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CEOs shying away from 'transformational' tech - despite big productivity goals

12 May 2017

Local CIOs need to take on a more aggressive evangelising role to encourage their CEOs to look beyond conventional technologies to more transformative offerings in order to help CEOs achieve their productivity expectations according to a new survey.

The Gartner 2017 CEO Survey shows that while digital transformation and the ‘hot’ topics of blockchain, IoT, AI and robotics may be garnering all the headlines, Asia Pacific chief executives are focused on more conventional technologies such as cloud, ERP, CRM and analytics, despite having ‘aggressive’ productivity gains.

Gartner says the survey results highlight a big gap between what CEOs are looking to achieve and their technology spending priorities.

The survey shows that Asia Pacific chief executives expect productivity in their organisations to increase by 24% by the end of 2018, with revenue – cited by 26% of respondents – and profitability (15%) cited as the top two metrics of success.

However, when it comes to achieving those productivity gains, the chief executives believe conventional technologies will help tem, rather than technologies that support digital transformation.

Partha Iyengar, Gartner Fellow and vice president, says the CEOs expect IT to play a strong role in increasing their profit margins, while maintaining sales growth.

“The problem is that Asia Pacific firms aren’t moving fast enough to capitalise on this potential,” Iyengar says.

“Their focus on conventional technologies will likely have less of a transformative effect than more innovative technologies,” he adds.

The survey found IT ranks as the second business priority, after growth, for companies – thie highest ranking IT has achieved in the last three years.

Gartner says with Asia Pacific having the fastest growing economy, local businesses are less worried about sales growth than companies in other regions, instead focusing on increasing profit rather than revenue growth.

“Digital business offers a way for Asia Pacific firms to lower their cost structure drastically and thereby increase margins, but these firms are not pursuing digital business as aggressively as they could,” Gartner says.

The analyst firm says Asia Pacific enterprises are behind their global counterparts in terms of digital maturity, and slightly behind in the phase of digital business they are in.

“CIOs need to take on an evagelising role with the chief executive and other business leaders about the transformative possibilities of digital business, using real examples,” Iyengar says.

“Many business leaders still cannot describe digital business well and need education.”

The survey also shows less investment on the part of Asia Pacific companies in terms of taking equity stakes in technology or digital business entities – even though respondents admit that equity stakes pay the biggest dividends.

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