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Digital opportunities and threats

CIO budgets in Australia and New Zealand are expected to grow an average of 2.6 percent this year. However, 52.3 percent of CIOs report that their budgets are flat, and 27 percent expect them to decline, according to the 2013 Gartner Executive Programmes global survey of 1959 CIOs, which included 112 CIOs from Australia and New Zealand. This marks another round of IT strategies based on doing more with less -- really just doing the same with less.Technology needs a new story. The current story revolves around current operations, with a focus on cost, quality and services. It is a story defined by IT's role as 'tender' of the garden of legacy applications, outsourced operations and limited value creation.The current story is not working. On average, CIOs globally report that their enterprises realise only 43 percent of technology's potential. Clearly this number needs to increase if organisations are to create value via technology.From tending the garden to hunting and harvestingThe CIO's role has traditionally been to nurture IT services and their infrastructure in service of business processes, and then to execute discrete projects aimed at replacing legacy systems or fulfilling new needs identified by the business. The business value created from this paradigm is further automation, integration and standardisation. This 'tending the back office' approach leaves gaps in two areas: first, proactively identifying business opportunities based on new digital capabilities and realities (hunting), and second, extending value from existing information and technology investments (harvesting).Taking on a greater hunting role benefits the business in finding and acting on disruptive digital opportunities and threats early and often. CIOs can guide the organisation in reimagining business models based on the combined impact of mobile, big data/analytics, cloud and social technologies (what Gartner calls the 'nexus of forces'). They can create new 'digital edge' capabilities using different combinations of physical and digital resources, or identify threats from non-traditional areas based on digital capabilities (what American companies Borders and Kodak failed to do).Exploiting these trends will allow organisations to enrich the customer experience, serve customers better, target new customer groups and enter or create completely new businesses based on digital capabilities. The value of harvesting comes from continually tuning existing digital assets, not just for improved IT efficiency and effectiveness, but also to serve the evolving needs of the business and its customers.Stepping outside the comfort zoneAs business needs and opportunities evolve, more CIOs find themselves leading in areas outside of traditional IT. In addition to their tending role, they are assuming responsibility for hunting for digital opportunities and harvesting value. According to the Gartner Executive Programmes 2013 CIO Survey, the vast majority of CIOs in Australia and New Zealand have significant leadership responsibilities outside of IT, with only 22 percent having no other responsibilities (see table on left).CIO tenure with the enterprise is a significant factor in gaining responsibilities outside of IT. The longer the tenure, including time not as a CIO, the more context and connections the CIO has for playing a broader role in the enterprise. ANZ CIOs have spent on average 4.2 years as CIO in their current organisation, close to the global average of 4.6 years.One third of ANZ CIOs now act as their enterprise's chief digital officer, leading digital commerce and channels. Though this nascent role varies in scope and style, it normally includes championing the digital vision for the business.CIOs face a future torn between current operations and digital opportunities. Hunting for digital innovation and harvesting that value across the enterprise describes a deeper role for technology in the enterprise and a step outside the comfort zone for many.To make room for this, set aside old tools and adopt new rules: there is simply not enough IT capacity to start new things without stopping others. Linda Price is group vice-president, executive programmes, Gartner. Email comments to Linda.price@gartner.com

More about: ANZ, Borders, Gartner, Kodak, Technology
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