TOP-OF-MIND CFO TECHNOLOGY ISSUES Finance chiefs seek to mitigate an IT talent shortage and manage cloud-enabled digital transformation
External Affairs: Using Managed IT Services PAGE 2
Reaching for the Cloud PAGE 6
America’s Got Talent... But Not Enough IT Talent PAGE 10
For about as long as companies have been able
to outsource IT services, senior finance executives
have identified saving money as the most common
reason for doing so. This made sense. Third-party IT
specialists, combining scale with domain expertise,
were able to deliver cost efficiencies few companies
could hope to achieve on their own. But now, as
managed IT services have matured, the benefits of
outsourcing the information technology function have
become broader and more strategic.
EXTERNAL AFFAIRS: USING MANAGED IT SERVICESCFOs now see capabilities, not lower costs, as the key benefits of IT outsourcing.
In a recent CFO Research survey
of 123 middle-market senior
finance executives, conducted in
collaboration with RSM, finance
chiefs say that the top benefits
of outsourcing IT activities today
are “freeing internal resources
for other purposes” and
“gaining access to world-class
capabilities”—benefits cited
by 57 percent and 50 percent
of the survey respondents,
respectively. These are followed
by “streamlining or increasing
efficiency for time-consuming
functions,” cited by 45 percent
of the respondents.
As for reducing and controlling
costs, which not long ago
would have been far and away
the top reason companies gave
for moving to an outsourcing
model? That now comes in
fourth place, cited by only
32 percent of the survey
respondents. (See Figure 1.)
The Virtual CIO
These findings dovetail with the
evolution of managed IT from
something used primarily to
provide tactical capabilities to a
more mature, higher-value service.
For many finance executives, the
benefits of the newest offerings
in this field handily outweigh
traditional concerns about cost
and quality. These offerings can
assist companies in creating a
strategic vision for the IT function,
deliver “virtual CIO” capabilities,
and help companies navigate
their transformation into digital
enterprises.
The ultra-speedy pace of
technological change, perhaps
combined with the ubiquity of
business process outsourcing
after decades of refinement,
appears to have given
finance executives a stronger
appreciation for outsourcing IT
functions than they once had.
Most now believe they can gain
continuous access to top-shelf
technology—and still improve
the predictability of their costs—
by embracing a managed IT
approach. Indeed, nearly seven
in 10 finance executives polled
in the latest CFO Research
survey—69 percent—agree that a
trusted IT services provider can
do a better job than the typical
company can do on its own. And
60 percent say they would be
comfortable having a trusted
managed IT services provider
deliver not some, but all, of their
company’s IT functionality.
3 I EXTERNAL AFFAIRS: USING MANAGED IT SERVICES
FIGURE 1 Potential benefits to be realized from outsourcing some or all IT functionalities to a trusted managed IT services provider
Freeing internal resources for other purposes
Gaining access to world-class capabilities
Streamlining or increasing efficiency for time-consuming functions
Reducing and controlling costs
Maximizing use of external resources
Improving company focus
Sharing risks with a partner company
57%
50%
45%
32%
24%
22%
12%Multiple responses allowed.
CFO Comfort Zone
Among the survey respondents
who say they would still be more
comfortable trusting only a
subset of their IT functions to a
managed IT provider, more than
half say they’d be most willing to
hand over responsibility for data
backup and recovery operations
(62 percent of respondents), and
network management with 24/7
monitoring (57 percent). (See
Figure 2.)
Back-up services, including
cloud-based offerings, give
companies access to IT
capabilities and skills they might
not otherwise be able to hire or
afford, such as 24/7 monitoring.
They also shift infrastructure-
related burdens, such as
hardware and system upgrades,
from their internal IT operations
to a third party. Presumably, this
allows the business to invest
additional resources in more
strategic initiatives.
There are, to be sure, lingering
concerns among some finance
executives about outsourcing
IT functions. Their top three
are costs (52 percent), the
provider’s ability to understand
the company’s businesses and
key systems (50 percent), and
service quality (47 percent). Given
the broad appetite for managed
IT services evidenced by the
other survey findings, it may be
that outsourcing still sounds too
good to be true to some finance
executives, who seem wary of
their own ability to assess a
service provider and negotiate
an appropriate service-level
agreement.
This, too, is understandable.
Finance executives are seldom
trained in IT, even though IT
often reports to finance. All the
more reason, then, that finance
leaders today can benefit from
a trusted IT services provider—a
modern, managed IT provider
who can deliver not just tactical
but strategic support as
technology becomes ever more
critical to keeping companies a
step ahead of competitors.
4 I EXTERNAL AFFAIRS: USING MANAGED IT SERVICES
FIGURE 2 Specific IT functionalities that survey respondents would be most willing to turn over to a trusted managed IT services provider
62%Data backup and recovery
Network management and 24/7 monitoring
Security and compliance
Business application support
End-user help desk
Telephony
After-hours support
Report writing and database administration
Strategic IT planning (virtual CIO)
34%
32%
30%
30%
28%
20%
18%
57%
Multiple responses allowed.
RSM US is the leading provider
of audit, tax and consulting
services for the middle
market. Our Technology and
Management Consulting
professionals act as strategic
advisors, helping maximize
technology investments and
ensuring stable, compliant IT
environments. Our professionals
average 15+ years of technical
experience.
RSM’s managed IT services
is a highly scalable platform
that combines our industry
knowledge with the essential
IT functions organizations
need to run a high-performing,
innovative IT department.
We are the next generation
managed services provider
(MSP) ready to guide your
organization through its digital
transformation.
RSM utilizes our full range of
services to develop a customized
solution to meet your needs. You
have the flexibility to choose
a co-managed platform, with
our advisors working alongside
your IT staff, or a fully managed
engagement to outsource your
entire IT department. Either
way, your technology support
costs are more consistent, with a
predictable monthly expense.
5 I EXTERNAL AFFAIRS: USING MANAGED IT SERVICES
ABOUT RSM
To learn more, please visit www.rsmus.com/MITS or call 800-274-3978.
It’s been just over a decade since third-party cloud
computing services became widely available, but
the uptake by corporate users in that relatively short
period of time has been substantial. A new survey of
middle-market finance executives by CFO Research,
conducted in collaboration with RSM, finds that
more than half of their organizations—53 percent—
are now using cloud-based services for fundamental
applications such as data storage and network hosting.
Forty-one percent are using cloud-based productivity
software such as Microsoft’s Office 365 or Google’s
REACHING FOR THE CLOUDMany companies have migrated basic IT functions to the cloud and are now looking to tap its higher-value potential.
G Suite, and more than a
third—37 percent—are using
cloud-based financial systems,
including ERP systems such
as NetSuite and Microsoft’s
Dynamics 365.
Relatively few companies,
however, have migrated higher-
value activities to the cloud.
Just 16 percent are using it for
data analytics, for example, and
only 10 percent for marketing
automation. If, as English
poet Robert Browning said, “a
man’s reach should exceed his
grasp,” corporations need to do
more to realize the cloud’s full
potential.
It appears they
will. Asked where
their companies
see clear value in
implementing new
technologies, 69
percent of survey
respondents cited
mobile applications
and 45 percent
ticked big data and
predictive analytics. Next were
social enterprise and Internet
of Things, each cited by 24
percent of respondents. (See
Figure 1.)
Many of these technological
innovations are most useful
only where companies are using
cloud services and can take
advantage of the scalability,
agility, and cost-savings
associated with them. This
suggests that the traditional,
tactical cloud services that
companies have embraced
most widely to date—storage,
hosting, productivity software—
eventually will be supplemented
by the higher-order services,
such as predictive analytics,
that companies covet. After
all, the ultimate goal of most
corporate technology strategies
is not simply to replace current
functionalities but to enable
future functionalities.
What’s holding companies
back for the moment? Where
their organizations haven’t
yet embraced cloud services,
finance executives say their
biggest concerns by far are data
security, cited by 69 percent
of the survey respondents,
and privacy issues, cited by
53 percent. Nearly four in 10
respondents—39 percent—also
7 I REACHING FOR THE CLOUD
FIGURE 1 New technologies that your company sees clear value in implementing
Mobile applications
Big Data and predictive analytics
Social enterprise
Internet of Things
Artificial Intelligence/Machine Learning
Virtual and Augmented Reality
69%
45%
24%
24%
21%
13%Multiple responses allowed.
say they are concerned about
the costs associated with cloud
services.
Given how widely these
concerns are shared, it’s
not surprising that a clear
majority of finance executives
say it’s important to use
the services of a third-party
expert in nearly all phases of
a cloud strategy, including
needs analysis and strategic
planning (cited by 57 percent
of respondents), architecture
and design (65 percent) and
implementation (72 percent).
Nearly half—48 percent—of
the survey respondents also
say a third-party expert is
needed for ongoing support
and monitoring of any cloud
initiative. (See Figure 2.)
All this suggests that while
cloud providers have work to
do on building trust in their
security and privacy protocols,
the migration to cloud services
that has gained so much
momentum over the past
decade is unlikely to reverse
direction. Already, much of the
new software being created is
designed expressly to fit into a
cloud environment. Meanwhile,
as the business value of moving
to the cloud becomes clearer—
half the survey respondents
say cloud computing can
provide access to world-class
capabilities, and more than half
say it frees internal resources
for other purposes—those
benefits, combined with a
better awareness of available
security tools, should offset
any perceived risk for many
potential users. Just last year,
Jeffrey Mann, a research vice
president at the information
technology research and
advisory firm Gartner Inc.,
predicted that by 2020,
corporate “no cloud” policies
will be as rare as “no Internet”
policies today.
Demographics will likely drive
further migration to the cloud
as well. As millennials steeped
in technology from a young
age become an ever-larger
percentage of the workforce,
and grow more and more
comfortable using the cloud for
sophisticated applications, we
can expect that companies will
increasingly see that a cloud-
based infrastructure can yield a
competitive advantage, one that
allows them to adapt quickly
to fast-shifting marketplace
demands. Today, it seems,
having your head in the cloud
is viewed as a good thing, and
that’s likely to become only
more true tomorrow.
FIGURE 2 When implementing a Cloud strategy, the stages where it is important to use the services of a third-party expert
57%
Needs analysis and strategic planning
Architecture and design
Implementation
Support and monitoring
48%
65%
72%
Multiple responses allowed.
8 I REACHING FOR THE CLOUD
RSM US is the leading provider
of audit, tax and consulting
services for the middle
market. Our Technology and
Management Consulting
professionals act as strategic
advisors, helping maximize
technology investments and
ensuring stable, compliant IT
environments. Our professionals
average 15+ years of technical
experience.
RSM’s managed IT services
is a highly scalable platform
that combines our industry
knowledge with the essential
IT functions organizations
need to run a high-performing,
innovative IT department.
We are the next generation
managed services provider
(MSP) ready to guide your
organization through its digital
transformation.
RSM utilizes our full range of
services to develop a customized
solution to meet your needs. You
have the flexibility to choose
a co-managed platform, with
our advisors working alongside
your IT staff, or a fully managed
engagement to outsource your
entire IT department. Either
way, your technology support
costs are more consistent, with a
predictable monthly expense.
ABOUT RSM
9 I REACHING FOR THE CLOUD
To learn more, please visit www.rsmus.com or call 800-274-3978.
U.S. colleges and universities are churning out more
than 40,000 graduates in computer and information
sciences each year, according to the National Center
for Education Statistics. Apparently, it’s not enough.
In a new CFO Research survey, conducted in
collaboration with RSM, 49 percent of senior finance
executives at middle-market companies say their
businesses are being adversely impacted by their
ability to attract and retain qualified technology talent.
AMERICA’S GOT TALENT… BUT NOT ENOUGH IT TALENTCompanies continue to struggle to attract and retain IT employees— and look to outsourcing and the cloud for help.
Within that group, these
executives say the business
functions most severely
impacted are operations (cited
by 64 percent of those reporting
talent woes), finance (36
percent), and IT (36 percent).
Clearly, the fallout from the
talent shortfall extends far
beyond the IT department. (See
Figure 1.)
The dearth of qualified
personnel isn’t all that hard
to explain. Over the past
two decades, technology
has inserted itself into nearly
every facet of daily life,
transforming the way we work,
shop, travel, and consume
entertainment. Companies
seeking to keep pace with
customer expectations have
a voracious appetite for
skilled tech workers, from
supply chain analysts to data
scientists, who can navigate
and manipulate the tools and
technologies behind those
transformative developments.
Meanwhile, many colleges and
universities, especially in the
public sector, are struggling
to provide enough space and
faculty to keep up with demand
from students who would
like to enter the field. As Ed
Lazowska, the Bill & Melinda
Gates Chair in Computer
Science & Engineering at the
University of Washington, told
a reporter for the technology
news site GeekWire three years
ago, “Every field is becoming an
information field.” Translation:
Even students in majors who
once would have considered
computer science classes
irrelevant are now seeking
them out, taxing the ability of
colleges and universities to
meet their needs.
Asked to identify their most
difficult IT-related talent issues, 40
percent of the finance executives
surveyed by CFO Research
cited out-and-out “technical
competency,” followed closely
by the 36 percent who cited
“strategic planning and vision.”
(See Figure 2.)
The good news? Helping
companies better understand
their businesses and refine
their strategic vision is one
of the services increasingly
available to them from the
newest generation of third-
party managed IT services.
Once used primarily to provide
tactical support, the best of
these services today can assist
companies in creating a strategic
vision for their IT function, and
in transforming themselves into
digital enterprises. Indeed, 50
percent of the finance executives
surveyed by CFO Research
11 I AMERICA’S GOT TALENT... BUT NOT ENOUGH IT TALENT
FIGURE 1 Business functions most severely impacted by a technology talent shortage
Operations
Finance
IT
Customer service
Sales and marketing
Product development
64%
36%
36%
27%
27%
12%Multiple responses allowed.
identified access to world-
class capabilities as one of the
top benefits of outsourcing IT
activities.
Many companies have already
turned to managed IT services
to bridge the gaps in their own
IT workforce, with generally
favorable results. More than
two-thirds of the finance
executives surveyed—69
percent—say a trusted managed
IT services provider can do
a better job of delivering
IT services than the typical
company can do on its own.
And a stunning 60 percent now
say they would be comfortable
having a managed IT services
provider deliver all of their
company’s IT functionality. In
addition to giving them access
to world-class capabilities, they
say, outsourcing IT services
can free internal resources for
other purposes (57 percent
of respondents), streamline
or increase efficiency for
time-consuming functions
(45 percent), and reduce and
control costs (32 percent).
A small but significant
minority—22 percent—also say
outsourcing IT can improve a
company’s focus.
Many companies also are
looking to manage their way
through the IT labor shortage
by moving some or all of
their IT operations to a cloud-
based environment, largely
eliminating the need to source,
manage, and maintain computer
hardware and software on
their own. Fifty-three percent
of the survey respondents say
their companies are already
using cloud-based services
for fundamental applications
such as data storage and
network hosting, 41 percent
are using cloud-based office
productivity software, and 37
percent are using cloud-based
financial systems. Migrating
higher-value activities to the
cloud has proceeded more
slowly—only 27 percent of
survey respondents say their
companies use cloud-based
data analytics systems, for
example—but the percentage
of firms doing that is expected
to grow. Survey respondents
say their companies see clear
value in technologies such as
mobile applications (69 percent
of respondents), big data and
predictive data analytics (45
percent), social enterprise (24
percent), Internet of Things (24
percent), and other advanced
technologies, all of which
benefit from the scalability,
agility and cost-savings
associated with operating in a
cloud environment.
FIGURE 2 Most difficult talent issues related to current IT staff
40%
Technical competency
Strategic planning and vision
Industry knowledge
Project management
Customer service skills
34%
33%
28%
36%
Multiple responses allowed.
12 I AMERICA’S GOT TALENT... BUT NOT ENOUGH IT TALENT
RSM US is the leading provider
of audit, tax and consulting
services for the middle
market. Our Technology and
Management Consulting
professionals act as strategic
advisors, helping maximize
technology investments and
ensuring stable, compliant IT
environments. Our professionals
average 15+ years of technical
experience.
RSM’s managed IT services
is a highly scalable platform
that combines our industry
knowledge with the essential
IT functions organizations
need to run a high-performing,
innovative IT department.
We are the next generation
managed services provider
(MSP) ready to guide your
organization through its digital
transformation.
RSM utilizes our full range of
services to develop a customized
solution to meet your needs. You
have the flexibility to choose
a co-managed platform, with
our advisors working alongside
your IT staff, or a fully managed
engagement to outsource your
entire IT department. Either
way, your technology support
costs are more consistent, with a
predictable monthly expense.
ABOUT RSM
13 I AMERICA’S GOT TALENT... BUT NOT ENOUGH IT TALENT
To learn more, please visit www.rsmus.com/MITS or call 800-274-3978.
