2016 CIO Agenda: A Nordic Region Perspective

Transcription

1 2016 CIO Agenda: A Nordic Region Perspective Published: 19 February 2016 G Analyst(s): Tomas Nielsen The Gartner 2016 CIO Survey shows that CIOs are building digital business execution platforms by developing their digital leadership, talent and delivery capabilities. This note provides an Nordic region perspective of the survey, focusing on the areas where Nordic CIOs differ from their peers. Key Findings The 2016 CIO survey has identified that leading CIOs are building a digital business execution platform specifically by focusing on building leadership, talent and delivery platforms. In terms of leadership, Nordic CIOs are on par with their global peers regarding future expectations of the impact of digital business while at the same time having a more operational focus with respect to desired digital outcomes than their global peers. In terms of talent, Nordic CIOs report being less constrained by skills and funding than their global peers whereas Nordic CIOs see themselves as being more restricted by culture and structure than their global peers In terms of delivery, Nordic CIOs are generally trailing their global peers in the current adoption of bimodal while at the same time being significantly more aggressive in their plans for adoption of bimodal in the coming three years. Recommendations Nordic CIOs: Look to the global 2016 CIO Agenda and identify how you will form the digital business execution platform by creating a leadership platform, a talent platform and a delivery platform. Ensure that you have the leadership platform by making sure that your digital ambitions and desired digital outcomes match the overall objectives of the organization or enterprise. Develop a talent platform to address the culture and organizational shortcomings you experience as the barriers to your success. Create the needed delivery platform, in particular by ensuring that the organization or enterprise develops a bimodal delivery capability.

2 Table of Contents Survey Objective... 2 Data Insights... 3 Building the Digital Platform Summary of Global 2016 CIO Survey... 3 A Nordic Perspective on the Digital Leadership Platform...6 Developing the Digital Talent Platform Creating the Digital Delivery Platform Methodology Gartner Recommended Reading List of Figures Figure 1. The Platform-Thinking Approach...3 Figure 2. Digital Business Execution Platform... 4 Figure 3. What Percentage of Your Revenue Is Digital?...6 Figure 4. What Percentage of Your Processes Are Digital?...7 Figure 5. Expected Digital Business Outcomes...8 Figure 6. CIO Leadership Beyond IT... 9 Figure 7. CIO/CEO Relationship...10 Figure 8. The Tasks That CIOs Love the Most...11 Figure 9. Tasks That CIOs Dislike the Most Figure 10. Barriers to CIO Success Nordic Region and Globally...13 Figure 11. Technology Priorities Figure 12. CIOs See the Ability to Execute as a Greater Threat Figure 13. Developing a Bimodal Delivery Capability Survey Objective Every year, Gartner surveys CIOs and IT executives drawn from the membership of its executive program and other sources to identify key priorities, opportunities and issues. Some 130 CIOs in the Nordic region (Denmark, Norway, Sweden, Finland and Iceland) responded to the 2016 Gartner CIO Survey out of the global total of 2,944. This research looks into the specifics of the Nordic region 2016 CIO survey results compared with the global results. The purpose of this research note is to highlight areas where the results for the Nordic CIOs differ from the global answers to highlight actions that are specific to the region. Page 2 of 18 Gartner, Inc. G

3 Data Insights Building the Digital Platform Summary of Global 2016 CIO Survey Digitalization has become a core competency, 1 and the global 2016 CIO survey shows that for enterprises and organizations to succeed in digital business, they must focus on building digital business platforms. Compared with an Industrial Age enterprise or organization, digital business platforms represent a fundamentally different way of business thinking. The main difference is that industrial business models were based on a fundamental assumption of value being created in a mainly linear and unidirectional push toward the customer whereas the platform model supports a more dynamic, complex and multidirectional creation of value. A platform provides the business with a foundation where resources can come together dynamically for short or long periods of time to create value. These resources are networks that may or may not be owned by your business, have customers as possible participants, and allow learning to happen across the network, as shown in Figure 1. Figure 1. The Platform-Thinking Approach Although most enterprises associate the platform-thinking approach to the technology layer, which focuses on highly modular, open information and technology architectures; postmodern ERP; and Gartner, Inc. G Page 3 of 18

4 cloud/everything as a service (XaaS); the 2016 CIO survey identified the need for CIOs to look beyond technology and build a digital business execution platform, as outlined in Figure 2. Figure 2. Digital Business Execution Platform The main findings of the 2016 CIO survey were that CIOs should: Build their leadership platform: CIOs frequently are given the opportunity to lead digital transformation (39% have chief digital officer [CDO] responsibilities incorporated into their role) or innovation (34% are innovation leaders). However, to succeed, the 2016 CIO survey finds that they must adapt to build a powerful network of digital leadership that treats leadership as a team sport. Bear in mind, however, that the 2015 Gartner CEO Survey revealed that CEOs expect CIOs to be the "first among equals" in digital leadership. CIOs must therefore adapt their style to exploit platform effects in leadership, building a network of digital leadership inside and outside the enterprise. Evolve the talent platform: Beyond leadership, CIOs identify talent as the biggest barrier to success and consequently, talent must be treated as a platform in terms of greater fluidity and semiporous boundaries. According to the 2016 survey, 66% of CIOs believe there is a talent crisis in the world (compared to 49% of CEOs who believe so, as per the 2015 Gartner CEO Survey), yet there is surprisingly little talent innovation. The key talent gaps are not very different from the gaps revealed when CIOs answered a similar question four years ago. To seize digital business opportunities, CIOs must seek digital talent beyond the boundaries of the IT organization, and indeed beyond the boundaries of the enterprise. Innovative talent management opportunities abound for example, "reversing into universities" (getting closer to universities by helping define and deliver university courses and projects, supporting Page 4 of 18 Gartner, Inc. G

5 internships, and so on), instituting reverse mentoring, implementing job rotations, holding hackdays, and building opt-in cultures. Create a bimodal business delivery platform: The 2016 CIO survey shows that the need to innovate is driving penetration and deepening of the bimodal construct. Bimodal captures the platform characteristic of continuously building and refactoring capabilities for the future. Forty percent of CIOs are on the bimodal journey, and an additional 26% have plans to implement bimodal in the next three years, meaning that two out of three CIOs expect to have bimodal capability in three years. Furthermore, with the 2016 CIO survey showing that building a mature bimodal platform results in better digital strategy performance, it becomes imperative for CIOs to incorporate bimodal into their delivery platform. This is particularly important, as those who are planning to move toward bimodal but have not taken the first steps yet were worst in terms of digital strategy performance. (For more details, see "Building the Digital Platform: The 2016 CIO Agenda"). However, while these are the global findings, the results of the 2016 CIO survey is different for different segments of CIOs, and consequently a series of research notes has been written that focus on the regional aspects of the survey responses. Consequently, this report will review the leadership, talent and delivery platform from a Nordic perspective and focus on the aspects of the survey where Nordic CIOs differ from their global peers in their answers to the 2016 CIO survey (see Figure 3 and Figure 4). Gartner, Inc. G Page 5 of 18

6 A Nordic Perspective on the Digital Leadership Platform Degree of Digitalization Figure 3. What Percentage of Your Revenue Is Digital? *Sample size is less than 30; results are directional. Page 6 of 18 Gartner, Inc. G

7 Figure 4. What Percentage of Your Processes Are Digital? *Sample size is less than 30; results are directional. Compared with their global peers, Nordic commercial CIOs are slightly more conservative in their assessment of the current state of digitalization than both their global peers and CEOs. However, in a five-year horizon, Nordic CIOs (like their global peers) expect significant growth. Overall, this translates into commercial-sector CIOs generally expecting to increase their digital revenue at least 150% (from 15% to 38% of total revenue). Nordic nonprofit and government CIOs are, however, both now and in the future, even more positive than their global peers, expecting to maintain a 5% to 7% lead over their global peers; and in five years, they expect only one out of six processes not to be impacted by digital opportunities. Call for Action: Both global and Nordic CIOs expect a significant growth in the impact of digital business. However, Nordic CIOs are generally more bullish on the scope of digital impact than their global peers. Consequently, Nordic CIOs who are not bullish on digital impacts should take note of their peers and critically review how digital business will affect them. Digital Business Outcomes While Nordic CIOs are optimistic about the overall impact of digital business, the outcomes they expect are, as shown below, mainly operational (see Figure 5). Gartner, Inc. G Page 7 of 18

8 Figure 5. Expected Digital Business Outcomes Overall across the world, CIOs report that the key driver behind digitization is gaining more revenue from better operations (66%). Their subsequent priorities are fairly operationally focused, with only one out of four (or fewer) CIOs globally looking to digitalization for transformational impact such as changing the basis of competition, creating new markets, crossing industry boundaries or expanding to new geographies. For Nordic CIOs, the operational focus is even more pronounced: They place an even higher importance on business through digital channels (59% vs. 48% globally) partnerships (46% vs. 37% globally) and cost reduction (44% vs. 39% globally). On the other hand, Nordic CIOs trail their global counterparts on a number of the transformational items such as creating new markets (17% vs. 26% globally), crossing industry boundaries (2% vs. 9% globally) and expanding to new geographies (2% vs. 11%). Call for Action: While operational benefits from digital business may be a valid starting point, Nordic CIOs should take notice of their global peers who increasingly are looking for more transformational outcomes. Nordic CIOs should therefore critically review their digital business objectives and seek to identify additional, transformational outcomes that can help them take their digital business leadership to the next level. One way of doing that could be by establishing more explorative practices that investigate sources of radical innovation beyond the regular business objectives. Page 8 of 18 Gartner, Inc. G

9 Developing and Shaping the Role of the CIO The role of the CIO is a complex one and this is also reflected in the survey responses. First, in terms of digital leadership, Nordic CIOs are ahead of their global peers, with 53% (compared with 39% globally) taking a digital leadership role (shown in Figure 6 as "CDO"). Figure 6. CIO Leadership Beyond IT CRO = chief risk officer However, in other related areas, such as innovation and enterprise change, Nordic CIOs trail their global peers as they do in their relationship with the CEO, as shown in Figure 7. Gartner, Inc. G Page 9 of 18

10 Figure 7. CIO/CEO Relationship Numbers may not total 100% due to rounding. (Note: Even though 60% of Nordic CIOs report a partnering relationship with the CEO [10% more than globally], this is offset by the fact that only 11% of Nordic CIOs report being a trusted ally [as opposed to 23% globally].) However, the diversity of the role as CIO today is also reflected in the wide-ranging list of the tasks that CIOs "love" or "dislike" as shown in Figure 8 and Figure 9. Page 10 of 18 Gartner, Inc. G

11 Figure 8. The Tasks That CIOs Love the Most Gartner, Inc. G Page 11 of 18

12 Figure 9. Tasks That CIOs Dislike the Most For Nordic CIOs (as well as for global CIOs), the love/hate relationship they have with elements of their jobs shows a wide range of preferences. For example, 21% of Nordic CIOs mention the role as "change agent" as an element of their job that they enjoy while 8% specifically single out "change management" as the area that they strongly dislike. Call for Action: Given the variety of the love/hate tasks and the increasing diversity of duties that we see in the CIO role in general Nordic CIOs should reflect on their tasks and consider if some of their responsibilities due to preferences, skills or career development considerations are better handled by a deputy. If so, they should seek to create such a position; for example, as a COO of IT or deputy CIO. Alternatively, if a COO of IT or deputy CIO is already in place, the CIO should evaluate the distribution of tasks and make the necessary changes. Developing the Digital Talent Platform Skills, Culture and Legacy Is the Main Barrier to (Nordic) CIO Success Both Nordic and global CIOs identify skills and resources as their primary barrier to success, as shown in Figure 10. Page 12 of 18 Gartner, Inc. G

13 Figure 10. Barriers to CIO Success Nordic Region and Globally In terms of barriers to success, Nordic CIOs seem generally to be less constrained by external factors (skills/resources, funding, IT-business alignment) and more constrained by what appears to be IT internal factors (culture/structure, technology, change capacity) than their global peers. It is also worth noting that in terms of budget, Nordic CIOs are generally on par with their global peers expecting slightly more than a 2% overall IT budget increase on average and roughly a 3:2:1 relationship between CIOs who report the IT budget as flat, increasing and decreasing. However, while 15% of CIOs globally identify funding/budget as their biggest barrier, this is only the case for 10% of Nordic CIOs. Call for Action: As a number of the biggest barriers for CIOs success reported by Nordic CIOs are likely to be IT internal factors, Nordic CIOs should review their organizations and identify specific actions they intend to take to remove the barriers to their success for example, by actively reshaping the culture, adjusting the organization or entering into partnerships with external entities (such as with universities to develop a broader skill base), as well as taking a proactive approach to shaping the culture in a way that will help them to succeed. Gartner, Inc. G Page 13 of 18

14 Creating the Digital Delivery Platform Delivering on the Technology Priorities When asked about their technology priorities, Nordic CIOs indicate slightly different priorities than their global peers (see Figure 11). Figure 11. Technology Priorities Shows Nordic top 10 along with global percentages. In terms of technology spending priorities, CIOs both globally and in the Nordic region have business intelligence (BI) and analytics as a top priority. However, when looking at priorities, there is one major differences in the priorities of global CIOs and Nordic CIOs, namely that globally only 21% of CIOs name ERP systems as a top-three spending priority whereas in the Nordic region this is the case for 31% of CIOs. Furthermore, on a global scale, the amount of CIOs that had ERP systems as a top priority have been on a steady decline over the past three years (from 34% in 2014 to 21% in 2016; see "Taming the Digital Dragon: The 2014 CIO Agenda," "Flipping to Digital Leadership: The 2015 CIO Agenda" and "Building the Digital Platform: The 2016 CIO Agenda"). This is a pattern that has been consistent over the past few years in the Nordic region. However, as the focus on ERP spending is decreasing on a global scale, it becomes increasingly important for Nordic CIOs to critically assess that the focus on ERP systems is forward-looking and enabling digital transformations that is, "postmodern ERP" (see "2015 Strategic Road Map for Postmodern ERP"). Page 14 of 18 Gartner, Inc. G

15 Call for Action: Nordic CIOs should critically review their technology priorities and ensure that their spending supports the overall business objectives. For CIOs who are committed to larger ERP initiatives, it is imperative that these initiatives are supporting and not hampering digital business initiatives. Ability to Deliver Is a Primary Concern Globally and in the Nordic Region As a part of the survey, Gartner asked CIOs to identify what they saw as a greater threat (see Figure 12). Figure 12. CIOs See the Ability to Execute as a Greater Threat CIOs, both globally and in the Nordic region, respond by a nearly 2:1 majority they see the ability to execute as a bigger threat compared with the ability to identify the necessary change. Consequently, developing a digital delivery platform is essential to succeed in digital business. Nordic CIOs Are Trailing Their Peers Currently But Ambitious in Creating a Bimodal Delivery Platform Nordic CIOs are trailing their global peers in terms of bimodal as shown in Figure 13. However, Nordic CIOs are expected to overtake their global peers in the next three years, with 44% stating that they expect to have bimodal in that time period. Gartner, Inc. G Page 15 of 18

16 Figure 13. Developing a Bimodal Delivery Capability Consequently, Nordic CIOs currently may be slightly trailing their global peers, but they are clearly bullish on the need and relevance of bimodal, and are planning to use bimodal as an essential part of their digital business delivery platform. Call for Action: CIOs with bimodal plans (44% of all Nordic CIOs) should ensure that they do in fact create a digital business delivery platform by delivering on the promise to develop a bimodal IT capability during the next three years, realizing that developing bimodal IT is not done overnight but normally requires a significant transformational effort and leadership commitment. CIOs with no bimodal plans are a minority in the Nordic region (13% with a further 15% unsure). Consequently, CIOs with no bimodal plans should critically review the needs for bimodal delivery and validate that their decision to not develop a bimodal capability is still valid and that they are confident in their short- and long-term ability to deliver on digital business initiatives. Methodology The CIO survey was conducted during 2015, based on a number of hypothesis developed by the Gartner CIO research community. The results of the 2016 Gartner CIO Survey have formed the basis for the 2016 CIO Agenda (see Gartner Recommended Reading section). This research note uses the results of the 2016 survey and explores the areas where the responses from the Nordic region lead to additional observations either contradicting or supporting the global findings. The purpose of this research note therefore is not to comment on the entire survey, but rather to serve as a supplement that highlights special areas of interest for Nordic CIOs and other Page 16 of 18 Gartner, Inc. G

17 stakeholders with an interest in the Nordic region. The findings from the total dataset was published in its entirety as The findings from the total dataset was published in its entirety as "Building the Digital Platform: The 2016 CIO Agenda" Gartner Recommended Reading Some documents may not be available as part of your current Gartner subscription. "Building the Digital Platform: The 2016 CIO Agenda" "Flipping to Digital Leadership: The 2015 CIO Agenda" "Bimodal IT: How to Be Digitally Agile Without Making a Mess" "Toolkit for IT Executives: Job Description for the COO of IT" "What to Do If Your Digital Business Strategy Violates Culture, Ethics or the Law" "Hit the Bimodal IT Highway Now Considerations for Structuring and Staffing" "Kick-Start the Conversation on Digital Ethics" "Digital Workplace Key Initiative Overview" "A Bimodal Enterprise Needs Three Subcultures" "Get Ready for Digital Business With the Digital Business Development Path" "Digital Business Transformation: Turning the Digital Dream Into Reality" "2015 Strategic Road Map for Postmodern ERP" Evidence This research is based on the 2016 Gartner CIO Survey conducted between 4 May 2015 and 24 July 2015, when 130 CIOs in the Nordic region (Denmark, Norway, Sweden, Finland and Iceland) responded to the 2016 Gartner CIO Survey, out of the global total of 2,944. The respondents were members of Gartner Executive Programs and other IT leaders. 1 M. Raskino and G. Waller. "Digital to the Core: Remastering Leadership for Your Industry, Your Enterprise, and Yourself." Bibliomotion More on This Topic This is part of an in-depth collection of research. See the collection: 2016 CIO Agenda: Global Perspectives on Building the Digital Platform Gartner, Inc. G Page 17 of 18

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