ANZ CIOs leading digital transformation

BI, analytics and cloud top the list of priorities for IT spending for local CIOs, as companies seek to harvest real business value from their data, but it is digital transformation that is foremost for many CIOs.

The results of a new Gartner survey, which includes 175 CIOs across Australia and New Zealand, shows ANZ CIOs expect digital revenue to grow from 14% now, to 32% of total revenue in the next five years. In the ANZ public sector, CIOs are predicting a rise in digital processes from 38% to 79%.

"While the meaning of digital revenue and processes is open to interpretation, it is clear that digital business is a reality now, and it is expected to be a significant source of competitive advantage," Gartner says.

Graham Waller, Gartner vice president and co-author of a new Gartner book, Digital to the Core, says the Australian and New Zealand survey data shows a higher proportion of CIOs here lead digital transformation and innovation in their enterprise, but progress towards digital business in ANZ is slower.

"As digitalisation is intensifying, it is becoming clear that hardcoded business and operational models will not suffice and that a more adaptable approach is required," Waller says. "Leading businesses and government agencies are looking less like fixed 'systems' and more like platforms.

"A platform provides the business with a foundation where resources can come together – with the ability to rapidly configure groups of assets both across the business and the broader ecosystem – to create value.

Waller says technologies have long recognised the power of platform approaches to information and technology architecture. "What is new is that platform dynamics are being applied to create value in all aspects of the business," he says.

The survey found that 52% of ANZ CIOs are leaders of digital transformation in their enterprise, and more than 40% are the innovation leader – figures that are significantly higher than the global averages of 40% and 30% respectively.

"These results show that CIOs are being given the opportunity to lead digital transformation, but they must adapt their leadership style to exploit platform effects in leadership, building a network of digital leadership inside and outside the enterprise," Waller says.

The survey also found that despite the talk around chief digital officers (CDO), those roles are not being put in place as fast as expected. Just 9.1% of ANZ enterprises currently have a CDO, around the same as the global average of 9.3%, which was up from 6.6% globally two years ago.

According to the survey, 49% of ANZ CIOs believe there is a talent crisis, yet there is surprisingly little talent innovation, with information and analytics skills identified as the biggest talent gap both in ANZ and globally.

Project management and architecture skills were the next two biggest gaps identified in  ANZ, while globally it was business acumen and security.

"It is time to think of talent as a platform and innovate with it," Waller says.

"CIOs must look at digital talent beyond the boundaries of the IT organisation, and indeed beyond the boundaries of the enterprise. Innovative talent management opportunities abound and include getting closer to universities by helping define and deliver courses and projects, performing reverse mentoring and implementing job rotations.

"CIOs should also think of partners as extensions of the talent pool," he adds.

Technological priorities for 2016

The survey shows the purse strings are loosening locally – but only a little. Australian and New Zealand CIOs expect an average budget increase of 2.9%, slightly higher than the global weighted average of 2.2% and an improvement over last year's expected slight decline in ANZ of 0.2%.

BI/analytics were cited by 43% of CIOs as one of their top three areas of new spending in 2016 – something that is in line with global results which also saw BI/analytics top of the list.

Cloud (33%) was second highest priority for ANZ CIOs, while digitalisation/digital marketing and mobile both shared third spot at 24%.

Gartner says the top areas of new technology investments clearly show that significant spending and opportunity continues in big data and analytics and that cloud continues to have significant momentum.

Waller says as has always been the case with business intelligence, the key to big data is to point it at opportunities to harvest real business value from insight.

"The opportunity is to monetise big data, underpinned by the cloud," Waller says.