CIOs are eager to take up new roles that involve engaging with innovative startups, as per a new survey.
The COVID-19 pandemic has evolved CIO roles as they strive to balance business priorities with budgetary constraints. Moreover, they are also trying to look for innovation opportunities by increasing investment in startups and IT spending, as per the latest survey of 100 CIOs and IT leaders by venture capital firm Sapphire Ventures.
The “Startup Engagement Trends for the Crisis CIO” report found that 85% of enterprises are “more likely” to team up with startups even during the current pandemic-led economic slowdown. The majority of the respondents said that the venture capital community is the top channel for discovering innovative startups, followed by industry analyst reports, conferences, and professional networks.
Companies are approaching the proof-of-concept (POC) process, which allows them to evaluate startup technologies as it is vital for driving innovation. Close to 60% of CIOs say their POCs are a part of their startup evaluation process, while the remaining 40% are paid. Nearly 10% of current IT vendor budgets are spent on startups, and this is projected to hit 15% in the next 12 months, found the report.
CIO involvement in startups has significantly increased in 2020 as they are taking up more roles as advisors, mentors, and investors. Even if they are not directly involved with startups, many CIOs are eager to engage with them, working as consultants. They are eager to team up with startups, especially during the current crisis, and are focused on business strategy and supporting a challenging marketplace. The surveyed CIOs cited limited geographical reach, financial viability, and unproven track records as some of the top challenges to work with startups.
Shruti Tournatory, VP of Business Development and go-to-market at Sapphire Ventures, said, “There’s this sense of the greater ability to influence the startup product roadmap. That’s something that we actually see a lot of successful startups pitching to CIOs and IT organizations where they offer customers the opportunity to help direct the future of the product.”
The pandemic has created an interesting atmosphere that provides an opportunity for CIOs to be more creative. It is expected that CIOs will most likely engage and collaborate with startups that are more focused on AI, cybersecurity, or infrastructure, considering the current marketing competition.
The report found that two-thirds of CIOs and senior IT decision-makers currently invest in AI and ML startups. Meanwhile, over half of them are keener on investing in augmented reality and new-age data management startups. In fact, the pandemic has resulted in a significant increase in the role of startups in helping CIOs in the transition to remote work.
The CIO has been one of the most key leaders in the pandemic as they were responsible for maintaining a balance between business continuity and competitive advantage. IT and business leaders are teaming up with startups as they play a key role in helping enterprise them modernize their businesses and adapt to the evolving conditions.