Kathy Gibson is at Gartner Symposium in Cape Town – Top performing CIOs are about two years ahead of the laggards when it comes to having, and executing, a digital plan.
Only about 8% of CIOs, however, are top performers, with the bottom CIOs accounting for about 10%, and 82% making up the middle or typical performers
Top performers get more budget – about 4% more than in 2017 compared to 2,8% for the middle-performing organisations and 2,3% for bottom performers. On the other hand, top-performing CIOs support a total 5,2% budget change in their organisation.
For the last five years, CIOs have been on journey: in 2014, they were taking on the digital dragon; in 2015 it was about flipping to digital leadership; in 2016, they were building the digital platform; and in 2017, the priority was to seize the digital ecosystem opportunity.
In 2018, the journey is about mastering the new job of CIO, says Tomas Neilsen, research director at Gartner. This involves pre-empting disruption, defining the new job, and living the new job.
“Digital disruption is no longer optional,” he stresses.
Digital business is maturing and forcing organisations to change their business models and look to IT to help. Half of the CIOs in Africa said their organisation has changed or is in the process of changing their business models, and the CIO will have a pivotal role to play, according Gartner’s annual CIO survey.
The survey found that 63% of CIO respondents in Africa are taking a lead role or are heavily involved in the decision to change business models.
The survey also revealed that IT has a paramount role to play in the change. “For 90% of CIOs in Africa, IT is very or extremely important to business model change,”” says Nielsen.
Among top performers, 99% say technology is very or extremely important, 95% of typical performers says it is very or extremely important, and 78% for trailing performers.
For CIOs, efforts to improve customer experience focus on ease of engagement, cost to serve, and personalisation.
“So top performers don’t have a magic silver bullet – they just do a lot more,” Neilsen says.
Top performers are also a lot more likely to scale their IT capabilities to meet expanded external needs, as well as internal needs.
“They don’t look only to their own organisation, but take a customer-centric point of view. What is shaping their direction is not their colleagues, but their customers.”
Top performers measure usage and impact for customers first and for business second.
“It’s telling that top performers are customer-centric, and they measure how often customers use the apps and the impact of it on customer experience. What really matters to them is whether people are using it.”
Successful companies will be those that shift to product management “It’s about IT taking on business priorities. Top performers have mostly implemented product-centric delivery, at 75%.”
There are massive benefits to product-centric adoption, so the question is why 57% of African companies have not implemented it, Neilsen says.
“But it does take something else – it’s not just about changing the culture,” he adds.
Top performers tend to have invested in DevOps, culture change, defining new architecture and tools, and new skills. They also educate stakeholders and implement a phased approach to change.
“Yes, this is about technology – but it is about business-enabling technologies,” Neilsen points out.
Top performers have increased spending on business intelligence and data analytics, cyber-information security cloud services, core system improvements and digital business initiatives.
“We see things like AI have gone right past the 20% tipping point, while conversational interfaces have come from nowhere to 31%.”
Other technologies coming close to the tipping point are edge computing, 3D printing, immersive experiences, and robot/drone/swarm technologies.
For top performers, AI and machine learning are seen to be game-changing technology for 40% of them, with data analytics following at 23%.
“The role of the CIO has become so diverse, no single CIO can do everything,” Neilsen says. More than ever, being a CIO is about prioritisation and focus, he adds.
“Just 15 years ago, the role of the CIO was to support the business by delivering efficiency and effectiveness. The questions being asked of technology leaders now is what business are we in, and what is the business model? CIOs that are involved in that discussion have a seat at the table.”
In fact, the CIO reporting lines correlate closely with digital maturity, Neilsen says. Where there are no digital initiatives, just 31% of CIOs report to the CEO. This compares to 57% for top-performing CIOs. Just 12% of top performers report to the chief financial officer.
Overall, 65% of CIOs are part of the executive team; for top-performing companies, this is 79%.
“Are we seeing CIOs taking leadership roles?” Neilsen asks. “Yes, to some degree. The CIOs who are more excited about technology probably don’t get a seat at the table.”
Priorities for African CIOs
The shift in business and operating models means that CIOs must secure a new foundation for IT. Globally 33% of organisations are scaling and harvesting the results of digital business, while in Africa only 21% of CIOs are at that stage.
“African CIOs are still catching up on their digital business efforts compared with their CIO peers globally,” says Nielsen. “More than half of CIOs in Africa are showing an interest or are at the designing stage, while the majority of the top global performers are scaling their digital initiatives, optimising them or seeking new opportunities.”
CIOs in Africa have some inroads to make in order to compete with their global peers. To help them move their digital initiatives from tentative experiment to massive scale they need to adopt a new secure foundation for their IT efforts.
Nielsen recommends CIOs in Africa focus on three elements:
* Secure customer centricity: Don’t rush into the goal of “digital first”, instead, focus on creating continuous experience across the customer lifecycle. Then ensure that cybersecurity programmes become digital business enablers, rather than obstacles to innovation. Finally, measure what matters. For 36% of CIOs in Africa, the impact on consumer engagement was their top KPI to measure digital investments.
* Resourced product management: This is where CIOs shift from a project to a product approach to digital business. A product-centric approach reduces friction in the delivery of driving quicker business outcomes, as well as improving customer satisfaction and employee engagement, and enables high flexibility. That flexibility is crucial to the implementation of digital business value propositions.
* Business enabling technologies: The choices a CIO makes about technology are essential to the success of digital business. In this situation, CIOs support the change in business and operating models by adopting game-changer technologies, artificial intelligence (AI) being one of them.
Digital was ranked among the top business priorities by CIOs in Africa. Thirty percent of CIOs in Africa placed digital as their number one business priority for the remainder of this year and next year. Business growth (23% of CIOs) was named as the number two business priority.
“This ranking shows that CIOs in Africa are making digital an integral part of their business strategy and planning,” says Nielsen. “They clearly want digital-fuelled growth in 2019.
“Digital is not a nice to have, it’s mandatory. The investment in digital is increasing and digital continues to gain currency across the economy in Africa.”
The financial outlook for IT in Africa is also promising. CIOs in Africa expect their enterprise IT budget to increase 4,3% on average in 2019. This is up from an average of 3,1% last year.
While the choice of technologies has not changed year over year, the spending amount for each has greatly increased. CIOs in Africa expect to spend the highest amount of new or additional funding in 2019 on business intelligence and analytics (57%), cybersecurity (46% of respondents) and digital business initiatives (39% of respondents).
The survey also showed that cybersecurity is becoming a board issue. Forty-eight percent of CIOs in Africa are accountable for cybersecurity, while it is the responsibility of 20% of the board in Africa.
“Cybersecurity is one of our hygiene factors,” says Nielsen. “It has to work. CIOs get no thanks when it does, and when it fails spectacularly enough, they can lose their jobs.”
Cybersecurity has already been deployed by 49% of CIO respondents in Africa and 33% of them will deploy it in the next 12 months.
While cybersecurity is the top digital technology deployment among CIOs in Africa, disruptive technologies are reaching a tipping point. Conversational platforms were ranked in the number two position with 15% of CIOs in Africa who have already deployed it and 13% who will deploy it in the next 12 months. This signals consumer-driven advances in customer channels.
AI was ranked third and is used in connection with cybersecurity. “For a quarter of CIOs in Africa, they will use their AI-based applications for fraud analysis on transactional data,” says Nielsen.
“In 2019, the journey into digitalisation will accelerate and it is critical that CIOs master new abilities to anticipate and prepare the needed changes that result from the scaling of their digital business initiatives,” says Nielsen.