Gartner's annual CIO Agenda survey reveals that digital ecosystem participation is proportional to performance and here is a 3-step formula for CIOs to make their organization lead by leveraging a digital ecosystem
As digitization matures, enterprises are increasingly finding themselves being part of a digital ecosystem. Despite only a modest increase in the enterprise IT budget (2.2% globally), spend on digitalization is on the rise, says Gartner's 2017 CIO Agenda Survey. CIOs are shifting their investment pattern in response to digital business.
Digital ecosystem membership increases with digital maturity, indicates the survey data. One of the differentiating factors of a high-performance digital business is the creation of and/or participation in a digital ecosystem. Deliberate, wide-ranging use of an ecosystem to co-create solutions and take advantage of distributed capabilities separates top performers from the rest of the pack.
In order to fully participate in a digital ecosystem, CIOs will need to focus on three core domains:
- Technology core
- Organizational capabilities
- Enterprise leadership
Extend the technology core to be digital ecosystem-ready
A combination of core and evolving digital technologies underpin the transition to digital ecosystem participation. Planned top technology investments by survey respondents include analytics, cloud services, digital market management and security. Business Intelligence (BI) and analytics continue to top investment priorities across all organization types with an average of 38% of respondents citing them in their top three priorities.
For all but the top performers, enterprise resource planning (ERP) remains a significant investment with 22% of average performers and 30% of trailing performers placing it in their top three technology priorities. Just 85 of top performers ranked ERP in their top three, having likely invested enough to modernize ERP and shifted that investment to higher return activities. In contrast, trailing performers are investing heavily in non-differentiating activities. This seems to indicate that they will need to work hard to modernize their technology core before they can even consider digital business-style investment.
Create a digital ecosystem-ready organization
CIOs across the board identify the IT skills gap as the primary barrier to achieving the objectives in their role. An average of 34% of survey respondents reported that information-related skills represent the biggest gap, especially those skills which are needed for the newest, most advanced analytics environments. The skills that have previously been applied to pre-digital diagnostic analytics are not sufficient for the new real-time data scenarios presented by the Internet of Things (IoT), personal analytics, operational technology and information ecosystems. As a result, newer skills are in short supply and expensive.
Adoption of bimodal IT is key to the creation of a digital ecosystem-ready organization and this is an area in which enterprises are making progress. Survey findings indicate that, on average, 43% of respondents say that they are bimodal. However, top performers far outpace average and trailing performers in their use of bimodal with 68 % of all leading performers having adopted bimodal compared with only 17% of the trailing performers.
Master digital ecosystem-ready leadership
Understanding business priorities and applying value disciplines to inform management and execution is foundational to the transition to a digital ecosystem. The survey showed that, together with their CEOs, high-performing CIO leaders share a focus on growth and digitization. Growth is a recurring theme in this year's strategic business priorities, with 28 %of the top performers, 21% of the average performers, and 24% of trailing performers identifying it as a top three priority. Digital business/digitalization is a high strategic business priority among the top and average performers (28% and 20%, respectively), but was only cited by 6% of trailing performers.