO Role of Business
Technology Strategist,” MIS Quarterly Executive, 10:1, 19-29.
and/or suppliers; IT personnel of external customers and/or suppliers; and IT colleagues outside
my organization) plus “working alone” and a fill-in-the-blank “others” categories. An overall
total of 100% was required. The results are shown in Figure 34.
Not surprisingly, the 305 CIOs who answered this question report that on average they spend
over 30% of their time with IT employees within their organizations (30.3%). But, as also
indicated in Figure 34, over 40% of the average CIO’s time is spent interacting with business
people within their organization (19.8% with C-level + 20.5% with business not IT non-C-level
= 40.3%), indicating an significant focus on the overall business. Only 8.0% of their time is
spent interacting with IT contractors, vendors, and service providers; and another 8.8%
interacting with customers or suppliers of the organization (6.0%) and their IT personnel (2.8%).
Networking with IT colleagues outside their organization, such as at conferences and in
professional societies like SIM, accounts for 4.3% of their time; and finally, working alone
accounts for 7.8%.
Figure 34: Average Percent of a CIO's Time Spent Working with the Following (n = 305)
As summarized in Figure 35, on average, 45.3% of a CIO’s time is spent interacting with IT
personnel, including colleagues outside their organization; while 46.3% is spent interacting with
business personnel, specifically the executives, customers, and suppliers of their organization;
and most of the remaining 8.3% is spent working alone.
It is difficult making comparisons with these CIO data to the “how they spend their time” data
from prior years, since four of the eight “with whom” categories are new. Similarly, the “what”
activities data from prior years only contained six of the 17 activities used this year, at least four
of which were purely IT-related. Furthermore, until this year, these “who” and “what” questions,
and thus their data, were combined into a single question that was required to total 100%.
Although some statistical machinations could be used to generate some comparisons with
previous years’ data, these comparisons would be of uncertain value, and could even be
misrepresentative of the actual trends.
Figure 35: Summary: With Whom Do CIOs Spend Their Time? (n = 305)
Next, digging deeper into the “who” dimension, those respondents who indicated that they spent
any time at all with “C-level (non-IT) personnel” were asked about the frequency of their
interactions with their organization’s C-level executives and board members. Specifically,
respondents were asked if they met daily, weekly, monthly, quarterly, annually, or not at all with
their CEO, COO, CFO, CMO (Marketing), CLO (Legal), or Board or Directors. A fill-in-the-
blank “other” category was also provided on this question. These “how often” responses are
summarized in Figure 36, with the largest average frequency highlighted for each.
Figure 36: Frequency of CIO Interactions with Other Executives

CEO COO CFO CMO CLO BOD
Daily 16.6% 30.5% 30.7% 14.1% 5.2% 1.1%
Weekly 46.4% 36.5% 51.9% 37.4% 30.9% 5.7%
Monthly 24.9% 10.2% 11.3% 19.6% 25.3% 14.3%
Quarterly 6.9% 2.3% 2.1% 3.7% 12.3% 28.3%
Annually 3.1% 1.1% 1.4% 2.2% 4.5% 16.8%
None 2.1% 19.5% 2.5% 23.0% 21.9% 33.7%
n= 289 266 283 270 269 279
These responses are portrayed graphically in Figure 37, which indicates that, on average, CIOs
most frequently interact with CFOs, with 82.6% of respondents meeting with their CFO at least
on a weekly basis. Nearly two-thirds of CIOs report meeting at least weekly with COOs and
CEOs, 67% and 63%, respectively; and 51.5% report at least weekly meetings with their
organization’s CMO (Chief Marketing Officer). The least amount of regular interaction for
CIOs is with Chief Legal Officers and Boards of Directors, with just over 36% meeting at least
weekly with CLOs, and with a mere 6.8% meeting weekly with Boards of Directors. More than
one third of CIOs report no interaction at all at the Board level and over 50% report meeting
either once a year or not at all.
Figure 37: Frequency of CIO Interactions with Other Executives
Comparing the frequency of the CIO interaction reported in this year’s SIM IT Trends Study
with the data collected last year (as shown in Figure 38), there is a significant increase in regular
interaction between the CIO and other members of executive management team. The percentage
of CIOs reporting at least weekly interaction with the CEO, COO, and CFO are 63%, 67%, and
83%, representing year-over-year increases of 29%, 67%, and 40%, respectively. The
percentage of CIOs reporting at least weekly interactions with CMOs is up 78% over last year to
51%. Similarly, the percentage of CIOs reporting such interaction with legal executives almost
doubled to 36%, and the percentage reporting at least weekly interactions with Directors, albeit
still a paltry 7%, increased 250% since last year. All this strongly supports the conclusion that
the CIO, and IT in general, is becoming more strategic and business-focused as organizations
become more digitized.
Figure 38: Frequency and Value of CIO Interactions with Other Executives (2013-14)
Interact w/ at least Interact w/ Value/Quality of Interactions
Number of CIOs
once a week monthly Very Positive/Positive Neutral responding
%
change
2013-14 2014 2013 2014 2013 2014 2013 2014 2013 2014 2013
CEO 29% 63% 49% 25% 21% 82% 83% 14% 14% 289 139
COO 67% 67% 40% 10% 8% 82% 78% 15% 16% 266 92
CFO 40% 83% 59% 11% 13% 77% 75% 20% 19% 283 136
CMO 78% 51% 29% 20% 15% 68% 68% 25% 29% 270 78
C-Legal 90% 36% 19% 25% 27% 46% 47% 44% 51% 269 81
BOD 241% 7% 2% 14% 16% 65% 61% 29% 39% 279 72
Those CIOs who indicated in these frequency questions that they spent time interacting with
other C-level executives, were then asked about the “quality/value of this interaction to
increasing the contribution and value of IT in your organization.” Their responses with respect
to the value and quality of these interactions are also shown in Figure 38. There is little change
between the two years of these “how valuable” data. Interactions with CEOs and COOs are
viewed as Positive or Very Positive by 82% of the responding CIOs this year, and 77% view
their interactions with their CFOs as Positive or Very Positive. CIO interactions with the
Marketing, Legal, and Board members are also considered Positive or Very Positive by 68%,
46%, and 65% of CIOs, respectively.
Interestingly, the percentage of CIOs reporting Negative or Very Negative value ratings for
interactions with CEOs, CFOs, and COOs decreased slightly year over year, but increased
slightly for CMOs, CLOs, and Directors. However, almost all of these negative ratings are in
single digits, the only exception being CLO interactions, with a 10% negative rating this year.
This somewhat high negative ratings for CLOs may be affected by the legal implications of the
recent rash of cybersecurity breaches.
Finally, respondents were provided with a list of 17 activities (the “what”) and asked to identify
which of these activities they spent their time on and with whom they worked with performing
these activities (providing them with a list of only those people with whom they previously
indicated that they interacted). Two main analyses were performed on these new data, which can
be conceptualized as a matrix with the 17 activities on one axis and their customized “with
whom” list on the other.
First, the number of “votes” in each cell of the matrix was totaled by row (“what”) and column
(“who”), and standardized so that the row and column totals equaled 100%. The results of the
column totals are shown in Figure 39, compared to the average percent of a CIO's time spent
working with these same categories of people as reported in Figure 34. The two sets of results
are mostly comparable, although differ in CIO time spent with internal IT employees, IT
colleagues from other organizations, and working alone. Both sets are provided for comparison
purposes, although the earlier data, shown in Figure 34, is a more direct measure and thus may
be more accurate.
Figure 39: Compare Two Calculations of Percent of CIO Time Spent Working with Whom
% selecting
an activity
Groups With Whom CIOs Spend Their Time with a group Interaction
(standardized data from
to 100%) Figure 34
C-Level (non-IT) 18.0% 19.8%
Business (non-IT, non-C-Level) 19.7% 20.5%
IT Employees (Internal) 22.6% 30.3%
IT Contractors, vendors and service suppliers (not employees) 8.8% 8.0%
External customers and/or suppliers 5.8% 6.0%
IT personnel of external customers and/or suppliers 3.2% 2.8%
IT colleagues outside my organization 8.0% 4.3%
Working alone 13.0% 7.8%
Others 0.9% 0.5%
Second, the “what” activities that CIOs engage in was further analyzed. As with the matrix data
in Figure 39, the number of “votes” or “selections” in each cell of the matrix were totaled and
standardized to total 100%. These row total percentages are shown in Figure 40, allocated to
separate subtotals for IT- and business-related activities. As mentioned above, these are very
new and complicated data, and caution is advised since the data in the matrix are really about
“whether” the CIOs do something with someone, rather than “how much” they actually do it
with them.
Figure 40: What CIOs Do with Their Time
Activities Performed by CIOs: % selecting an activity

What CIOs Do with Their Time (standardized to 100%)
IT Business
Business priorities, strategy, architecture 8.1%
IT priorities/strategy 8.0%
Managing organizational change 6.8%
Non-IT-related activities 5.1%
Evangelist for the business 4.8%
Business research 5.1%
IT Evangelist 5.9%
IT Governance 5.4%
IT human resources and talent management 4.7%
IT operations/facilities management 5.1%
Knowing the needs of IT customers 6.6%
Knowing the needs of customers of the business 6.5%
Project management 6.7%
Software development 4.1%
Technical research 5.9%
Resource allocation/budgeting 6.0%
SUB TOTALS 51.7% 42.9%
Managing my personal network 5.4%
TOTAL 100.0%
Nevertheless, in the aggregate, the data in Figure 40 are comparable to the “with whom” data
summarized in Figure 35, (which indicate that on average 45.3% of a CIO’s time is spent
interacting with IT and 46.3% interacting with the business); although, those data were about the
interactions of CIOs with others, and these data are about what CIOs do with those people.
“This is the tendency for good outcomes to be attributed to skill

and bad outcomes to be attributed to sheer bad luck. This is one of
the key limits to learning.” – James Montier
V. Skills Needed for the Success of New IT Hires, Mid-Level IT

Professionals, and CIOs
Over the years, the IT industry that has often experienced hiring challenges, generally related to
the availability of personnel with the right experience and skills needed to meet current demand.
This is often related to new innovations and the widespread and/or fast-paced adoption of new
information technologies; however, even older technologies experience skill shortages. So it is
no wonder that this year’s SIM IT Trends Study found that the IT Talent/Skill Shortage was the
second-most worrisome concern for senior IT leaders, up from third last year when the
personally most important/worrisome IT management issues question was first added to the
questionnaire (see Figure 2).
In order to better understand this IT Skills issue, another new question was added to the
questionnaire this year. The respondents were provided with a list of 37 skills and capabilities,
with three columns for answers, and asked to “select the three skills or experiences you believe
are most important for the success of new IT hires, … mid-level hires, [and] your [own] success
in your job.” For the purposes of the following analysis and discussion, the data set consisting of
451 CIOs was used. This question was in the second, optional Bonus section and a total of 312
CIOs answered it. The skills are listed alphabetically in Figure 41, with a summary of their
answers for each of the three parts of the question, including the percentage of the 312 selecting
each skill as one of the three most important for success in each category of IT employee and the
rankings based on those percentages for each skill in that category.
A. The Top Five Skills for the Success of CIOs, Mid-Level IT Professionals, and New IT
Hires
Focusing on just the top five skills in each of the three job categories results in a subset of nine
skills. These are shown in Figure 42. There is a striking difference in the relative importance of
a smaller number skills for new hires than the number for mid-level and senior-most IT
professionals. Although the same three skills are in the top three for both new and mid-career IT
professionals, for the latter they were selected by a much smaller percentage of CIOs. This
suggests that fewer capabilities are needed by, or perhaps fewer are more critical for, new hires;
while, on the other hand, greater skill diversity is required to succeed as a mid-level IT
professional. This increasing need for skill diversity seems to hold true for CIOs too. Another
interpretation of these findings might be that IT jobs skills are most diverse at mid-career, while
somewhat more narrow for senior-most IT executives, and quite focused on a few skills for new
hires. It is also noteworthy that new hires have four skills selected by more than 20% of the
respondents, CIOs have six, but mid-level IT personnel have only one. This also supports the
notion that success as a CIO requires relatively more skill concentration than for mid-level IT
professionals, although less concentration than for new IT hires. It is also clear that a CIO’s
success requires concentration in quite a different set of skills than the other two levels.
Figure 41: Most Important Skills for the Success of CIOs, Mid-Level IT Professionals, and
New IT Hires
IT Middle New IT
Skills (Sorted Alphabetically) CIO Management Hires
% %
Rank selecting Rank % selecting Rank selecting
Accounting/finance 17 5.1% 34 0.6% 30 0.6%

Analytics/statistics 21 3.2% 26 2.9% 23 2.2%
Budgeting 12 9.6% 27 2.6% 34 0.3%
Business analysis 9 11.9% 7 16.7% 7 8.7%
Change management 10 11.2% 15 7.7% 23 2.2%
Collaboration with others/teamwork 6 20.2% 1 33.7% 3 38.5%
Communication (oral) 5 20.8% 5 17.0% 5 18.3%
Communication (written) 15 6.1% 14 8.0% 7 8.7%
Decision Making 4 23.4% 9 11.5% 19 2.9%
Delegation 14 7.1% 24 3.2% 34 0.3%
Emotional intelligence 7 16.0% 15 7.7% 10 7.7%
Empathy 30 1.0% 33 1.0% 21 2.6%
Enterprise architecture 22 2.6% 21 3.8% 27 1.0%
Entrepreneurship 20 3.5% 34 0.6% 30 0.6%
Ethics/tolerance 29 1.3% 30 1.3% 21 2.6%
Functional area knowledge 24 2.2% 5 17.0% 4 22.1%
Golf 33 0.3% 36 0.3% 27 1.0%
Honesty/credibility 8 15.4% 10 11.2% 6 15.4%
Innovation 13 8.7% 13 8.3% 11 7.1%
Integration 34 0.0% 28 2.2% 17 3.5%
Managing expectations 11 9.9% 11 10.3% 18 3.2%
Marketing/sales 24 2.2% 36 0.3% 37 0.0%
People management/relationships 2 29.5% 4 17.6% 13 5.1%
Planning 24 2.2% 18 5.4% 26 1.3%
Problem solving 15 6.1% 2 19.9% 2 39.4%
Programming 33 0.3% 30 1.3% 12 6.7%
Project integration/program management 30 1.0% 21 3.8% 27 1.0%
Project leadership 19 3.8% 11 10.3% 25 1.6%
Project management 18 4.8% 8 14.1% 16 3.8%
Project plan/budget/schedule 30 1.0% 24 3.2% 34 0.3%
Providing leadership 1 34.3% 17 6.4% 30 0.6%
Software testing 33 0.3% 30 1.3% 19 2.9%
Strategic planning 3 23.7% 29 1.6% 30 0.6%
Systems analysis and design 33 0.3% 21 3.8% 13 5.1%
Technical knowledge 22 2.6% 2 19.9% 1 47.4%
Technology architecture 27 1.9% 18 5.4% 15 4.8%
User relationship management 27 1.9% 18 5.4% 7 8.7%
Pick up to 3 for each job category. n = 312 CIOs
As with any scientific or engineering discipline, entry-level IT professionals require basic skills.
Therefore, it is not surprising that Technical Knowledge was chosen as one of the three most
important success skills for a new IT employee by almost half of the CIO respondents (47.4%).
This is a broad term that can include specific technical skills required for particular applications,
technologies, tools, programming languages, or devices. Problem Solving (39.4%) and
Collaboration (38.5%) were selected as the next two most important success skills for new hires
according to the responding CIOs, with fourth ranked Functional Area Knowledge selected by
22.1%.
Figure 42: Top Five Most Important Success Skills for CIOs, Mid-Level IT Professionals,
and New IT Hires
Interestingly, the top three success skills for middle-level IT professionals are the same as for
new IT hires. The difference is in the order, and their selection frequency. Collaboration was
most frequently chosen (33.7%) for middle managers, with Problem Solving and Technical
Knowledge tied for second with 19.9% each. In fact, all of the top five skills for new hires are in
the top five for mid-level managers; although, IT middle managers also have People
Management as a sixth skill in their top five due to a tie. Mid-level managers and CIOs share
only People Management in their top five rankings. All three share Oral Communications at
fifth place, and this is the only capability all three share in their top five.
CIOs see the skills needed for their success as quite different from those needed for the success
of their reports, with three unique skills in their top five. Their most important skill is Provide
Leadership, chosen by 34.3% of the respondents. People Management (29.5%) was the second-
most frequently chosen skill, which was the fourth-most chosen for IT mid-management with
17.6%. Strategic Planning was selected by 23.7% and ranks third as one of the three most
important skills to be successful as a CIO, with Decision Making ranking fourth, with 23.4%.
Interestingly, Decision Making, Provide Leadership, and Strategic Planning are all unique to the
CIOs’ top five, the latter two are also unique to the top 15 for CIOs, and Strategic Planning is
unique to the top 25 CIO success skills. The similarities and differences in the top five skills in
each of the three job categories are shown in Figure 43, which is sorted by the top ranked skills
for CIOs in this subset of the top five skills for all three categories as shown in Figure 42.
Figure 43: Top Five Most Important Success Skills for New, Mid, and CIOs Sorted by CIOs’
B. Skills for Success and Career Progression

Examining the similarities and differences among these three career categories in Figure 43
suggests a career path for new IT professionals who aspire to managerial roles. It seems that the
skill mix for those who aspire to a career path aimed at excellence as an individual technical
performer, and who might be a mentor to others in a technical career path (rather than a
managerial one), might look more like the new hires than mid-level managers or CIOs, (the
technical path being more about expanding technical capabilities, rather than acquiring
management-oriented skills).
This is obviously the case for CIOs, where technical knowledge and capabilities seem of little
importance to their success, while executive-level managerial skills like Providing Leadership,
Strategic Planning, Decision Making, and relationship skills, like People Management and
Emotional Intelligence, are quite critical. Nevertheless, the relative importance of Oral
Communications and Collaboration skills across all three categories, as shown in Figure 43,
suggests a set of core skills that are important throughout the career of an IT professional. In
fact, Collaboration/Teamwork is the only success skill selected by at least 20% of the
respondents for all three categories; and Oral Communications the only one selected by at least
15% for all three levels.
Focusing on just the top ten skills in each of the three job categories results in a subset of 16
skills. These are shown in Figure 44, which is sorted by the rankings for new hires. This figure
also supports the idea of a managerial career progression from new IT hire to CIO, as once
highly important technical capabilities wane in favor of managerial and executive skills. This
explains, at least in part, why more CIOs are coming from prior positions outside of IT, as shown
in Figure 31 and Figure 32.
Figure 44: Top Ten Most Important Success Skills for New, Mid, and Top Sorted by Top 10 of New
Figure 44 provides further support for the existence of a core set of success skills for IT
professionals, Honesty (selected by at least 10% of respondents for all three categories),
Business Analysis (selected by at least 8.7% of respondents for all three categories), and
Emotional Intelligence (selected by at least 7.7% of respondents for all three categories)
appearing in the top ten of all three career categories along with Collaboration and Oral
Communications. Other skills selected by at least 5% of respondents for all three categories are
Problem Solving, Written Communications, and People Management. Interestingly, none of
these are considered as technical skills. This also explains, at least in part, why successful CIOs
are moving into CEO, COO, and other C-level (non-IT) positions as well.
“In a time of drastic change it is the learners who inherit the

future. The learned usually find themselves equipped to live in a
world that no longer exists.” – Eric Hoffer
VI. Summary and Conclusion

The results of the 35th Anniversary SIM IT Trends Study point to a time of profound change for
both business and technology leaders. Last year, the research team sensed a transition or
evolution in the role of IT leadership and IT departments, in light of the year-to-year volatility in
some of the Study data and our own observations and discussions. Because of this, significant
changes were made to the questionnaire. As detailed in the Appendix, completely new questions
were added to ascertain the most important success skills and performance measures for IT
leaders, the role of the IT department and IT leadership in corporate strategy and innovation, and
the organization’s most important technologies; moreover, substantial changes were made to the
questions about the most important IT management issues, the largest and most important
technology investments, IT budget and sourcing, IT staffing and workforce, and how CIOs spend
their time and with whom.
The pace of change is increasing in the technology, economic, and geopolitical environments;
and they are getting more complicated. The use of “the Cloud” is growing rapidly, and yet over
80% of IT is still delivered in-house. The use of shared services is also growing, and spending
for software development and integration is rising too. Cybersecurity spending is rising even
more, yet “being secure” is much more difficult these days, given the many security threats and
the more skilled – and numerous – perpetrators. The IT legal and regulatory environment is also
changing and becoming more complex. Legacy systems remain important. There is more
demand for IT services from users of analytics, big data, and marketing through an increasing
number of technology conduits (e.g., Internet, social, mobile, locational, or something else).
And soon, there is the “Internet of Things,” with sensors, robotics, and artificial intelligence
everywhere.
The enterprise is becoming more and more digitized and connected, from raw material,
manufacturing, marketing, sales, on through to customer service, and everything else in between.
As a result, IT leadership is changing and how IT dollars are being spent is also changing. There
is still a demand for IT leaders to increase the efficiency and productivity of IT, as well as for the
organization as a whole; but demand is also increasing for IT to deliver more speed, agility,
innovation, and security; in other words, more overall business value. So it is not surprising that
more CIOs are coming from outside organizations and from non-IT backgrounds. Nor is it
surprising that we see significant changes in how IT leaders spend their time, whom they spend
their time with, and what they do with their time.
It is quite likely that the CIO position is the most complicated and demanding job in
organizations today. Not only must the modern CIO, and his or her team, manage an
increasingly more complex IT infrastructure, as well as multifaceted IT organization structures
and governance processes 15, in order to ensure robust, aligned, and secure IT services for their
host organization, but they must also constantly scan for new and emerging technologies that
will provide business value and help shape the future of the enterprise. And all this is done in a
world filled with uncertainty and risk, growing regulation, legal ambiguity, and competitors from
around the globe, as well as more sophisticated and aggressive cyber criminals. In the face of
15
The distinction between centralized and decentralized/federated IT organization structures (as shown in Figure 9
and Figure 10) may be blurring, as IT governance becomes more federated and IT delivery becomes more
centralized. This is an issue we hope to address in next year’s SIM IT Trends Study.
these challenges, it is undoubtedly a tough time to be a CIO; or for that matter, any IT leader.
But it is also a great time to be in the field, if you’re up for the excitement and challenges.
In conclusion, it is an amazing time to be in information technology. IT is changing products,
services, processes, work, and organizations; as well as transforming communities, industries,
markets, economies, societies, and even whole countries and indeed the world. Not all
organizations and CIOs, and their C-suite brethren, will make it successfully through this
transition period. However, we hope, in some small way, that the SIM IT Trends Study and this
report will assist those who read it to be among those who survive and emerge as winners. For
better for worse, IT and IT professionals are changing the world; we hope for the better. As the
sagacious Spiderman put it, “With great power comes great responsibility. This is my gift, my
curse.”
“It is not the most intellectual of the species that survives; it is not the
strongest that survives; but the species that survives is the one that is able to
adapt to and to adjust best to the changing environment in which it finds
itself.” – Leon Megginson (describing Charles Darwin’s work)
Appendix: Research Methods, Design, and Delivery of SIM’s IT Trends Study

Founded in 1968, the Society for Information Management (SIM) is the United States’ oldest
and largest professional organization for senior IT leaders. 2014 marked the 35th anniversary of
SIM’s IT Trends Study. Over the past 35 years this research has evolved into a comprehensive
and detailed assessment of the state of organizational IT and its leadership. Over the past
decade, the Study has been done on an annual basis to better identify trends in this fast-paced
profession.
The nature of the Study is such that the population studied is limited to members of SIM, and
thus is a convenience sample (as is the case for just about all research of this kind). Most (682 or
95.1%) of the responding 717 organizations are U.S.-based, with 20 (2.8%) in Europe, 10 (1.4%)
in non-U.S. North America, and five (0.7%) based in Australia and Asia. Given the diverse
representation of the sample collected across industries (as shown in Figure 45 below) and
organizations of all sizes (as shown in Figure 46 which follows), we believe it is reasonable to
assume these 717 organizations provide a good representation of the state of IT in the U.S.
Furthermore, since SIM is an independent, not-for-profit professional organization, with no
marketing or political motivations, and the research is conducted by a team of academicians, it
makes for a reasonably unbiased Study and report.
Figure 45: Response by Industry for 717 Unique Organizations
Financial Services 14.78% Hospitality/Travel/Leisure/Tourism 1.95%

Manufacturing 13.11% Media/Entertainment. 1.95%
Health/Medical 9.90% Construction 1.67%
Education 7.81% Other 1.67%
Government 5.30% Automotive 1.53%
IT Services/Consulting 5.02% Telecommunications 1.39%
Retail/Wholesale 4.88% Utilities 1.26%
Business Professional Services 4.60% Chemical 1.12%
IT Hardware/Software 4.04% Aerospace/Defense 0.98%
Not-For-Profit 3.35% Printing Publishing 0.84%
Energy 3.07% Electronics/Semiconductors 0.56%
Consumer Goods 2.09% Food Services 0.56%
Medical Technology 2.09% Agriculture 0.14%
Real Estate 2.09% Mining/Minerals 0.14%
Transportation/Distribution 2.09%
Although the average annual revenue is fairly large at $5.578 billion for the 564 organizations
answering that question, as shown in Figure 46, their median revenue is $500 million, and the
majority (57.7%) of responding organizations have revenues between $100 million and $5
billion. In other words, the organizations participating in this Study vary significantly by
revenue, much like those in the rest of the U.S. economy.
Figure 46: Total Revenue of Organization (n = 564)

What is the total revenue of your organization in US $?
> 100-500B 0.90%
> 10-100B 8.60%
> 5-10B 6.45%
> 1-5B 22.22%
> 500M-1B 9.68%
> 100-500M 25.81%
> 50-100M 9.68%
> 10-50M 12.37%
0-10M 5.38%
The questionnaire design process followed prior SIM studies and copied closely last year’s
Study. The lists of concerns/issues and investments/technologies were revised, with many items
being added, split, deleted, or revised. New items were based on suggestions from last year’s
participants, the research team (consisting of the authors and SIM members Barbra Stewart, Bill
Peterson, and Russell Douglas), and members of the SIM Enterprise Architecture Working
Group (SIMEAWG) that served as a Delphi review panel and piloted the online questionnaire.
Items that were removed were those not selected by at least 2% of respondents last year. Figure
47 shows what changes were made to the list of “IT management concerns/issues” for this year’s
Study.
Figure 47: Modifications to List of IT Management Concerns/Issues

Added
“Flexibility” added to “Business Agility” “IT Performance Measures/Incentives”

“Innovation” “IT Value Proposition to the Business”
“In-sourcing (IT previously outsourced)” “Project Management”
“IT Agility” “Shadow IT/Rogue IT”
“IT Credibility” “Velocity of Change in Business”
“IT Governance”
Removed
“Outsourcing” “Sourcing Decisions”

“Societal Impact of IT” “Vendor Management”
Changed
“Other” – turned into a suggestion rather than a selection
“Time-to-Market/Velocity of Change” became three selections this year as they were

separated became: “Velocity of Change in the Business,” Velocity of Change in IT,” and “IT
Time-to-Market/IT Speed of Delivery.”
“Business Continuity/Disaster Recovery” was split into two separate selections, “Business
Continuity” and “IT Disaster Recovery.”
“Compliance and Regulation (HIPAA, SarBox, SAS70, PCI, etc.) ” was “Legal Compliance-
HIPPA, SarBox, SAS70, PCI, etc. ”
“Enterprise/IT Architecture” was “Enterprise Architecture”
“IT Change Management” was “Change Management”
“IT Organization Design/Structure” was “IT Organization”
“IT Reliability/Quality/Availability” was two options: “IT Quality” and “IT Reliability”
“IT Talent/Skill Shortage/Human Resources (Training, Retention, Development) ” was
joined from “Human Resources (Training, Retention, Development) ” and “Talent/Skill
Shortage”
“IT Operations/ITIL/IT Service Delivery/Keeping the lights on” was “IT Service Delivery”
“Security and Privacy” were recombined for this year’s Study. “Privacy” was separated the
prior year but was not selected by a single respondent.
Similarly, the list of “IT investment priorities and concerns” was modified this year. The
methodology for selecting choices was the same as described above for the “IT management
issues and concerns.” For the first time, in addition to selecting up to three of their “largest/most
significant investments” and “technologies of greatest concern to me personally,” respondents
were also asked to select their “organization’s most important technologies.” A complete list of
changes is shown in Figure 48 below.
Figure 48: Modifications to List of IT Investment Priorities and Concerns

Added
“Data Center/Infrastructure”
“Innovation/Disruptive Technologies”
“Insourcing (of IT previously outsourced) ”
“Integration”
“IT Management Applications/IT for IT (e.g., application portfolio management, network
management)”
“IT Services Catalog”
“Master Data Management”
“Research and Development”
“Shared Services”
Removed
“Business Rules Engine” “GRID Computing”

“Global Position Sensing” “Mainframes”
“Green Computing” “Open Source”
“Server Visualization” “Systems Development Tools”

“Service Oriented Architecture” “Systems Management Tools”
“Speech/Voice Recognition” “Other” – turned into a suggestion rather
“Supplier Portals” than a selection
Changed
“Application/Software Development” was “Apps”
“Disaster Recovery” was “Disaster/Recovery”
“IT Service Management/ITIL” was “ITIL/IT Process Management Practice”
“Security/Cybersecurity” was “Security”
“Social Networking/Media” was “Social Networking/Media/Computing”
“Tablets/Smart Phones/Mobile Devices” was combined from “Tablets” and “Smart Phones”
Finally, the list of performance measures was significantly increased from 14 to 32. The
performance measures for In-house-IT question was added to the SIM IT Trends questionnaire in
2012. Last year this was expanded to include performance measures for Outsourced IT. In this
year’s Study, the measures used to assess the performance of IT leadership were also included.
This expanded list of measures and the addition of this third assessment category allows for more
insight into how the performance of IT and its leadership is being assessed. Figure 49
summarizes these changes.
Figure 49: Additions and Changes to the List of Performance Measures

Changed
“User satisfaction was “Increased customer/client satisfaction”
“Lower error rates by users/customers” was “Lower error rates”
“Other” as a selection replaced with a suggestion box for changes and additional to next
year’s questionnaire
“SLA target compliance” was “SLA target”
Added
Availability (Up time) NONE - no measures

Business cost reduction/ control Profit/growth/profit/PE/PEG/EPS
Employee attrition/retention/turnover Quality/defect rates in software
Help-desk performance Stock price
IT cost control Time to market
IT cost/headcount reduction Total cost of ownership
IT spending as a % of revenue Value of IT to the business
IT spending per employee Workforce Reduction
IT's contribution to strategy
To better understand the role of the CIO, the “how IT leaders spend their time” sections of this
year’s questionnaire were significantly expanded and improved. In prior years, respondents were
asked how they spend their time and were given a list of eleven options. These options included
activities (“what” CIOs do), as well as groups of people (with “whom” CIOs do it). Since
activities happen with people, there was some confounding in the data collected. To improve
this, this year the activities were split from the groups of people, and collected for both
separately and in combination. Both two lists were also expanded. The left-most column of
Figure 50 lists the nine people categories offered to respondents this year, the column to its right
lists the four options from last year. To the right of this, there is a list of the 17 activities used
this year, with the six 2013 equivalents in the far right column. Unchanged this year were the
“what CIOs do with their time” questions regarding the frequency of their interactions with other
C-level executives and the contribution of those interactions to the value of IT to the
organization.
Figure 50: Changes to the Lists of What CIOs Do and With Whom They Do It
People 2013 Equivalent Activity 2013 Equivalent
C-Level (non-IT) Interacting with non- Business priorities, Business
IT C-level strategy, architecture Priorities/strategy
Business (non-IT, Interacting with non- Business research
non-C-Level) IT non-C-level
IT Employees Interacting with Evangelist for the
internal IT employees business
IT Contractors, Interacting with IT IT evangelist
vendors, and service vendors
suppliers (not
employees)
External customers IT governance IT governance
and/or suppliers
IT personnel of IT HR and talent IT human resources
external customers management
and/or suppliers
IT colleagues outside IT IT operations
my organization operations/facilities
management
Working alone IT priorities/strategy IT priorities/strategy
Other Other Knowing the needs of
customers of the
business
Knowing the needs of
IT customers
Managing my
personal network
Managing
organizational change
Non-IT related
activities
Project management
Resource
allocation/budgeting
Software Software
development development
Technical Research
To improve the quality of the data collection by reducing the possibility of list order bias, the
lists of issues, investments, and performance measures were provided to half of SIM’s
membership in alphabetical and to the other half in reverse alphabetical order. Although it is
beyond the scope of this report to include a detailed discussion of sampling procedures, it is clear
that the responses provided by the two subsamples are somewhat different, with a tendency for
more selections to come from the beginning of the list regardless of the order in which the items
were presented. Therefore, by combining the two subsamples in the final result, we believe that
this bias has been largely mitigated and this year’s findings on these questions (i.e., management
issues, technology investments and concerns, and performance measures) are more accurate than
ever before.
Several measures were taken to increase the response rate. For the second year, gift cards were
used as an incentive for participation in the Study. There were 15 $250 gift cards with the
winners randomly drawn from those completing the main section of the questionnaire, with 10
more awarded to those who completed each of the two optional bonus sections, for a total of 35
gift cards. This division between “main” and “optional” sections kept the time needed to
complete the primary questionnaire to less than 15 minutes, with the whole questionnaire taking
25 to 30 minutes to complete. In addition, a “Chapter Challenge” was introduced this year,
which encouraged competition among the chapters of SIM, with the three chapters with the
highest percentage of members completing the main questionnaire winning $1000, $500, or $250
for their STEM and/or scholarship funds. Additional resources will be directed to this chapter
competition in future years, since although the overall response rate was about 21%, the winning
chapter, Arizona, had a 44% response rate, and the two runner ups (Dallas and Houston) each
had more than a 30% response rate. These prizes were provided thanks to the generous support
of the survey sponsors: IDC, Infogix, Manager Mechanics, No Magic, Paladin Consulting, and
Pariveda Solutions. Also new this year, each participant received a personalized report
benchmarking their answers against the aggregate results.
The questionnaire was finalized on April 6, 2014. A total of 4,882 SIM members were invited to
participate via an e-mail containing a unique personal link to the online questionnaire. 270 of
these e-mails proved to be bad addresses and immediately bounced back, resulting in a research
population of 4,612 potential participants. Overall, 1,002 participants completed the main
questionnaire, for a response rate of 21.4%; 795 completed the first optional “bonus” section,
and 696 completed the second bonus section.
To encourage participation, SIM members were reminded regularly about the importance of the
Study through SIM’s weekly and monthly e-mailed newsletters, which also mentioned the gift
cards and other incentives, and provided status updates on the chapter competition. SIM’s
LinkedIn and Twitter presence was also used for this purpose. Furthermore, ten reminder e-
mails were sent over a nine-week period to those who had not at least started the questionnaire.
Data collection ended on June 8, 2014.
Upon conclusion of data collection, the authors conducted the analysis and prepared this
comprehensive report and the personalized benchmark report for each participant. Ken
(Kittipong) Boonme joined the research team in the fall and assisted with data validation and
development of the slide deck and personal report. The findings of each year’s SIM IT Trends
Study are presented during SIM’s annual SIMposium conference, which this year is in Denver,
Colorado on November 2-4, 2014. That presentation slide deck and this report are provided
online to all SIM members following the conference, and the slide deck is released to the general
public about a month later.

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This research made possible through the generous support of:

Price $500.00 (free download for SIM members)

Issues, Investments, Concerns, and Practices of Organizations and Their IT

The 2015 SIM IT Trends Study:

Comprehensive Report (Price: $500)

October 21, 2014

Figures and Tables

“What we observe is not nature itself, but nature exposed to our

“We are entering a period of consequences. We cannot avoid

I. The Top IT Management Issues and Concerns

Figure 1: Organizations’ Top 10 Most Important IT Management Concerns, 2003-2014

A. The Five Most Important IT Management Issues and Concerns of Organizations

B. The IT Management Issues Most Important or Worrisome to IT Leaders

Figure 2: IT Leaders’ Most Important or Worrisome IT Management Concerns (2013-14)

C. Comparing Organization’s Key Issues to Those Most Important or Worrisome to IT

Figure 3: Comparison of Personal to Organization’s Top 10 IT Management Issues

“Data was always big. It was the thinking (and

II. The Largest IT Investments and Most Important Technologies

Figure 4: Organizations’ Largest/Most Significant IT Investments, 2003-2014

B. The Five Largest Technology Investments of Organizations

4. Application and Software Development

C. Comparing Organizations’ Largest IT Investments to Their Most Important Ones

Figure 5: Comparing Organizations’ Largest IT Investments to its Most Important (2014)

D. The Most Worrisome Technologies for Senior IT Leaders

Figure 6: Personally Most Worrisome Technologies (2013-2014)

E. Comparing IT Leadership’s Most Worrisome Technologies to the Largest Technology

Figure 7: Comparing IT Leadership’s Most Worrisome Technologies to the Organization's

III. Participating Organizations and Their IT Practices

Figure 8: Percent of Revenue Allocated to IT Budget (2005-2014) n=493

Figure 9: IT Organization Structure 2006-2014 (717 responding organizations)

while IT is centralized in most organizations, there is a slow-moving trend toward more

B. Role of IT in Strategy and Innovation

Figure 11: IT Alignment, Credibility, and Role in Strategy and Innovation

Figure 12: IT is Aligned with the Business (717 unique organizations)

C. IT Budgets and Staffing Trends

ii. IT Budget Allocations

Hardware 15.7% 15.4% -0.3% 25% 66% 10%

Figure 15: 2009-2014 IT Budget Allocation (Actual) and 2015 Projection

iii. IT Staffing and Salary Trends

a. IT Employees and Their Salaries

Figure 17: Change in Number of Internal IT Employees

b. IT Contractors and Consultants

c. Turnover and Retirements, Education and Training

Figure 18: Full-Time IT Employee Actual Turnover Rate 2006-2014

Figure 19: Percent of IT Budget Spent on Training and Education

D. Use of Cloud, Shared Services, Service Catalogs, and Chargebacks

Figure 20: Distribution of Organizations by Percent of IT Delivered by Cloud (n = 528)

Figure 21: Percentage of External Cloud-Based IT Services Delivered In These Categories.

ii. Shared Services for IT Delivery

Figure 22: Distribution of Organizations by Percent of IT as Shared Service (n = 452)

iii. Service Catalogs and Chargebacks

Figure 24: The Use of Service Catalogs and Chargebacks (n = 615)

Figure 25: In my organization we have an IT services catalog (n = 615)

IV. CIO Reporting Relationships, Time Allocation, Background, Tenure and

Figure 27: Average Job Tenure of CIOs (2006-2014) (n = 451 CIOs)

B. CIO Reporting Relationships

Figure 28: To Whom the CIO Reports, 2005-2014 by percentage of respondents

Figure 29: To Whom the CIO Reports, 2005-2014 by percentage of respondents

C. CIO Previous Employment

Figure 32: CIO Prior Employment (2010 to 2014)

D. Performance Measurement for CIOs

Figure 36: Frequency of CIO Interactions with Other Executives