4 key moves CIOs can use to accelerate digital business according to Gartner

Gartner outlines how CIOs can move their companies ahead next year and gain long-term agility.

The race to digital is on, and the companies that win will be those that can continue the momentum built up this year during the COVID-19 pandemic, according to Gartner’s CIO Agenda survey for 2021, which was announced during the Gartner IT Symposium/Xpo Americas conference, which runs through Thursday. 

“The most important job you have as CIO, as an IT leader, is figuring out how to accelerate your digitization,” said Andy Rowsell-Jones, distinguished research vice president at Gartner. 

“Coming into 2021, I think it’s more of a straight road now. The black top is a bit more solid under our feet. There’s still a few nasty twists and turns to be had, but I don’t think from what we’re seeing 2021 is going to be as interesting as 2020 was. It’s going to be tough. And the economic fallout is going to continue to rain down on us. But I think it’s becoming a little more predictable. And I think we are in a better position coming into 2021 than in 2020 because at least we know what to do, which is really the acceleration of digital and digital business,” he said.

Gartner has identified four drivers that will help CIOs seize the moment and accelerate digital business and achieve long-term agility.

SEE: COVID-19 workplace policy (TechRepublic Premium)

Win differently

In the survey, 76% of respondents said that demand for new digital products and services increased in 2020, and 83% said it will increase in 2021.

“Win differently is really deciding that your consumer group, and your products and services really have gone digital for real, at scale. And therefore, how do you make sure that you go with them? Now this isn’t going to save everybody. If you’re in the cruise liner business, or if you’re in hotel businesses in a country that’s still locked down, or if you’re in the airline business in certain parts of the world, you’re cooked. Digital isn’t going to save you. What’s going to save you is conserving cash, conserving resources,” Rowsell-Jones said.

In the survey, there were two areas of customer digitalization where top performers are significantly more aggressive than typical performers: The use of digital channels to reach customers and achieve citizen engagement, and the rate of introduction of new digital products and services. Nine out of ten of the top performers who were surveyed are pursuing digital channels, and almost three-quarters of those are introducing digital products faster.

Businesses that are on an even keel or picking up need to go digital if they haven’t already. “There’s money available for this. Coming into this part of the cycle, the CIO’s themselves have an improved standing with the senior leadership team. Because of this work from home thing, because we had to move thousands of employees and get them from working from home at very short notice, CIO’s themselves and the IT leaders have improved their standing, their reputations with the senior leadership of their enterprises. So you’ve got this confluence of digitizing as best we can for years, and now you’re really opening the taps and letting this go and making the money available. In addition, you now trust us more,” Rowsell-Jones said, calling it a “once-in-a-generation opportunity” for CIOs. 

“COVID-19 is so horrible and so transformational that if we can’t now push the digital agenda, frankly, you don’t deserve to keep your job because the doors are open,” Rowsell-Jones added.

SEE: IT spending forecast for 2021: Gartner predicts some growth, but market still below pre-pandemic levels (TechRepublic)

Unleash force multipliers

Survey respondents characterized changes related to enterprise IT leadership trends due to the pandemic. Approximately 70% of CIOs increased their knowledge of specific business processes to advise the business, and the same percentage did more to measure and articulate the value of IT.

“We talked about unleashing force multipliers. A force multiplier is something that you’re kind of good at already, or something that’s a latent ability,” Rowsell-Jones said. 

Companies that are risk averse have had to set aside that risk aversion and embrace change. COVID-19 swept away risk aversion in some organizations. 

“We are all now basically startup businesses trying to figure out how the heck we operate in this new world. So again, this is all part of taking advantage of this once in a lifetime change. Digital has been going for a while, but it’s now going faster. If senior leadership have kind of been paying lip service to it, they now get it. There is money available. We have seen that even those cultural barriers that were persistent resistors of digitalization are beginning to crumble,” Rowsell-Jones said.

Banish drags

“Banishing drags is the other thing which is really about the impediments to transformation, the impediments to the change,” Rowsell-Jones said. “One of the interesting things that came out from our survey is supply chain issues. If you’ve outsourced your business processes to a location at lockdown, suddenly your processes break. If you already rely on external providers or certain other services who are now suddenly unable to provide those services, you stop working. Even something as simple as, ‘How do I buy 10,000 or 1,000 laptops or 100 laptops?’ Well, you can’t because there aren’t any.”

In the survey, most respondents reported they were behind in sales volumes during the pandemic, but only 29% of top performers reported a decrease versus 45% of typicals and 62% of trailings.

“A lot of us have optimized our supply chains for efficiency. Now we’re beginning to have to look at those supply chains for resilience. So we’re now asking ourselves, is this the most resilient or robust form of supply?” Rowell-Jones said.

Labor was also revealed as a drag. Creating productive workspaces for employees, either through workplace automation or  workplace sharing became essential during the pandemic, he said.

Redirect resources

The fourth driver is redirecting resources. Survey respondents projected a 2% IT budget increase for 2021, on average—slightly down from the 2020 survey (2.8%).

“The budget numbers for this year are about 2% growth, which is not brilliant. It’s a bit lower in North America, but globally it’s about 2%. This has been a lot better than we expected, but it’s nowhere near enough to fund an acceleration of digital business. What it does mean is one of the responsibilities for anybody who’s involved in IT leadership is to take a really hard look at the investments for in flight,” Rowsell-Jones said. “So if you’ve got a business case that’s older than January 2020, you’ve got some in-flight projects from last year, really look at them hard and say, ‘Do I really need to spend the money, time, effort, energy, and resources on these things which were a brilliant idea back in January 2020, but it’s now October 2020.’ So maybe the world has changed sufficiently that we will have to push all these things to the right and spend our time doing things that are of greater immediate and medium term value.”

The essentials to accelerate digital business

“When you’re thinking about what it takes to accelerate digital business, you need money, resources, time, energy and focus. COVID-19 has accelerated consumer shift. The digital has educated senior leaders, boards of directors, and chief executives of digital’s importance. They’ve been playing lip service for years, but I think they really mean it this time. It has even changed some of those cultural barriers. It was the force, not multipliers, but force attenuators. We’ve run into this squidgy sand bag of culture. Well, the squidgy sand bag of culture now looks like it’s firmed up. It’s been in the gym, and it’s trimmed itself down, and it’s willing to take some change,” Rowsell-Jones said.

The 2021 Gartner CIO Agenda survey gathered data from 1,877 CIO respondents in 74 countries and all major industries, representing approximately $4.7 trillion in revenue/public-sector budgets and $85 billion in IT spending.

The survey separated CIO respondents’ enterprises into three groups: Top, typical and trailing. Top performers rated themselves highly for digital maturity, business performance relative to competitors, and how advanced their post-pandemic response is. The trailing group rated themselves poorly on digital maturity and relative business performance, and the typical group represented the rest of— and majority of—respondents.

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