Reglobalisation is a new topology of globalisation, with societies rethinking relationships and boundaries
Reglobalisation, economic slowdown and ‘digital dithering’ are the top three concerns for CEOs this year.
CIOs need to understand these concerns and address them in their strategic planning over the next 12 to 18 months, says Kristian Steenstrup, distinguished analyst and Gartner fellow.
With business conditions declining, CEOs are looking for ways to sustain growth in revenue, says Steenstrup, at the Gartner IT Symposium/Xpo in the Gold Coast.
“Many boards are asking CEOs to get more returns from digital to counterbalance other difficult business issues,” he points out.
“CEOs think it’s time for digital initiatives to show value. They have been investing in digital for many years, and now expect it to ‘grow up’ and start delivering at scale.”
“If CIOs understand what their CEO needs to achieve, they can shift their agenda to support them.”
Steenstrup warns of deeper changes ahead in business models, rules of competition, products and services.
“Organisations must avoid falling into short term dependency on tactical digital results at the expense of longer-term structural changes, such as mergers and acquisitions and company reorganisations."
He elaborates on the top three concerns and the implications for CIOs:
Globalisation is under pressure, facing major shifts and challenges as governments around the world reassess trade relationships and the rules of trade. Reglobalisation is a new topology of globalisation, with societies rethinking relationships and boundaries.
In the Gartner 2019 CEO Survey, 23 per cent of CEOs says that new international trade tariffs, quotas and other controls would have a significant impact on their business in the next three years, and a further 58 per cent says they have “general concerns” about it.
Organisations must avoid falling into short term dependency on tactical digital results at the expense of longer-term structural changes, such as mergers and acquisitions and company reorganisations
“CIOs must play the role of the trusted ally to the CEO if they’re going to navigate their organisation through these geopolitical shifts,” says Steenstrup.
CIOs should focus on guiding their organisations using geo-flexibility, he states.
This can be achieved by applying data science to stay ahead of competitors by identifying the best geographic business locations and flows.
Deploy cloud-based capabilities to be geographically agile in your operations, he adds. “Exploit data sovereignty rules competitively.”
Exploit geographic moves as “greenfield opportunities” to accelerate digital business transformation.
Economic indicators have been causing increasing concern for CEOs throughout 2019, particularly inverted yield curves, reduced earnings growth, lower trade volumes and reduced confidence indexes.
“CIOs can support their CEOs by being a rounded business contributor to the overall discussion, assisting as an analytical and diagnostic thinker, as well as project manager,” says Steenstrup.
CIOs can help CEOs by challenging tired/traditional measures of productivity that are delivering diminishing returns; identifying new keys to productivity to drive the organisation’s digitally shifting business model; and applying digital and IT innovation to create productivity breakthroughs.
“Identify the most important top measure and set a strident goal for it.”
Many CEOs have not committed as deeply as they should to digitalisation, despite its ability to deliver on their growth priority. They are uncomfortable in an area that is not their area of specialty and in which they feel exposed. Others hesitate due to the cost and the deep changes required.
“We are seeing softening perspectives on digital amongst CEOs,” says Steenstrup. “What they shouldn’t do is give up on digital transformation through this trough of disillusionment, as they will regret it in three to five years. Some companies may not survive; while others will fall behind and find it very hard to catch up.”
CIOs can help their CEOs secure their organisation’s long-term digital vision by crafting a three-horizon digital strategy, which addresses what digital will look like next year, in five years and in 10 years, says Steenstrup.
“Explain how industry disruption will be gradual but inexorable,” he states. “Show the current and the next transformation, and pencil in the one after that.”
The strategy, he adds, must overtly show how today’s progress secures future options, and focus on differentiating, enduring capabilities and long-range measures.
“Be the thinking partner your CEO needs to plot the smart path,” he concludes.
The author attended the Gartner IT Symposium/Xpo at the Gold Coast as a guest of Gartner.
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