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Retail CIOs focus on data security, digital innovation

Kenneth Corbin | Feb. 23, 2015
In the wake of widely publicized breaches at firms like Target and Home Depot, retail CIOs are nearly unanimous in naming data security as one of their top priorities for 2015, according to a new survey.

In the wake of widely publicized breaches at firms like Target and Home Depot, retail CIOs are nearly unanimous in naming data security as one of their top priorities for 2015, according to a new survey.

In that poll (PDF available here), produced by Forrester Research and the National Retail Federation (NRF), 97 percent of retail CIOs said that efforts to strengthen their cybersecurity defenses rank in the top five items on their agenda this year.

And with good reason: Forester is projecting that at least 60 percent of businesses will uncover a data breach that exposes sensitive information this year.

"The high profile breaches in 2014 show that perimeter defense is no match for organized crime targeting customer data," says George Lawrie, research vice president and principal analyst at Forrester.

CIOs Must Advocate for Strong Corporate Governance

Those security breaches also underscored another top concern. Seventy-eight percent of the retail CIOs surveyed said that an effort to improve corporate governance within their firms is among their top five internal priorities for the coming year, up from just 24 percent who said in the same in the NRF's 2014 survey.

"As the executive overseeing technology principles and practices, the retail CIO must be the advocate for strong corporate-level technology governance," says Tom Litchford, the NRF's vice president of retail technology.

The report also reflects the concern that CIOs are expressing about the emergence of shadow IT throughout their firms, in cases where "their line-of-business colleagues may become impatient and invest independently in everything from location technologies and independently developed mobile apps to Software-as-a-Service business intelligence solutions."

"In this rapidly evolving digital era, more and more departmental budgets have a technology component, particularly in marketing where we're seeing significant spend shifts from traditional media to more focus on digital media," Litchford says. "Coupled with the business' need to evolve faster in response to the ever-changing consumer behaviors and preferences, there's a real risk in technology investments becoming siloed, not only exposing the business to elevated security risk, but also potentially impeding their ability to serve their customers."

Budget Restrictions Constrain CIO Efforts to Fight Cybercrime

Budgets remain a challenge for the CIO. Of the retail leaders polled, 40 percent said they expect to work with a flat or declining budget in 2015, and another 34 percent said that they expect to see modest increases of less than 10 percent.

The difficulty of pursuing new technology initiatives while operating under a constrained budget was a hot topic at a meeting the NRF held in January, according to Litchford.

"While there's no silver bullet, a couple of key themes emerged," he says of those discussions. "First was the ability to leverage existing investments more fully to address emerging business requirements and drive new innovation. Then there was the governance discussion, and how the C-suite must prioritize and execute against a shared technology agenda. As every departmental budget becomes a technology budget, it's paramount for the CIO to take a strategic leadership role in helping the business properly prioritize technology investments."

 

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