Earlier this month, a team led by my colleagues Dave Aron and Graham Waller published the results of Gartner’s annual CIO Agenda survey.
Overall, the survey revealed that CIOs do not feel prepared for the next era of enterprise IT, something we at Gartner call digitalization – The Digital Industrial Economy. CIOs responded to say that they often feel overwhelmed by the prospect of building digital leadership while, at the same time, renovating the core of IT infrastructure and capability for the digital future. The survey found that 51 percent of CIOs are concerned that this change is coming faster than they can cope and 42 percent don’t feel that they have the talent needed to face this future.
The survey, which was conducted in the fourth quarter of 2013 and represents the views of more than 2,300 CIOs in 77 countries, is summarized in a report we published for clients that highlights the need for CIOs to respond to the dual goals of effectiveness and digitalization.
The themes that emerged from the survey reflect many of the trends we we discussed during our Symposia around the world in October and November 2013 and will explore at our upcoming Gartner Symposium/ITxpo in Dubai.
Dave and Graham point out that during the first era of enterprise IT, the focus was on how IT could help do new ‘stuff’ — automating operations to realize huge improvements in speed and scale, while also providing leaders within the business with information they never had before. The last decade represented the second era of enterprise IT, an era of industrialization of enterprise IT, making it more reliable, predictable, open and transparent. But, while this second era has delivered real benefits for organizations, rigorous budget control and little appetite for risk has left little to no room for innovation.
Technological and societal trends, such as the Nexus of Forces and the Internet of Things, are changing everything in the third era of enterprise IT. Digitalization is not only improving what businesses do with technology to make themselves faster, cheaper and more scalable, but fundamentally changing businesses with information and technology, changing the basis of competition and in some cases, creating new industries.
The report points out that CIOs are facing all the challenges they have for many years, plus a flood of digital opportunities and threats. Digitalization raises questions about strategy, leadership, structure, talent, financing and almost everything else as all industries in all geographies are undergoing digital disruption.
I was also interested to learn from the survey that CIOs reported that a quarter of IT spending will happen outside the IT budget in 2014. As the authors note, this is probably a conservative estimate because this only accounts for the spending CIOs know about; the reality may be significantly higher.
Finally, Dave and Graham stated that there is an inherent tension between doing IT right and doing IT fast, doing IT safely and doing IT innovatively. Whereas the second era of enterprise IT has been all about planning and doing IT right, CIOs now need to deal with speed, innovation and uncertainty. This requires a concept we call bimodal capability, which means operating two modes of enterprise IT at the same time; conventional, or “safe and steady” IT, and a faster, more agile nonlinear mode.
In a future blog post, I’m going to explore what CEOs should know introducing a bimodal capability into their organization, and how to engage their CIOs in the shift to this strategic capability. Is this a journey you are already on? Have you started to address this fundamental challenge? I’d like to learn more about your experience for my next post.
If you are client, a detailed analysis is available in the report “Taming the Digital Dragon: The 2014 CIO Agenda.”