The state of the Australian CIO 2010

The rise of selective outsourcing

Are CIOs planning to outsource any significant IT function currently being managed in-house in 2010? A quarter of CIOs answered yes — up from 18 per cent two years ago.

For organisations that exceed $1 billion in revenue, there is a downward trend in outsourcing, with most of the outsourced labour force between 1 and 30 per cent of total IT staff.

Brookfield Multiplex selectively sources services from Telstra and SQL data management to another third-party, which works well for Clark.

“I’m in the 30 per cent of outsourced labour bracket and if someone is looking at cost efficiency — and being able to meet targets — it is an area that you can’t ignore from an operation point of view,” he says.

Clark expects the outsourced labour market to increase.

“My organisation may grow to 40 per cent selectively outsourced and that would be my maximum,” he says. “I have been in a totally outsourced model and I don’t agree with that. The key services should be in the core, including ownership of data and the ability to innovate. If someone is getting paid to check whether your anti-virus is up to date, that is not strategic.”

He says the outsourced labour ratio will also depend heavily on the type of company.

“I have sites all around Australia so it is not efficient for me to hire people around the country for desk-side support.”

The trend to more selective outsourcing is apparent as more service and cloud offerings flood the market, according to Leonas.

More women CIOs needed

It comes as no surprise to those in the industry that the overwhelming majority (some 89 per cent) of CIOs are male. Leonas says there is no reason why women can’t reach the CIO level although many are unsure they want the role.

“If women want to get to the CIO level they will,” he says. “In my organisation females are promoted quite strongly.”

Leonas advises women who aspire to be a CIO to move through their existing roles until they reach the top.

With the demographic of the CIO changing, Leonas says it is good to see a generational change.

“It’s difficult for young people to get to the CIO level and it can be a case of being in the right place at right time,” he says.

The buck stops here

Compensation levels correlated notably with age. The average CIO income of those surveyed comes in at $231,000 per annum.

The figure, says Leonas, is average for the government space, but “a little low” across the private sector.

“If you look at larger organisations it’s closer to $300,000 to $350,000. The sweet spot of pay for people between 40 and 55 is probably correct,” says the 54-year-old.

Clark says the annual compensation will not only depend on the organisation’s size and focus, but on the type of CIO — operational or transitional — and which state the company is based in.

He says this is low for a CIO of a large company with international role requirements.

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Tags outsourcinggovernancecareersCFOThe State of the Australian CIOstaffbudgetsIT LeadershipVladas LeonasChris Clarkportfolio managementwages

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