As the technologies and trends that power digitalization move to
center stage, CIOs are being presented with a unique opportunity to
become digital leaders according to a global survey of CIOs by
Gartner. The survey showed that CIOs are fully aware that they will
need to change in order to succeed in digital business, with 75
percent of respondents saying that they need to adapt their
leadership style in the next three years.
"To grasp the digital opportunity, incrementally improving IT
performance isn't enough," said Dave Aron, vice president and
Gartner Fellow. Digitalization is no longer a sideshow — it has
moved to center stage and is changing the whole game. CIOs now have a
unique opportunity, but they must 'flip' their information,
technology, value and people leadership practices to deliver on the
digital promise."
The worldwide survey included responses from 2,810 CIOs,
representing more than $397 billion in CIO IT budgets in 84
countries. The Gartner report "Flipping to Digital Leadership:
The 2015 CIO Agenda," represents the most comprehensive
examination of digital business opportunities and threats and CIO
strategies.
Gartner's last CIO Survey — "Taming the Digital Dragon: The
2014 CIO Agenda" — explored the advent of the third era of
enterprise IT, where information and technology make a fundamentally
different contribution to the business, less tied to efficiency and
effectiveness of internal processes than to enabling disruptive new
products, services and business models. Nearly one year later, the
third era is here, and digitalization is increasingly determining the
winners and losers in all industries.
"This isn't just a high-tech story, a U.S. story, a
private-sector story, a large-company story or a startup story,"
said Mr. Aron. "Digitalization is transforming all types of
companies and public sector agencies. More often than not, these
transformations represent both massive opportunities and substantial
challenges for the CIO and the IT organization. Digitalization is not
only a way to gain a competitive edge, but also provides a powerful
ability to flip disadvantages into advantages."
According to the 2015 CIO Survey, 89 percent of CIOs agree that in
addition to the considerable opportunities afforded by
digitalization, the digital world engenders new, vastly different and
higher levels of risk, and 69 percent said that the discipline of
risk management is not keeping up. CIOs therefore need to review with
the enterprise and IT risk leaders whether risk management is
adapting fast enough to a digital world.
The exciting news for CIOs, is that despite the rise of roles,
such as the chief digital officer, they are not doomed to be an
observer of the digital revolution. According the survey, 41 percent
of CIOs are reporting to their CEO. This is a return to one of the
highest levels it has ever been, a result of the digital narrative
gaining prominence in the boardroom and on the executive committee.
Even stronger evidence of opportunity for CIOs is the fact that the
survey reveals that CEOs expect them to lead the digital charge
during this critical transition period.
However, as in last year's CIO survey, it appears that IT budgets
are not growing exuberantly. The average IT budget will grow by just
one percent from 2014 to 2015. CIOs estimate that 79 percent of IT
spending will be "inside" the IT budget (up slightly from
last year), but much digital innovation can and will be funded
outside the planned IT spending.
Perhaps the biggest hurdle when it comes to digital opportunity
for CIOs is the fact that the IT discipline within most enterprises
has developed a set of behaviors and beliefs over many years, which
are ill-suited to exploiting digital opportunities and responding to
digital threats. To start with, most enterprises still think of
innovation in terms of the technology paradigm. If this continues,
the digital opportunity may be lost. Digital leadership means
flipping the approach from legacy first to digital first, assuming
all solutions will be cloud based, designed for mobile and highly
contextualized, and looking to exploit unstructured data, and run
data-led experiments. Secondly, most enterprises and their CIOs
disproportionately focus on what is easily measurable (e.g., IT
cost), rather than what is most valuable or requiring the most
attention (e.g., the value of building a digital capability) —
another situation that has to flip.
"During the second IT era of industrialization, people
leadership was honed to emphasize precision, discipline and tight
control," said Graham Waller, vice president and executive
partner for Gartner Executive Programs. "Therefore, through both
nature and nurture, CIOs have evolved into control-style pragmatic
leaders. Given the characteristics of the new digital era, this bias
is dangerous. CIOs must invert their style to be more vision-led and
inspirational."
The survey results underline the fact that CIOs already know this.
Seventy-three percent of surveyed CIOs say that they have changed
their leadership style over the last three years, and 75 percent say
they must change it over the next three years to flip their
leadership style from "control first" to "vision
first."
"Being a powerful digital leader and influencer takes time
and CIOs need to spend time being digital leaders," said Mr.
Aron. "Running an IT organization is a complex business, and
when we compare the 2011 and 2015 Gartner CIO Surveys, we find that
the average CIO is spending more, not less, time running the IT shop
— five percent more, or an extra day per month. However, the survey
data also tells us that, all things being equal, the CIOs with higher
performance as IT leaders spend significantly less time running the
IT shop and delegate some business unit leader engagement. This gives
them an extra five percent 'time bonus,' or a day per month, to
engage the board, senior leadership and external customers."
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