CIOs and IT leaders must take action to accelerate time to value and drive top and bottom-line enterprise growth from digital investments, according to Gartner’s annual global survey of CIOs and technology executives, whose findings were presented during Gartner IT Symposium/Xpo, taking place in Barcelona last week.
Gartner Analyst Daniel Sanchez-Reina introduced the firm's agenda for CIOs and Technology Executives for 2023 by noting that "CEOs and boards anticipated that investments in digital assets, channels and digital business capabilities would accelerate growth beyond what was previously possible. Now, business leadership expects to see these digital-driven improvements reflected in enterprise financials". As a consequence, "The pressure on CIOs to deliver digital dividends is higher than ever," he said.
According to Gartner's survey, EMEA CIOs expect IT budgets to increase 4.4% on average in 2023. While that growth rate appears healthy, it is however less than the 6.5% expected inflation. "A triple squeeze of economic pressure, scarce and expensive talent and ongoing supply challenges is heightening the desire and urgency to realize time to value," Daniel Sanchez-Reina noted.
"There are two steps to accelerate digital dividends," he said. "Reconcile execution silos and catalyze unconventional talent and practices."
Prioritize the Right Digital Initiatives and Eliminate Silos
What does that mean? Regarding the first step, the survey found that 94% of EMEA organizations struggle with developing a vision for digital change, often due to competing expectations from different stakeholders. To drive financial outcomes, CIOs must reconcile siloed initiatives by using a visual metrics hierarchy to communicate and demonstrate interdependencies across related digital initiatives.
"CIOs must prioritize digital initiatives with market-facing, growth impact," said Daniel Sanchez-Reina. "For some CIOs, this means stepping out of their comfort zone of internal back-office automation to instead focus on customer or constituent-facing initiatives." He explained that many CIOs see themselves as service providers, just delivering on the specific initiatives that individual business units ask for. "Instead", he said, "the CIO needs to identify the most promising initiatives and partners, then reconcile all of those initiatives into global business outcomes."
CIOs should connect with functional leaders for each digital initiative to understand what "improvement" means and how it can be measured. Creating a picture that reflects the hierarchy of technical and business outcome metrics for each initiative will help identify the chain of accountability that will collectively deliver the dividend in focus.
Spread Digital Dexterity across the Enterprise using Unconventional Resources
While strategic engagement of business unit leaders is necessary to accelerate digital initiatives, the survey exposed that the heavy burden of digital delivery is still not equally executed among IT and business departments. For example, only 32% of EMEA CIOs said that business functions participate in agile digital execution teams.
"Over-dependence on IT staff for digital delivery reflects a traditional mindset, which can impede agility," said Gartner's analyst. "EMEA CIOs must embrace democratized digital delivery by design to accelerate time to value. Equipping and empowering those outside of IT – especially business technologists – to build digitalized capabilities, assets and channels can help achieve business goals faster." Business technologists are people outside of IT who not only use technology but also produce it, using things like low-code programming and business intelligence solutions.
Loaning IT staff to fusion teams that combine business experts, business technologists and IT staff will catalyze a team that is focused on achieving digital business outcomes, while also opening the way for reciprocity, such as integrating subject-matter experts from the business into an IT-led fusion team.
Many CIOs continue to struggle to hire and retain IT talent to accelerate digital initiatives. However, the survey identified numerous sources of technology talent that are untapped. For example, only 12% of EMEA companies use students - through internships and relationships with schools - to help develop technological capabilities and only 24% use gig workers.
"Talent shortages are among the greatest hindrances to digital," said Daniel Sanchez-Reina. "CIOs are often limited by policies related to preferred providers or employment contracts. They must stress to business and HR leadership that engaging unconventional talent sources can help accelerate the realization of digital dividends," he concluded.
The 2023 Gartner CIO and Technology Executive Survey gathered data from 2,203 CIO respondents in 81 countries and all major industries, representing approximately $15 trillion in revenue or public-sector budgets and $322 billion in IT spending.
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