Leading businesses must shift to platform thinking in terms of their business models, delivery mechanisms, talent and leadership, in order to survive and thrive, according to a global survey of CIOs by Gartner.
The survey showed that as the implications of digitalisation play out, it is becoming clear that hardcoded business and operational models will not suffice and that a more adaptable approach is required.
The worldwide survey gathered data from 2 944 CIO respondents representing more than $250-billion in CIO IT budgets in 84 countries. The Gartner report, “Building the Digital Platform: The 2016 CIO Agenda,” represents the most comprehensive examination of digital business opportunities and threats, and CIO strategies to address them.
Data from the 2016 CIO Survey shows that the average CIO expects digital revenue to grow from 16% to 37% of total revenue in the next five years. Similarly, public-sector CIOs are predicting a rise from 42% to 77% in digital processes. While the meaning of digital revenue and processes is open to interpretation, it is clear that digital business is a reality now, and it is expected to be a significant aspect of achieving competitive advantage and differentiation using information and technology.
“We are now knee-deep in the era of digital business, with many companies reimagining their business and operating models based on digital capabilities,” says Dave Aron, vice-president and Gartner Fellow. “Businesses and government agencies are looking less like fixed “systems” and more like platforms. A platform provides the business with a foundation where resources can come together – sometimes very quickly and temporarily, sometimes in a relatively fixed way – to create value.”
“Leading economists have noted the increasing prevalence of platform business models, where multiple networks of stakeholders bring value to each other by exploiting network effects,” says Graham Waller, research vice-president at Gartner. “Technologists have long recognised the power of platform approaches to information and technology architecture. What is new is that platform dynamics are being applied to create value in all aspects of the business.”
In 2014, Gartner said that it is essential to have two modes of IT, and ultimately of the entire business, to deal with both predictable and exploratory work. Two years later, the 2016 CIO survey found that almost 40% of CIOs are on the bimodal journey, with the majority of the remainder planning to follow in the next three years. The evidence is that building a mature bimodal platform results in much better digital strategy performance.
Furthermore, the survey data suggests that one of the worst things a CIO can do is to delay bimodal. Those who are planning to move toward bimodal, but have not taken steps yet, came out worst in terms of digital strategy performance.
According to the survey, 65% of CIOs believe there is a talent crisis in the world, and yet there is surprisingly little talent innovation. Since virtually all stakeholders recognise the issue of talent as the biggest barrier to success, Gartner says that talent must also be treated as a platform.
“It is time to think of talent as a platform and innovate with it. CIOs must look at digital talent beyond the boundaries of the IT organisation, and indeed beyond the boundaries of the business,” says Aron. “Innovative talent management opportunities abound and include getting closer to universities by helping define and deliver courses and projects, performing reverse mentoring and implementing job rotations. CIOs should also think of their partners as extensions of the talent pool.”
The survey found that nearly 40% of CIOs are the leaders of digital transformation in their organisation, and more than 30% are the innovation leader. The survey also showed that penetration of the chief digital officer role has stalled at 9%, the same as last year. The results showed that CIOs are being given the opportunity to lead digital transformation, but they must adapt their leadership style to exploit platform effects in leadership, building a network of digital leadership inside and outside the enterprise.
“Of course, not all businesses and government agencies are becoming platform businesses in terms of industry dynamics, either today or even in the near future,” says Aron. “However, to remain competitive, all businesses need to understand and exploit platform effects throughout the business. If platform effects are not considered in any aspect of the business – such as leadership, talent or delivery – this represents a bottleneck in the organisation’s ability to deliver, attract and retain talent, and to ultimately be perceived by customers as adding value. CIOs must build a plan to evolve all layers of their business’s digital platform.”