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Gartner Guides On Delivering Digital Dividends

November 11, 2022

Gartner analyst Daniel Sanchez-Reina presented the key priorities for EMEA CIOs at Gartner IT Symposium/Xpo in Barcelona.

In EMEA, 94% of Organizations Struggle with Developing a Vision for Digital Change

CIOs and IT leaders must take action to accelerate time to value and drive top- and bottom-line financial impacts from digital investments, according to Gartner, Inc.’s annual global survey of CIOs and technology executives.

“The pressure on CIOs to deliver digital dividends is higher than ever,” said Daniel Sanchez-Reina, VP Analyst at Gartner. “CEOs and boards anticipated that investments in digital assets, channels and digital business capabilities would accelerate growth beyond what was previously possible. Now, business leadership expects to see these digital-driven improvements reflected in enterprise financials.”

In 2023, EMEA CIOs expect their IT budgets to increase 4.4% on average, which is lower than the projected 6.5% global inflation rate. This means that CIOs will have less funding available than last year. A triple squeeze of economic pressure, scarce and expensive talent and ongoing supply challenges is heightening the desire and urgency to realize time to value.

Gartner analysts presented the survey findings during Gartner IT Symposium/Xpo™, taking place here through Thursday. The 2023 Gartner CIO and Technology Executive Survey gathered data from 2,203 CIO respondents in 81 countries and all major industries, representing approximately $15 trillion in revenue/public-sector budgets and $322 billion in IT spending. In EMEA, 780 CIOs participated in the survey from 51 countries and all major industries, representing nearly $5.9 trillion in revenue and $78 billion in IT spending.

The survey analysis revealed four ways in which CIOs can deliver digital dividends and demonstrate the financial impact of technology investments:

Prioritize the Right Digital Initiatives

In EMEA, survey respondents ranked their executives’ objectives for digital technology investment over the last two years. The top two objectives were to improve operational excellence (53%) and improve customer or citizen experience (44%). In comparison, only 29% cited growing revenue as a primary objective and 22% cited improving cost efficiency.

“Overall, CIOs must prioritize digital initiatives with market-facing, growth impact,” said Sanchez-Reina. “For some CIOs, this means stepping out of their comfort zone of internal back-office automation to instead focus on customer or constituent-facing initiatives.”

In addition, the survey revealed that EMEA CIOs’ business priorities for the remainder of 2022 and next year are growth and digital transformation. CIOs’ top areas of increased spending in 2023 include cyber and information security (70%), business intelligence/data analytics (53%) and cloud platforms (48%). However, just 34% are increasing investment in artificial intelligence (AI) and 24% in hyperautomation.

“The Gartner findings reiterate the importance of operational excellence and the key focus on customer experience, alongside the need to realize returns on the significant technology investments made through digital transformation and operational optimization,” commented Holly Roland, CMO, ParkourSC. “From our perspective as a leader in digital supply chain operations, embedding deep intelligence in real time across a fully connected ecosystem with a clear and unsiloed line of sight into all supply chain constituents, are key to realizing business goals. Shared intelligence and open collaboration drives informed decision making and provides the real time agility enterprises need to deliver operational excellence and an optimal customer experience.”

Create a Metrics Hierarchy

The survey found that 94% of EMEA organizations struggle with developing a vision for digital change, often due to competing expectations from different stakeholders. “We have the chief marketing officer, chief sales officer, chief financial officer and other C-level executives competing with each other in delivering their digital transformation, and this is consuming the CIO’s resources as there is no unified digital strategy,” said Sanchez-Reina.

The main drawback for this lack of digital vision is the inexistence of a common and quantified business objective across the entire organization. “For example, each business unit carries out their own initiatives to improve customer experience, however, they are not aligned to a common business result, such as increasing sales by a certain target,” said Sanchez-Reina.

The solution is for every single business unit to have their own metric that contributes to the same business result.

Contribute IT Talent to a Business-Led Fusion Team

While strategic engagement of business unit leaders is necessary to accelerate digital initiatives, the survey exposed that the heavy burden of digital delivery is still not equally executed among IT and business departments. For example, only 32% of EMEA CIOs said that business functions participate in agile digital execution teams.

“Over-dependence on IT staff for digital delivery reflects a traditional mindset, which can impede agility,” said Sanchez-Reina. “EMEA CIOs must embrace democratized digital delivery by design to accelerate time to value. Equipping and empowering those outside of IT – especially business technologists – to build digitalized capabilities, assets and channels can help achieve business goals faster."

Loaning IT staff to fusion teams that combine business experts, business technologists and IT staff will catalyze a team that is focused on achieving digital business outcomes, while also opening the way for reciprocity, such as integrating subject-matter experts from the business into an IT-led fusion team.

According to Akshay Sharma, CTO, Kovair Software, and former Gartner Analyst, “We agree with the Gartner findings that CIOs must embrace democratized digital delivery by design to accelerate time to value. To achieve this, Value Stream Management and Delivery Platforms from vendors like Kovair are needed to provide the necessary metrics that are meaningful to the business, Digital Transformation Governance, Policy Compliance dashboards, and Cybersecurity Workflow Automation. Integration Platform as a Service (iPaaS) solutions are also needed to integrate services, control and operationalize the business showing in real-time systemic risk in digital business systems, cybersecurity risk oversight, regulatory compliance, and operational effectiveness with KPI’s that are meaningful to the business, which Kovair enables.”

Reduce the Talent Gap with Unconventional Resources

Many CIOs continue to struggle to hire and retain IT talent to accelerate digital initiatives. However, the survey identified numerous sources of technology talent that are untapped. For example, only 12% of EMEA companies use students (through internships and relationships with schools) to help develop technological capabilities and only 24% use gig workers.

“Talent shortages are among the greatest hindrances to digital,” said Sanchez-Reina. “CIOs are often limited by policies related to preferred providers or employment contracts. They must stress to business and HR leadership that engaging unconventional talent sources can help accelerate the realization of digital dividends.”

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