CIO issues differ across regions, but all face digital data threats and opportunities: Gartner
- 09 June, 2014 09:22
But while economic conditions and budgets vary across countries, CIOs in both business and public sectors face digital opportunities and threats, reports the analyst firm.
"The CIO survey results clearly show that as digital opportunities and threats pervade every aspect of business and government, the IT and digital agenda for each country, industry and enterprise is becoming more unique," says Dave Aron, Gartner vice president.
"The way businesses and public-sector agencies use information and digital technologies is getting more entwined with their economic, regulatory and competitive contexts, as well as with the state of their business and digital maturity.
“This is a function of every aspect of every business becoming digital — every process, every employee, every business leader, every customer, every interaction, every moment. Just as our businesses are unique, our digital footprints are becoming all the more unique."
The survey was conducted among 2339 CIOs in the fourth quarter of 2013 and represented more than US$300 billion in CIO IT budgets in 77 countries.
Gartner did not release New Zealand specific content, but the segment on Asia Pacific and Japan (APJ) finds businesses expect IT to support growth, and are increasing IT budgets accordingly.
APJ IT leaders reported increases in IT budgets exceeding the global average (0.9 per cent compared with 0.2 per cent globally). Although not a rapid increase, say Gartner analysts Andy Rowsell-Jones, Poh-Ling Lee and Linda Price, this growth allows IT leaders in the region to prepare the ground to "capture digital opportunities" this year.
To capture digital opportunities, CIOs need to deal with speed, innovation and uncertainty. This requires operating two modes of enterprise IT: conventional and nonlinear.
The three list three priorities for APJ CIOs as they work to ‘tame the digital dragon’:
Renovate the core of IT :Top technology priorities for 2014 reveal two complementary goals: Renovating the core of IT, and exploiting new technologies and trends. “Exploiting the new speaks for itself. Meanwhile, the core of enterprise IT — infrastructure, applications (such as ERP), information and sourcing — was built for the IT past and needs to be renovated for the digital future.”
Build bimodal capability: According to Gartner, there are inherent tensions between doing IT "right" and doing IT fast, doing IT safely and doing IT innovatively, and working the plan and adapting. To capture digital opportunities, CIOs need to deal with speed, innovation and uncertainty. This requires operating two modes of enterprise IT: conventional and nonlinear. Conventional refers to more traditional waterfall development projects, and nonlinear refers to more short-term, agile and lean start-up activities.
Develop digital leadership: Most businesses have established IT leadership, strategy and governance, but have a vacuum in digital leadership. To exploit digital opportunities and ensure that the core of IT services is ready, there must be clear digital leadership, strategy and governance, and all business executives must become digitally savvy.
The report likewise tackles the role of chief digital officer in the organisation. Gartner says only around 11 percent of businesses in the APJ have a CDO, but expects it to become more common in next five years.
The scope of the role is also expected to grow. Globally, 42 per cent of CDOs are focused on digital marketing, but this number is falling as more CDOs become true advisors on digital business strategy to the CEO and board of directors, and so they move into the arena of business strategy, says Gartner.
If the organisation does not have a CDO, should the CIO take on the role? Rowsell-Jones, Lee and Price write this is possible but cite the challenges of holding this dual role.
“In general, the CDO is more of an extension of the chief strategy officer than the CIO, since it is a strategy role informed by the digital context. Board-level strategy, communication and influencing skills are key.”
As of last year, they note, 35 per cent of CDOs came primarily from a business strategy or marketing background; and 19 per cent have an IT background. The rest have mixed or other backgrounds.
Related: Simon Pomeroy of Westpac NZ: Inside the digital suite A background in human resources led Simon Pomeroy to one of the most in demand executive roles today. He lifts the lid on what it is like to be chief digital officer in one of the largest enterprises in New Zealand, and in a very competitive sector.
Gartner’s take on CIO issues in other regions:
CIOs in North America report an IT budget increase of 1.8 per cent this year. This means they have more oom to maneuvre than their counterparts in Europe, Middle East and Africa where EMEA, where the average IT budget is down 2.4 per cent.
Sixty-two per cent of CIOs in North America are expecting to change technology and sourcing strategies in the next two to three years; however, this is the lowest percentage in any of the major geographies. For example, 82 per cent of CIOs in China expect to change their technology and sourcing approach in the next two to three years.
"North American CIOs should be careful not to become complacent, and they should instead keep a constant focus on optimizing their sourcing mix, especially to ensure there is enough innovation," says analyst Dave Aron.
CIOs in China report a bigger focus on growth and innovation, and a significantly higher IT budget increase of 13 per cent this year, way above the global average of 0.2 per cent. However, at least 45 per cent of IT spending is outside the IT organisation, compared with the global average of 26 per cent. China appears bullish on digital and cloud, with 39 per cent of CIO respondents from enterprises in China identifying a C-level digital leader (such as a chief digital officer (CDO) in their business, versus 7 per cent globally.
Sixty-one per cent of Chinese CIOs report that they have made a significant investment in public cloud, versus 25 per cent globally, reports Gartner.
UK and Ireland:
Globally, 25 per cent of CIOs have already made significant cloud investments. For Ireland and the UK, the move toward the cloud is even more aggressive than the global average. In the UK, for example, over a quarter (28 per cent) of CIOs report already making significant cloud investments.
Most companies in Latin America are confident they should take advantage of digital economy opportunities. A relevant trend is 25 per cent of IT spend is outside of the IT budget (26 per cent globally). For Brazil, this has reached 34 per cent. This means that business areas are increasingly driving budget decisions associated to their products and related IT support.
The survey also reveals growing digital confidence among CIOs in the region. While 42 per cent of global CIO respondents think they don't have the IT skills and capabilities to meet digital challenges, in Latin America only 26 per cent of IT organisations think they are not ready to "tame the digital dragon”, reports Gartner.
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