Gartner Research

Executive Pulse: The Acceleration of Digital Commitments

Published: 13 August 2020

Summary

Here’s a roll-up of pandemic-related executive sentiment and insights from thousands of functional leaders across the C-suite.

Fast word on tactics and concerns from thousands participating in our conference calls andpolls.

More detailed role-specific reports may be available on the website, depending on your subscription.

In the face of widespread and sudden recession, companies are accelerating and increasing their digital bets — not just holding the line, but deepening their commitment throughout the organization. From the board to IT to other functions such as supply chain, leaders are looking to technology to solve crisis-related problems and also to change fundamental market expectations and behaviors for years to come.

More than half of IT and other business leaders predict a decline in revenues for their organizations over the next twelve months.

Yet 86% of them also expect an increase in digital investments over the same period … with a quarter predicting an increase above 20%.

Figure 1. Organizations Increase Digital Investments Despite Revenue Shocks

Seven in ten board members say COVID-19 has also increased support for long-term digital business initiatives. In a survey of 265 board members, they are seeking to ...

  • Improve operational performance (60%).

  • Make spending more efficient (50%).

  • Expand digital business opportunities (48%).

Four in ten are considering a complete digitally-driven transformation of their business model.

Figure 2. Impact of COVID-19 Disruptions on Organization’s Digital Business Initiatives

The Asia/Pacific region is setting the pace; 82% of board members there say digital business initiatives are accelerating, compared with 69% in Europe and the Middle East and 64% in North America.

That’s also reflected in tech budgets … with APAC board directors reporting an average 13% rise for 2020, compared with 6% for Europe and North America.

Underlying all of this is a perception that organizations have no choice but to go all in on digital, given it’s preeminent position in shaping business strategy and further disrupting conventional approaches.

Figure 3. Digital Disruption Is the Top External Trend Shaping Business Strategy

In response to the virus crisis, the most common top new leadership position that companies are thinking about creating is chief digital officer.

Figure 4. New C-level Roles Created to Respond to COVID-19

To realize the benefits of digital transformation, corporate directors also want existing executive leaders to be more flexible ...

  • Eighty-nine percent think executives need to have strong cross-functional collaboration.

  • Seventy-two percent are considering changes to the organizational structure.

  • Fifty four percent want leaders to manage functions more like tech startups.

Supply Chain leaders, hit early and hard by the global implications of the pandemic, provide a good example of how executive leadership is embracing digital business transformation.

In a global survey of 585 supply chain executives technology (including artificial intelligence, the Internet of Things and robotics) is seen as the most positively disruptive force affecting their competitive position so far this year.

Figure 5. Impact of the Most Disruptive Event on the Supply Chain’s Competitive Position So Far

Supply chain leaders also experience disruptive events that lie outside their immediate control … namely politics. Twenty-three percent say political shifts are having a negative impact on their competitive position. These risks include trade policy, tariffs, immigration and migration, armed conflict, terrorism and regulatory requirements.

Some of the efforts underway to mitigate the risks of any type of upheaval are:

  • Active consideration and shaping of supply location concentration, such as less reliance on China (45%).

  • Performance based contracts with suppliers and/or customers (50%).

  • Dual or multi sourcing supply (43%).

  • Supplier requirements for multiple/alternative sites (42%).

Compiled by Daniel Ryntjes

Contact with any questions or comments.

Recommended by the Authors

The impacts of COVID-19 need a cross-functional response. Access all of our research to help your partners in assurance, supply chain, HR, IT and others act quickly and confidently. You’ll find tips, toolkits and other planning advice.

Cost optimization can be risky. The wrong moves can result in cuts that impede an organization’s ability to maintain liquidity, retain key talent, keep innovating and prepare for recovery. We’ve provided the research and tools to help leaders make data-driven decisions supported by proven approaches.

Analysts:

Corporate Strategy Research Team

Access Research

Already a Gartner client?

To view this research and much more, become a client.

Speak with a Gartner specialist to learn how you can access peer and practitioner research backed by proprietary data, insights, advice and tools to help you achieve stronger performance.

By clicking the "Continue" button, you are agreeing to the Gartner Terms of Use and Privacy Policy.

Gartner research: Trusted insight for executives and their teams

What is Gartner research?

Gartner research, which includes in-depth proprietary studies, peer and industry best practices, trend analysis and quantitative modeling, enables us to offer innovative approaches that can help you drive stronger, more sustainable business performance.

Gartner research is unique, thanks to:

Independence and objectivity

Our independence as a research firm enables our experts to provide unbiased advice you can trust.

Actionable insights

Not only is Gartner research unbiased, it also contains key take-aways and recommendations for impactful next steps.

Proprietary methodologies

Our research practices and procedures distill large volumes of data into clear, precise recommendations.

Gartner research is just one of our many offerings.

We provide actionable, objective insight to help organizations make smarter, faster decisions to stay ahead of disruption and accelerate growth.

Tap into our experts

We offer one-on-one guidance tailored to your mission-critical priorities.

Pick the right tools and providers

We work with you to select the best-fit providers and tools, so you avoid the costly repercussions of a poor decision.

Create a network

Connect directly with peers to discuss common issues and initiatives and accelerate, validate and solidify your strategy.

Experience Gartner Conferences

Join your peers for the unveiling of the latest insights at Gartner conferences.

©2022 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. and its affiliates. This publication may not be reproduced or distributed in any form without Gartner’s prior written permission. It consists of the opinions of Gartner’s research organization, which should not be construed as statements of fact. While the information contained in this publication has been obtained from sources believed to be reliable, Gartner disclaims all warranties as to the accuracy, completeness or adequacy of such information. Although Gartner research may address legal and financial issues, Gartner does not provide legal or investment advice and its research should not be construed or used as such. Your access and use of this publication are governed by Gartner’s Usage Policy. Gartner prides itself on its reputation for independence and objectivity. Its research is produced independently by its research organization without input or influence from any third party. For further information, see Guiding Principles on Independence and Objectivity.