Gartner's CIO Agenda and CEO Perspective for 2022

At its Symposium conference last week, Gartner showcased its annual studies of CIO priorities and CEO perspectives. Business model changes as function of a "digital transformation"—as well as a search for new growth—were emphasized, and much of the discussion focused on how CIOs and other top IT leaders must address these bug when presenting to elevation management and the board of directors.

CIO Calendar

Digital initiatives and growth are the two pinnacle business priorities for CIOs in 2022, Gartner distinguished VP Andy Rowsell-Jones said. Those findings are based on Gartner's almanac survey, which included three,102 CIOs from 89 countries, who work in a wide range of industries. Both of these priorities were named by 22 percent of participants. (Rowsell-Jones additionally noted that enterprise Information technology budgets are growing 2.9 percentage this year, also according to the survey.)

Over the by twenty years, we've moved from an era of IT Adroitness (a focus on creating custom solutions) to an era of IT Industrialization (using standard packages and platforms), to the current era, one of Digitalization, according to Rowsell-Jones. Since 2022, "we've gone [beyond] first steps to digital at scale."

At present more always in this new era, beingness a CIO is virtually prioritization and being capable of thinking non only about digitalization, just about which specific initiatives modify business models, and bulldoze consumer engagement, product management, and technology.

Overall, digital initiatives have passed the tipping point, and Rowsell-Jones said that 33 per centum of CIOs surveyed reported their digital efforts were now running for profit (either scaling or refining), compared to just 17 percent last yr. "The world has inverse," he added.

Rowsell-Jones noted that 49 percent of CIOs surveyed reported changes in their organization's business model, which he defined as "the style in which an organization creates, delivers, and captures value." According to 40 percent of CIOs, evolving consumer demands are driving the business model change. As an case, Rowsell-Jones talked almost Southern New Hampshire University, which is moving to an online model focusing largely on credential-based skills.

It's crucial to measure return on investment for digital activities, he said, noting that 89 percent of the pinnacle performers practise. If y'all aren't measuring it, "you lot're non taking it seriously." The report as well found that top performers tend to practise more than engagement, and are generally 18 months to 2 years ahead of their competitors.

Rowsell-Jones talked most specific things the height performers tend to do more than of, compared to the average performers (listed in the chart above), which include measuring key operation indicators (KPIs) for both pinnacle-line growth and cost savings. "This is not a bunch of experiments anymore," he admonished. "You must measure it."

CIOs must keep in listen three things that nearly boards of directors care virtually: digital transformation, growth, and cybersecurity. On security, he said that 95 percent of CIOs expect cybersecurity threats to become worse. In this expanse, its behavioral change which must occur, but he also noted that with regards to security, "more is more," and said that CIOs of organizations with more than cyber-gamble mitigation efforts voiced more than confidence in their cybersecurity team.

Of top performers, 75 percentage have implemented product-centric delivery, creating longer-lived, "ideate-build-run teams" that work on a persistent business organisation effect, rather than focusing on a single betoken-in-time initiative. This has clear benefits, and drives a closer appointment between Information technology and the concern, faster delivery of new features, and results in a more consumer-centric orientation. In general, the procurement process hates this transition, he cautioned and said this shift requires more of a focus on "DevOps" and a real culture alter.

Finally, Rowsell-Jones moved to engineering science and said that the problem here is that much of IT's time is spent dealing with legacy technology. Instead, the goal needs to be leveraging disruptive technologies, rebalancing your projection portfolio, and focusing on creating new business opportunities.

On technology, the study institute a 270 percent increase in AI adoption since 2022, though only 37 percentage say they have deployed or program to deploy in the brusque-term. AI led the list of technologies CIOs named as "game-changers," with 41 percent naming AI, 23 pct data analytics, and 12 percentage the cloud. The top use cases for AI include fraud detection, procedure optimization, chatbots, and market partition. AI "is non the only game in town," nevertheless, and Rowsell-Jones pointed to augmented reality as a potential source of enormous value, currently existence used in applications like drilling, for example. The study likewise showed big growth in both 3D printers and conversational interfaces.

Rowsell-Jones emphasized the need for CIOs to rebalance their technology budgets and said also often 70 to 75 percentage of the annual IT budget goes to legacy systems, infrastructure, and operations. I noted a nautical chart featuring technologies that are seeing increased or decreased amounts of funding, and unsurprisingly the top increases went to business intelligence or data analytics solutions, cybersecurity, and deject services.

Rowsell-Jones concluded with recommendations as to how to nowadays these priorities to a board of directors. "We mean business," he said, when it comes to things such as concern model changes, consumer appointment, moving from projects to products, adopting new applied science, and refocusing on security. He urged the audience to "remember where we've come from," and reminded attendees that digital is now at scale, and no longer just an experiment. "We've come a long manner," he said, and should focus on both the successes we've had and the legacy we are creating.

CEO Perspective

As for the CEO Perspective, Gartner distinguished VP Mark Raskino noted that in the first decade of this century business leaders were told that "Information technology doesn't matter"; as a result, businesses didn't invest enough. At present nosotros know that technology does thing and that we actually need to invest in information technology, just strong employment numbers in the economy overall have created a "capacity crisis," and fabricated it difficult to observe the employees that organizations need.

CIOs need to aid CEOs every bit they consider structural growth and the use of new digital technologies, Raskino said. This has been practical in sales and marketing, resulting in incremental changes that have delivered results over the past 3-5 years, but nosotros need to see deeper changes, including a focus on "deep productivity improvement."

In every manufacture, every production can be reinvented using digital technology, Raskino said, but if you add an app to a production, that'due south merely the start: y'all demand to add new functions and exercise different things with the data y'all collect, and so combine data beyond all of your applications to build a different view of your customer. Eventually, information technology becomes a question of what kind of industry y'all are in, and what your core competencies are, he said.

Gartner asked CEOs what their top v priorities are for the adjacent two years (see the chart at the height), and while the intensity of the focus on growth is as high as ever, the 40 per centum of respondents who used that word sunk a bit, with more (33 percent) now mentioning "corporate items," such as envisioning a new business concern model, or doing mergers & acquisitions. This indicates that we are now at the point in the business concern cycle where nosotros can't get more out of the machine. It'due south time to upgrade, he said.

Raskino noted a massive increase in the number of people talking nigh the workforce (28 percent), and particularly mentions of preparation. When you have a labor shortage, you have to spend more on developing your ain people, and this tin be a long process, every bit opposed to hiring or outsourcing.

Efficiency and productivity were actually at the bottom of the list, with just 9 percent each. Fifty-fifty though the whole history of It and all of the methodologies nosotros accept learned has been predicated on the use of computers and telecommunications to manage cost and efficiency in the business, today digital is more than well-nigh sales and revenues. This is one of the most interesting gaps betwixt traditional CIO thinking and the current CEO perspective, he said, and nosotros have a generation of business leaders that don't know how to exercise deep concern re-engineering using modern tools, such as AI and social. Productivity and efficiency weren't even on the chart concluding twelvemonth.

CEOs understand that digital business organisation matters, and Raskino quoted several CEOs who have talked about why digital is imperative, such equally the CEO of Marks & Spencer, who said: "we are not digital in an historic period where nearly retail starts with a mobile phone."

Raskino noted that over one-half of the companies surveyed said digital business organisation is meant to be a transformation rather than an optimization. We have diluted the word "transformation," which should mean a change to your business model and/or your products and services, he said.

The survey indicated that CEOs await digital revenue to be 39 percent in 2022, upward from 29 per centum in 2022, but Raskino said it's hard to know what exactly digital acquirement is, as it depends on a definition that is unique to your industry and your identify in it. He showed a nautical chart demonstrating how dissimilar CEOs interpret the concept of digital acquirement, ranging from customers paying for digital products and services transacted via electronic sales channels, to simply being caused via digital marketing.

The survey institute that 63 pct of CEOs are likely to brand a change to their business models between 2022 and 2022. This is a deep structural change, which involves discussion with non only the management squad, but as well the board and investors. While CIOs aren't often in charge of such changes, they need to aid the CEO in making this change. Some examples were more than incremental, such every bit BMW doing a subscription model for its automobiles, while others are monumental, such as Ford saying information technology volition earn about one-half of its profits from services rather than cars. That's what we mean by structural modify, Raskino said.

CEOs believe that new technologies can take a material impact, but the outcome is identifying how. There is no method or cookbook for doing this, and it will eventually be invented by experimentation, trial and error, and by a new generation of business leaders: "the people in this room."

At that place is lots of open landscape to be creative and to be a pioneer, Raskino said. CEOs understand that CIOs can't practice information technology alone, and some know that they need to reshape the executive team. Each executive will take to exercise something unlike, so CIOs demand to help others, and act like a "team captain" to help the other players.

In detail, Raskino focused on collaborating with the Master Homo Resources Officeholder, who he characterized as typically having a small-scale human relationship with the CIO. That volition alter because it must, because talent process is and so important, as is the organizational structure and culture.

As I await over the two presentations, the perspectives of CIOs and CEOs do seem to be fairly aligned, as they should be. Everyone is talking most growth—usually through new business models or improved client date—simply other priorities, such as continuing the migration to the cloud, remain important, and security is the issue that just won't go away.