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Gartner: What CEOs think of Digital Business...

16 Apr 2014

This week we published the 2014 Gartner CEO and Senior Executive Survey.

Among the key findings is evidence of a bullish attitude by CEOs and senior executives toward technology-fueled business growth in 2014 and 2015.

The same bullish attitude can’t be said for investors in tech-related stocks recently.

What really caught my eye in this year’s survey is that IT-related issues, including mentions of digital, are much more prominent as key priorities for CEOs.

Gartner Fellow Mark Raskino and his research colleagues who authored the report found that 7 percent of CEOs rank IT as one of their top priorities.

This might sound infinitesimally small (as context, the broad topic of “growth” was ranked as the top priority for 33 percent of CEOs), but this supports the broader trend that our research organisation reports, in addition to my own observations working with CEOs around the world.

CEOs are undoubtedly taking a greater interest in applying technology more aggressively in their organisations.

In the survey, nearly 50 percent of the IT-related priorities that CEOs gave specifically mentioned digital, online, social, cloud and mobile. Overall, CEOs referenced technologies frequently associated with client facing and revenue generating programs.

Drilling a little deeper into the survey, CEOs increasingly reported their growing investment in front-office technology-related capabilities that are used to help in sales and marketing.

The research also noted strong interest among CEOs in basing business operations in the cloud and in using data-driven decision-making via business analytics, big data and data science.

Process-centric themes, which tend to associate with back-office efficiency uses of technology, are much further down the list where we see items such as business process outsourcing, dynamic business process management and electronic service enablement.

What does this tell us?

CEOs are making the transition to a progressive mindset of investing in technology to drive growth and away from only thinking about generating internal cost reductions and efficiencies with IT.

This level of engagement by CEOs with technology has probably not been seen since the late 1990s. As Mark notes, technology has always been visible in the last decade of Gartner CEO surveys, but not so far to the foreground as it is this year.

As any successful business leader will tell you, a great attitude and mindset will only get you so far; there’s got to be substance to back it up. This is at the heart of the challenge for CEOs. Many leaders are lagging behind in their understanding of what digital business means.

This is where the CIO comes in. CIOs must take the lead in closing this huge gap in understanding by educating the CEO, their board, executives, senior and middle managers on the transformative value of digital.

A decade of believing that IT was a commodity function has left many business leaders with a very polarized—and increasing outdated—view of what technology can do to support organisations goals.

As I noted in an earlier post, CEOs see digital as a team sport and this survey indicates that the CIO still has the highest visibility in terms of opportunity to lead the charge.

When Gartner asked CEOs who they would allocate relative responsibility for leading digital innovation and change over the next two years, the CIO came out on top. However, many other roles are heavily involved, including chief digital officers (CDO), so CEOs clearly see digital as a collective operating committee endeavor.

One of the key conclusions that Mark and our colleagues in research make is that expecting the CIO to be the prime mover in digital is a fairly sudden and major change of expectation and emphasis. Digital is strongly associated with innovation.

Two years ago, the Gartner 2012 CEO survey found CIOs were low on the list of perceived innovation leaders because they were tasked as IT cost managers and service quality assurers. This is a huge shift in expectation and, as we all know only too well, change is hard—especially when it happens to you.

By Peter Sondergaard - Gartner