Digital Fear and Loathing in the CIO Ranks

By Michael Vizard

We’re entering a period of great digital uncertainty that is trying the souls of senior IT and business leaders alike. That’s one of the main takeaways from a new global survey of 2,339 CIOs conducted by Gartner, which notes that more than half of CIOs say the pace at which digital technology is affecting their business is too fast for them to cope with. Just as troubling, 42 percent say their organization lacks the skills to manage a truly digital business.

Dave Aron, a vice president and fellow with Gartner, says much of the apprehension that businesses are experiencing today is a direct result of a lack of focus on innovation. For many CIOs, too much of the past decade has been spent on industrializing IT to drive down its cost. That industrialization process, however, has stifled innovation, says Aron.

“The focus on industrialization has led to a lot of stagnation,” Aron says. “A lot of CIOs are now discovering that polishing the ERP system is no longer enough.”

To address the innovation issue, leading-edge IT organizations are starting to bifurcate their operations, Aron says. Traditional IT executives are continuing to focus on making systems of record more efficient, but a new class of entrepreneurially minded executives is being put in charge of what is collectively being referred to as “systems of engagement.”

“One symptom of that is the emergence of the title of chief digital officer within a lot of organizations,” says Aron.

It’s often not clear whether the chief digital officer is an IT or marketing person, but what is clear is that they usually trying to drive some form of business innovation.

While many senior IT leaders are obviously concerned about making the transition to becoming a digital business, others view it as a welcome opportunity.

“I used to worry that my job was going to be commoditized,” says National Football League CIO Michelle McKenna-Doyle. “Now I look forward to working with line of business executives on various projects.”

McKenna-Doyle says she welcomes shadow IT spending because ultimately that means she’s not the only one advocating innovative, often multi-million dollar projects within the organization.

The Gartner study finds that cloud computing is especially critical in terms of giving IT the flexibility needed to develop innovative applications without having to commit to massive amounts of capital spending. The Gartner study also reports that a quarter of the CIOs surveyed have already made significant investments in public clouds, and the majority of CIOs expect more than half of their company’s business to be running in a public cloud by 2020.

Chris Curran, a principal and chief technologist in the U.S. advisory practice for PwC, says one of the most important things that IT organizations need to understand is that a raft of social, mobile, analytics and cloud technologies are all maturing at the same time, and it’s difficult to predict how these technologies in combination will ultimately affect businesses.

What’s most important, says Curran, is to be open to all the digital possibilities. “You have to be constantly testing,” he says. “Many technologies are in a constant state of beta.”

Instead of waiting for emerging technologies to reach a certain level of maturity before adopting them, IT organizations need to start working with them early on in order to enable the business to get the most value from them, Curran says.

Unfortunately, too many IT organizations have taken a reactive partnering approach and, in the name of industrialization, reduced the number of vendors they work with. However, Aron notes the Gartner study makes it clear that when it comes to making the transition to being a digital business, the majority of the respondents say they have been let down by their vendor partners. Of the CIOs surveyed, 70 percent say they plan to change their technology and sourcing relationships during the next two to three years, and many are seeking to partner with small companies and startups.

“I think in the coming year IT organizations are going to be lot more interested in working with smaller companies,” says Aron. “Those types of vendors are now perceived to be more innovative than the big guys.”

About the Author

Michael Vizard is a contributing writer for CIO Insight.

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