Kiwi CIOs have acknowledged the need to adapt their leadership in order to ensure their companies survive and thrive in an increasingly digital world – however, they’re also facing flat IT budgets.
Gartner’s annual global CIO survey, which includes 161 CIOs from Australia and New Zealand, shows 79% of respondents felt they needed to adapt their leadership style in the next three years in order to grasp the digital opportunity.
Speaking at the Gartner Symposium/ITxpo on the Gold Coast yesterday, Gartner vice president and executive partner Graham Waller said many technology leaders face three persistent issues that impede digital opportunities.
“In order to grasp digital opportunities, CIOs need to flip from legacy first to digital first in terms of technology leadership, from what’s visible to what’s truly valuable in value leadership, and from control first to vision first in people leadership,” Waller says.
“In short, to thrive in this digital era, CIOs must flip to digital leadership.
“The digital world has moved from the shadows to centre stage. Digital is a game changer, creating winners and losers in all industries and geographies, including Australia and New Zealand.”
Waller says being a powerful digital leader and influencer takes time, and control-first leadership doesn’t suit the high-speed, innovative, uncertain nature of the digital world and can be an obstacle.
Instead, he says high-performing CIOs are spending less time running the IT shop and making extra time to engage their board and senior leadership, flipping people leadership from control to vision.
Having a deputy – a COO of IT – reduces the time a CIO spends running IT by 5%, or around one day a month, according to the 2015 CIO Agenda. Despite this, only 42% of ANZ CIOs have a deputy or similar, compared to 47% worldwide.
Waller says that vision first, or inspirational leadership, is one of the most powerful attributes of the digital leader, who needs to flip from aligning with corporate culture to building a digital culture.
“A traditional, risk-averse, control oriented corporate and IT culture will devour even the most well informed digital business strategy like a small snack.” To avoid this, he says CIOs need to lead a digital cultural revolution that helps the business understand and get excited about where digitisation can take them.
The survey says 93% of ANZ CIOs agree that in addition to the considerable opportunities it brings, the digital world is creating new, different and higher levels of risk, and 66% say 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, Gartner says.
The report says the good news for CIOs is that they are being given the opportunity to be digital leaders, with 35% of ANZ CIOs reporting to their CEO, up from 30% two years ago. However, internationally, we’re trailing international counterparts, 41% of whom report direct to their CEOs.
“This is a return to one of the highest levels it has ever been,” Gartner says of the ANZ results, which it says is a result of the digital narrative gaining prominence in the boardroom and on the executive committee.
In a 2014 Gartner survey, ANZ CEOs allocated 22% of the responsibility for leading digital innovation and change over the next two years to the CIO, up on the global figure of 15%.
Despite the pressure to lead businesses digital innovation, IT budgets are not growing according to the CIO survey, with 25% of ANZ CIOs expecting a budget cut, compared with 16% globally.
The average IT budget in ANZ will be down -0.2% in 2015 compared to 2014, slightly lower than the 1% growth expected globally and the 3% growth expected across Asia Pacific.
Local CIOs estimate that 82% of technology spending will be ‘inside’ the IT budget, but much digital innovation can, and will be, funded outside the planned IT spending.