Taking the pulse of digital transformation
Illustration: Ikon Images/Grundini
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Taking the pulse of digital transformation

Jim Mortleman — February 2019
Survey shows many CIOs are struggling to accelerate their organization’s digital journey — and points to the obstacles frustrating their progress.

Around half of CIOs from large companies are struggling with the demands of digital transformation, suggests new UK-centered research from Citrix Systems.

When asked to rate their level of digital maturity, 37% of the 400 UK-based tech leaders questioned said their digital technology was only ‘functionally competent,’ in other words it works but is neither ‘smart’ nor used particularly effectively. A further 13% said their digital transformation journey was still ‘in its infancy’, characterized by siloed data and systems and related support that underperformed.

On the flip side, the survey showed the other half of organizations is making big progress, showing that the gap between leaders and laggards is widening, according to the report ‘Nowhere to Hide: UK CIOs and the Age of Digital Change.’  

The CIOs at those leading companies variously rated their digital maturity as ‘functionally excellent’ (25%), ‘strategic’ (17%) or ‘agile’ (6%).

“CitrixSurvey”

The research also tried to assess another gap: the degree to which CIOs feel they have completed their vision or had their aims frustrated by different obstacles. When questioned about how they’d fulfilled their vision at their previous organization, only 4 in 10 felt they had completely achieved their goals. About half (53%) said they’d achieved some, with the rest admitting they’d achieved barely any (5%) or none at all (1%).

One reason stood out for an absence of complete success: almost three-quarters (73%) blamed the IT infrastructure they’d inherited from their predecessors, arguing that this made the job of transforming the organization significantly more difficult.

“CitrixSurvey”

IT: the cost center label

However, commenting on the findings, former CIO of the UK local authoriy Hampshire County Council, Jos Creese — now an independent IT analyst — questioned the motives behind this response: “It may be partly an excuse: like the hairdresser who asks who could possibly have cut your hair so badly last time. It’s about making clear just how hard a job you have inherited, and therefore a justification for resources and support you might ask for, as well as providing an excuse if you fall short.”

Other reasons cited by CIOs for their unfulfilled goals included internal politics and entrenched ways of working by colleagues (24%), unrealistic management demands for immediate ROI (22%) and budgetary constraints (22%).

But perhaps the most significant finding in this regard was that 76% of all CIOs – even those who claim to be doing well digitally — feel their organization still views IT as a cost center. Yet, contradictorily, 80% claim their organization views IT as an enabler of digital transformation, with 76% also saying it considers IT as a driver of new business opportunities.

“In many organisations, there is a gap between some of the rhetoric of digital transformation and the reality,” Creese says. “How do you square the idea that in many organizations IT is being viewed simultaneously as a cost center, as the engine room to support every part of the business, and the river of productivity, transformation and new business opportunity? On one level, you might reasonably say you can’t, but the fact is that IT is all of these things and more. It's a challenging picture, and not for a faint-hearted CIO.”
Adding CDO digital pixie dust

The enduring perception of IT as a cost center seems to be one key reason for the rise of the chief digital officer (CDO). “We found 60% of those surveyed have hired a CDO to give digital the attention and profile it needs to take root,” said the report.

Creese believes putting digital transformation in the hands of a new function untainted by the negative perceptions that often (rightly or wrongly) afflict IT departments can be a smart move, although the survey suggests many CIOs are wary of doing so. One in ten remains sceptical of the need for the CDO role and a further 44% see it only as a transitional role that will be redundant within five years.

“Some CIOs are sceptical of the need for a CDO, but possibly not always for the right reasons. Maybe they are taking it too personally, or perhaps they have been found wanting. For digital to be successful, the appointed leader needs strong business credentials, and maybe that does call for a fresh start if the CIO is seen to be just too disconnected from business matters. Perception is a powerful thing and sometimes you just have to recognize the symbolic value of a move.”
Transforming the CIO

Digital technology may be transforming everything, but the survey indicates there’s a significant group of CIOs who are not moving fast enough at a personal level. Many business cases designed to justify IT investment are still made purely because a contract is ending or an upgrade is due — and that is not good enough any more, observes Sarah Flannigan, a CIO who has worked for UK heritage conservation charity National Trust and EDF Energy, among others. “Today, digital investment must be justified on business outcomes achieved rather than technology inputs,” she says.

CIOs in organizations where digital transformation is showing success, meanwhile, are those who embrace it holistically and ensure technology is driven first and foremost by the needs of the people using it, she notes. “In my work at the National Trust, for example, the organization embraced digital transformation from end to end, and it made all the difference. Because it was a people-led change, that shaped and defined everything. Yes, we brought in new, transformative technologies but we engaged with the people — including 67,000 volunteers — first. Technology projects have to be approached that way around.”

• Download the full report here

 

First published February 2019
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