The study reveals for 58% CEOs, growth is the top business priority, up from 24% in 2016
CEOs have managed to maintain their focus on profits and growth in 2017 even in a highly tumultuous global political scenario. The study reveals for 58% CEOs, growth is the top business priority, up from 24% in 2016.
The key priorities for CEOs in 2017 are product improvement and technology (see Figure 1). “IT-related priorities, cited by 31% of CEOs, have never been this high in the history of the CEO survey,” said Mark Raskino, vice president and Gartner Fellow. According to him, “almost twice as many CEOs are intent on building up in-house technology and digital capabilities as compared to those who plan on outsourcing it (57% and 29%, respectively). We refer to this trend as the reinternalization of IT - bringing information technology capability back towards the core of the enterprise because of its renewed importance to competitive advantage. This is the building up of new-era technology skills and capabilities.”
CEO understanding of digital business is improving
Earlier, most CEOs were apprehensive towards digital business but it is now a reality in 2017.
The board of directors has challenged 47% CEOs to ensure growth takes places in digital business, and 56% said that their digital improvements have already boosted profits. “CEO understanding of the benefits of a digital business strategy is improving,” said Mr. Raskino. “They are able to describe it more specifically. Although a significant number of CEOs still mention e-commerce or digital marketing, more of them align it to advanced business ideas, such as digital product and service innovation, the Internet of Things, or digital platforms and ecosystems.”
Key developments have also been made by CEOs in their digital business journey, with 22% CEOs now taking a ‘digital-first’ approach to business change. “This might mean, for example, creating the first version of a new business process or in the form of a mobile app,” said Mr. Raskino. “22% are taking digital to the core of their enterprise models. That’s where the product, service and business model are being changed and the new digital capabilities that support those are becoming core competencies.”
Half of CEOs lack digital success metric
The intention to go digital is there in most CEOs, however, as per the study, almost half of CEOs have no digital transformation success metric. “For those who are quantifying progress, revenue is a top metric: 33% CEOs define and measure their digital revenue,” said Mr. Raskino.
CIOs to help CEOs set success criteria for digital business
As per the study, deeper transformation can only take place to a large extent if it is systematically driven. “CIOs should help CEOs set the success criteria for digital business,” added Mr. Raskino. “It starts by remembering that you cannot scale what you do not quantify, and you cannot quantify what you do not define. You should also ask yourself: What is ‘digital’ for us? What kind of growth do we seek? What’s the No. 1 metric and which KPIs must change?”
The study highlights that many CEOs have identified that being open-minded, entrepreneurial, adaptable and collaborative are the most-needed digital leadership mindsets. “It is time for CEOs to scale up their digital business ambition and let CIOs help them set and track incisive success metrics and KPIs, to better direct business transformation. CIOs should also help them toward more-abstract thinking about the nature of digital business change and how to lead it,” concluded Mr. Raskino. “The disruption it brings often cannot be dealt with wholly within existing frames of reference.”