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GOLD COAST, Australia, November 18, 2014

Gartner Survey Finds Australia and New Zealand CIOs Know They Need to Change Their Leadership Style to Grasp the Digital Opportunity

Chief Information Officers (CIOs) in Australia and New Zealand are aware that they will need to change in order to succeed in digital business, with 79 percent of respondents saying that they need to adapt their leadership style in the next three years, according to a new survey from Gartner, Inc.

In its annual survey of more than 2,810 CIOs worldwide, representing more than US$397 billion in CIO IT budgets in 84 countries, Gartner asked how CIOs should adapt their leadership to ensure their enterprises survive and thrive in an increasingly digital world. The survey included responses from 161 CIOs in Australia and New Zealand, representing more than $8 billion in IT spending.

Speaking at Gartner Symposium/ITxpo on the Gold Coast today, Gartner vice president and executive partner Graham Waller said many technology leaders face three persistent issues that impede digital opportunities.

“In order to grasp digital opportunities, CIOs need to flip from legacy first to digital first in terms of technology leadership, from what’s visible to what’s truly valuable in value leadership, and from control first to vision first in people leadership,” he said. “In short, to thrive in this digital era, CIOs must flip to digital leadership.”

“The digital world has moved from the shadows to centre stage. Digital is a game changer, creating winners and losers in all industries and geographies, including Australia and New Zealand,” said Mr. Waller.

According to the survey, 93 percent of Australian and New Zealand CIOs agree that in addition to the considerable opportunities it brings, the digital world is creating new, different and higher levels of risk, and 66 percent said that the discipline of risk management is not keeping up. CIOs therefore need to review with the enterprise and IT risk leaders whether risk management is adapting fast enough to a digital world.

The good news for CIOs is that they are being given the opportunity to be digital leaders. According the survey, 35 percent of Australian and New Zealand CIOs report to their CEO, up from 30 percent two years ago and compared to 41 percent worldwide. This is a return to one of the highest levels it has ever been, a result of the digital narrative gaining prominence in the boardroom and on the executive committee.

When asked to distribute responsibility for leading digital innovation and change over the next two years, Australian and New Zealand CEOs in a 2014 Gartner survey allocated 22 percent of the responsibility to the CIO (compared to 15 percent for global CEOs).

However, as in last year's CIO survey, IT budgets are not growing. The average IT budget in Australia will be essentially flat (down -0.2 percent) in 2015 compared to 2014 levels. This is slightly lower than the one percent growth from 2014 to 2015 expected globally, and the 3 percent average increase expected in Asia Pacific. Of local CIOs, 25 percent expected a budget cut, compared to 16 percent globally. Australian and New Zealand CIOs estimate that 82 percent of technology spending will be "inside" the IT budget (up from 74 percent last year), but much digital innovation can and will be funded outside the planned IT spending.

Flip information and technology leadership from legacy first to digital first

“Seizing digital opportunities requires agility, adaptability and speed,” says Waller. “However, existing business processes, business models, information, technology and talent suffer from legacy inertia and complexity. CIOs need to simplify business processes, models and ecosystems. They need to flip from legacy first to digital first, and from passive reporting to an active search for insight.”

Business intelligence and analytics tops the list of technology priorities for CIOs in 2015, both in Australia/New Zealand and globally (see Table 1). Cloud and mobile technologies are next on the list.

Table 1: Top Technology Priorities for 2015: Australia vs. Global

 

Australia

Global

1. BI/Analytics

1. BI/Analytics

2. Cloud

2. Infrastructure and Data Centre

3. Mobile

3. Cloud

4. Infrastructure and Data Centre

4. ERP

5. ERP

5. Mobile

6. Digitalisation/Digital Marketing

6. Digitalisation/Digital Marketing

7. CRM

7. Security

8. Networking, Voice and Data Communications

8. Networking, Voice and Data Communications

9. Legacy Modernisation

9. CRM

10. Security

10. Industry Specific Applications

11. Industry Specific Applications

11. Legacy Modernisation

12. AppDev

12. Enterprise Apps

Source: Gartner, October 2014

“The Nexus of Forces (mobile, social, cloud and information) is no longer the exotic; it is the place where all enterprises live,” said Mr Waller.

“It’s important that CIOs don’t view it as the end of the journey,” he said, adding that the next set of digital technologies and trends is coming down the line much faster than most companies are prepared for.

When it comes to thinking about emerging technologies and how they might apply to their business, Gartner’s survey showed that Australian and New Zealand CIOs are behind their global counterparts. For example, 71 percent said that robotics was “not relevant right now” (compared to 63 percent globally), and 64 percent held the same view on smart machines and 3D printing (compared to 49 and 60 percent globally).

Flip people leadership from control to vision

According to Mr. Waller, being a powerful digital leader and influencer takes time. While the average CIO spends more time running the IT shop, high-performing CIOs are spending less, and making extra time to engage their board and senior leadership.

According to the 2015 CIO Agenda, having a deputy, a ‘COO of IT’ type of role reduces the time a CIO spends running IT by 5 percent, or around a day a month. Yet only 42 percent of Australian and New Zealand CIOs have a deputy or similar, compared to 47 percent worldwide.

“Control first leadership does not suit the high-speed, innovative, uncertain nature of the digital world and can actually be an obstacle,” says Mr. Waller.

He believes that vision first, or inspirational leadership is one of the most powerful attributes of the digital leader. Digital leaders need to flip from aligning with corporate culture to building a digital culture.

“A traditional, risk-averse, control oriented corporate and IT culture will devour even the most well informed digital business strategy like a small snack,” Mr. Waller said.

To avoid this fate, Gartner says CIOs need to lead a digital cultural revolution that helps the business understand and get excited about where digitalisation can take them.

More information is available in the report ‘Flipping to Digital Leadership: The 2015 CIO Agenda’: available on Gartner’s web site at: http://www.gartner.com/document/2864717. The report represents the most comprehensive examination of digital business opportunities and threats and CIO strategies worldwide.

Additional comment from Mr. Waller is available on the Gartner YouTube Channel at http://bit.ly/1rS7PoV

About Gartner Symposium/ITxpo

Gartner Symposium/ITxpo is the world's most important gathering of CIOs and senior IT executives. This event delivers independent and objective content with the authority and weight of the world's leading IT research and advisory organization, and provides access to the latest solutions from key technology providers. Gartner's annual Symposium/ITxpo events are key components of attendees' annual planning efforts. IT executives rely on Gartner Symposium/ITxpo to gain insight into how their organizations can use IT to address business challenges and improve operational efficiency.

Additional information about Gartner Symposium/ITxpo 2014 on the Gold Coast is available at www.gartner.com/au/symposium

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About Gartner

Gartner, Inc. (NYSE: IT), is the world’s leading research and advisory company and a member of the S&P 500. We equip business leaders with indispensable insights, advice and tools to achieve their mission-critical priorities today and build the successful organizations of tomorrow.

Our unmatched combination of expert-led, practitioner-sourced and data-driven research steers clients toward the right decisions on the issues that matter most. We are a trusted advisor and objective resource for more than 15,000 organizations in more than 100 countries — across all major functions, in every industry and enterprise size.

To learn more about how we help decision makers fuel the future of business, visit gartner.com.

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