As the technologies and trends that power digitalisation move to centre stage, CIOs have a unique opportunity to become digital leaders, reports Gartner in its latest global survey of CIOs.
CIOs are fully aware they will need to change in order to succeed in digital business, with 75 per cent of respondents saying they need to adapt their leadership style in the next three years, according to Gartner analysts who presented the findings of the report Flipping to Digital Leadership: The 2015 CIO Agenda at their annual symposium in Orlando, Florida.
"To grasp the digital opportunity, incrementally improving IT performance isn't enough," says Dave Aron, vice president and Gartner fellow.
“Digitalisation is no longer a sideshow — it has moved to centre 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 survey included responses from 2,810 CIOs, representing more than US$397 billion in CIO IT budgets in 84 countries.
Digitalisation is no longer a sideshow — it has moved to centre stage and is changing the whole game.
According to the 2015 CIO survey, 89 per cent of CIOs agree that in addition to the considerable opportunities afforded by digitalisation, the digital world engenders new, vastly different and higher levels of risk, and 69 per cent 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, says Gartner.
Gartner says despite the rise of roles, such as the chief digital officer, CIOs are not doomed to be observers of the digital revolution. The survey, for instance, finds 41 per cent of CIOs are reporting to the 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 1 per cent from last year. CIOs estimate that 79 per cent 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.
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Gartner says the biggest challenge when it comes to digital opportunity for CIOs is the fact that the IT discipline within most enterprises has developed a set of behaviours 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 contextualised, and looking to exploit unstructured data, and run data-led experiments.
Secondly, says Gartner, 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).
"Being a powerful digital leader and influencer takes time and CIOs need to spend time being digital leaders," says Aron. "Running an IT organisation 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 — 5 per cent 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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