Business leaders look to CIOs to drive growth
Survey reveals that senior executives expect CIOs to take the lead in digital innovation and transformation.
Revenue growth is now the top priority for most business leaders — and they are increasingly ready and willing to invest in digital initiatives in order to spur expansion.
That’s the high-level message from Gartner’s latest survey on attitudes among CEOs and other senior executives towards information technology. And the good news for CIOs is that their bosses and business peers see a pivotal role for IT leaders in their digital transformation plans — although not all will be up to the job.
The 2014 Gartner CEO and Senior Executive Survey, which polled the views of 410 business heads in organizations with revenues of $250 million or more, shows that 51% of them intend to increase their organization's investment in IT during 2014, while 48% are planning to invest more in digital capabilities.
“CEOs who have noticed the rising importance of technology-related change must now invest in that insight,” says Gartner analyst Mark Raskino. Technology ‘talk points,’ he notes, are becoming far more visible in key communications such as CEO financial results presentations, investor calls and business press interviews.
In keeping with that, many technology investments will be focused on growth-related activities, particularly front-office capabilities for selling and marketing. There’s also a strong interest in basing business operations in the cloud and in data analytics, Gartner notes.
Naive about digital business
When asked to select up to five technology-related areas in which they are likely to invest over the next five years, one answer jumped to the fore: digital marketing. Ecommerce and customer experience management tied for second place, followed by business analytics.
But, as Raskino points out, not all business leaders are clear about the basis for their enthusiasm: “Looking at this five-year investment perspective of the majority of respondents, something quickly becomes clear,” he says. “Many business leaders are lagging behind in their understanding of what digital business means, and [of] the disruptions that are only slightly ahead of them.”
And the persistence of older ways of thinking among senior management could work to thwart the CIO’s efforts in this area, he suggests. “A decade of believing IT was a commodity function, to be mostly outsourced, has left many business leaders in a position of relative weakness. Their vision and knowledge of the changes that technology makes possible are not strong enough. Their abilities in making deep, technology-enabled business change happen are not well-practiced.”
That means CIOs will be responsible for closing a big gap in understanding, says Raskino, by educating the board, executives, senior and middle management layers to both the huge range of digital opportunities, as well as the real limitations that might temper their ambitions. That is a critical challenge highlighted in interviews with IT leaders such as UBS’s Oliver Bussmann and Jeroen Tas of Philips.
However, Raskino adds that the findings suggest that business leaders see digital as a ‘team game’ — although it's one in which the CIO still has the highest visibility. While around one-quarter of respondents say that their company now has a chief digital officer (CDO), when Gartner asked the survey group to whom they would allocate relative responsibility for leading digital innovation and change over the next two years, the CIO came out on top, ahead of the chief marketing officer, business unit heads, the chief financial officer, the chief operating officer, the chief technology officer and chief digital officer, in that order. (See article, CIOs, CDOs and CMOs: New IT roles and responsibilties.)
But all of these roles — and others, too — are likely to have some involvement in digital initiatives, suggesting that a lack of clear leadership and direction could become an issue for some organizations. As Raskino puts it: “CEOs clearly see digital as very much a collective operating-committee endeavor.”
As such, he adds, it’s by no means a sure thing that every CIO will be asked to captain the team — or that all CIOs will be up to that task in any case. “Expecting the CIO to be the prime mover in digital is a fairly sudden and major change of emphasis,” he says. “The sudden shift in expectation is likely to lead to some disappointments and we expect that, in turn, to lead to some churn in the role.”
His advice to CIOs? “Relentlessly educate your CEO, executive team and board on digital business advances and technology progress implications. It’s your job to know and tell, not just buy and deploy. Lead digital behavior change by example. Personally act with urgency, take active risks to win growth and initiate digital business innovation using a fail-fast, exploratory approach,” he counsels.