To increase their influence, CIOs need to focus on the power, scale, and dynamics of the digital business — based on connections to people and things, interconnections and relationships, and on the value of algorithms — according to Gartner. These algorithms accelerate value in the digital economy in what Gartner analysts call the “economics of connections”.
Driven by digital business, Gartner forecasts that IT spending in EMEA is on pace to reach $1 trillion in 2016, a 1.3 per cent increase from 2015. Gartner also estimates that global digital commerce is now worth over $1-trillion annually.
“Value can mean multiple things. It can be the knowledge and the insight you gain, or it can be the trusted relationships that you build,” says Daryl Plummer, vice-president and Gartner Fellow. “In the end, value is what you achieve for customers or citizens. The greater the density of the connections, the greater potential value you reap.”
CIOs can create that density in three steps: Give, Take, and Multiply:
* Give access to everything that’s more valuable shared than locked away.
* Take active advantage of all other resources out there. Tap into the power of all kinds of computing and information networks.
* Multiply by allowing your connections to interact directly with each other.
Plummer shares the example of Tesla, which has shared its patents on superchargers for free. He adds that Tesla believes that if others invest too, everyone will benefit from more pervasive and cost-effective technology. While others will benefit, Tesla understands that as everyone adopts its standards, Tesla can grow its market.
“Give and take leads to an active dynamic network of connections, in which you are the guiding light, the main influencer,” Plummer says. “However, the leverage is still limited. All people, business and things have value to offer. That value is only truly unlocked if they start to interact with one another. The goal becomes to multiply these connections. Facilitated and encouraged by you, but not controlled by you. Creating a tightly woven fabric, a ‘mesh’ of connections.”
To realise the promise of the economics of connections, CIOs have three obstacles to remove:
• * A control mindset
• * Inertia
• * Lack of trust
“This is all about mindset,” says Lee Weldon, managing vice-president at Gartner. “Control moves to influence. Inertia is removed by divesting, and distrust should be turned into trust, within IT, within the enterprise and beyond.”
To truly drive results, CIOs must evolve into a trusted ally to the CEO. “The trusted ally CIO is a leader for information and technology across the entire organisation. Trusted allies have the ability to lead whether technology ownership sits inside, or beyond the IT department,” Weldon says.
Gartner’s 2015 CIO Agenda Survey shows that over half of trusted ally CIOs report that they lead digital teams across their organisation, versus a third of all other CIOs. Trusted allies are more involved with business change and strategy, they do more crowdsourcing, and they work more with startups.
Weldon adds that one trait that makes CIOs stand out from other executives is their “intuitive thinking”. CIOs are intuition outliers. Intuitive thinkers are better at solving complex problems in creative ways. With the arrival of the algorithmic economy, it creates opportunities for the CIO’s skills, capabilities, and insights. This will widen the circle of influence for the CIO.
As CIOs move on the path to create more value through increased influence, they must divest. IT organisations need to overcome the inertia that has built up over decades.
Plummer highlights a few examples of where it’s time for IT to divest itself:
* Legacy fatalism: the belief that you cannot get free from legacy systems. These are applications and infrastructure that either paid off long ago, or will never see a payoff. Take a good look at pet projects, technical debt, and historical duds that might be dragging the IT department down. Cut them loose, do this now, and don’t be a legacy fatalist.
* Ownership bias: where you think that building, owning and operating yourself will lead to better results. The reality is if someone else can do it better, and will do it better, let them. For example, citizen developers, those outside the CIO’s control, are the future of software development. Find them and embrace them.
“However, CIOs should never divest their innovation capability, their digital strategy, their differentiating algorithms,” adds Plummer. “These should never be divested as they are part of their economics of connections.”
Trust is an emotion. “It is the confidence people have in your future behaviour,” Weldon says. “Algorithms allow companies to trust people to the exact level they deserve: dynamically and at scale. Trust goes two ways. People must trust your business too, to connect to you. It is the confidence people have in your future behaviour.”
Weldon highlights four essential elements to managing trust: produce results; be predictable; understand human context; and be visible.