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Digital opportunities and threats

Linda Price, group vice-president, executive programmes, Gartner | April 25, 2013
CIOs face a future torn between current operations and digital opportunities. Hunting for digital innovation and harvesting that value across the enterprise describes a deeper role for technology in the enterprise and a step outside the comfort zone for many.

CIO budgets in Australia and New Zealand are expected to grow an average of 2.6 percent this year. However, 52.3 percent of CIOs report that their budgets are flat, and 27 percent expect them to decline, according to the 2013 Gartner Executive Programmes global survey of 1959 CIOs, which included 112 CIOs from Australia and New Zealand. This marks another round of IT strategies based on doing more with less - really just doing the same with less.

Technology needs a new story. The current story revolves around current operations, with a focus on cost, quality and services. It is a story defined by IT's role as 'tender' of the garden of legacy applications, outsourced operations and limited value creation.

The current story is not working. On average, CIOs globally report that their enterprises realise only 43 percent of technology's potential. Clearly this number needs to increase if organisations are to create value via technology.

From tending the garden to hunting and harvesting

The CIO's role has traditionally been to nurture IT services and their infrastructure in service of business processes, and then to execute discrete projects aimed at replacing legacy systems or fulfilling new needs identified by the business. The business value created from this paradigm is further automation, integration and standardisation. This 'tending the back office' approach leaves gaps in two areas: first, proactively identifying business opportunities based on new digital capabilities and realities (hunting), and second, extending value from existing information and technology investments (harvesting).

Taking on a greater hunting role benefits the business in finding and acting on disruptive digital opportunities and threats early and often. CIOs can guide the organisation in reimagining business models based on the combined impact of mobile, big data/analytics, cloud and social technologies (what Gartner calls the 'nexus of forces'). They can create new 'digital edge' capabilities using different combinations of physical and digital resources, or identify threats from non-traditional areas based on digital capabilities (what American companies Borders and Kodak failed to do).

Exploiting these trends will allow organisations to enrich the customer experience, serve customers better, target new customer groups and enter or create completely new businesses based on digital capabilities. The value of harvesting comes from continually tuning existing digital assets, not just for improved IT efficiency and effectiveness, but also to serve the evolving needs of the business and its customers.

Stepping outside the comfort zone

As business needs and opportunities evolve, more CIOs find themselves leading in areas outside of traditional IT. In addition to their tending role, they are assuming responsibility for hunting for digital opportunities and harvesting value. 

 

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