Even as digitalization is becoming pervasive among EMEA organizations, these organizations remain vulnerable to “turns,” forces that create uncertainty and pressure for their CIOs. Ninety percent of EMEA organizations have faced a turn in the last four years, according to Gartner Inc.’s annual global survey of CIOs. With 2020 likely to be more volatile than 2019, CIOs must help their organizations acquire the capabilities needed to win when the next turn arrives.
“Simply being digital isn’t really going to cut it anymore. Forty-one percent of EMEA CIOs are already running mature digital businesses, up from 35% last year. It’s the coming turns that are the problem, not digitalization,” said Andy Rowsell-Jones, vice president and distinguished analyst at Gartner. “No one is immune from economic, geopolitical, technical or societal turns, which are likely to be more common in 2020 and beyond. These turns can take different forms and can disrupt an organization’s abilities in many ways.”
Analysts presented the survey findings during Gartner IT Symposium/Xpo, which is taking place here through Thursday. The 2020 Gartner CIO Agenda Survey gathered data from more than 1,000 CIO respondents, including 383 in 40 EMEA countries, and all major industries. The EMEA sample represents nearly $1.7 trillion in revenue and $23 billion in IT spending.
Turns Weaken an Organization’s Ability to Build Fitness
The nature and severity of the turns reported by CIOs varied widely. In EMEA, they included adverse regulatory intervention (41% of CIO respondents), organizational disruption (40%) and severe operating cost pressure (40%). “Those and other severe scenarios such as IT service failure or natural disaster have affected how organizations do business, and in most cases are making new things harder,” said Mr. Rowsell-Jones. “The real trick is how well organizations weathered these challenges.”
Mr. Rowsell-Jones added that the problem with a turn is that, once you’re in one, it disrupts your ability to respond. Thirty-six percent of EMEA CIOs reported that turns had handicapped them in bringing new business initiatives to market, pushing out time to value and ultimately reduced their success.
Turns also weaken an organization’s ability to build its “fitness” muscles. Thirty-four percent of EMEA CIOs said they were behind in the race to attract the right talent, 30% were suffering slowed or negative IT budget growth, and 32% said funding for new business initiatives had dried up. “No matter what it is, prepare for a turn before you attempt to go around it,” said Mr. Rowsell-Jones.
Fit Organizations Emerge Stronger From Turns Than Fragile Organizations
In the global survey, Gartner separated CIO respondents’ organizations that had suffered a severe turn into two groups — “fit” and “fragile” — based on business outcomes. Gartner looked at over 50 organizational performance attributes to determine what differentiated the two groups.
Results were bundled into three themes — alignment, anticipation and adaptability — which indicated simple shifts in leadership priorities. For example, in times of crisis, leaders of fit organizations ensure that the organization stays together while it shifts to a new direction. They actively search for emerging trends or situations that require change. They take calculated risks but trust the core business capabilities. Leaders in fragile businesses are measurably worse at these things.
The differences between fit and fragile organizations do not end with leadership attitudes. Internal institutions and process matter too. For example, disciplined IT investment decisions and having a clear strategy were cited as key areas of alignment by fit organizations, but much less so by fragile organizations. The survey found that 53% of global fit organizations are likely to have a flexible IT funding model to respond to changes, compared to 43% in EMEA. In addition, having a clear and consistent overall business strategy ranks as one of the most distinctive traits of fit organizations. Sixty-seven percent of the global fit CIOs said their organization excels at this; so, too, did 63% of EMEA CIOs.
A robust relationship with the CEO is also a strong differentiator. A strong CEO relationship helps CIOs learn about a change in business strategy as it occurs. In EMEA, 43% of CIOs are reporting directly to their CEOs. This demonstrates that EMEA CIOs are aligning their purpose and direction with business executives.
EMEA CIOs Are Prioritizing Cybersecurity, RPA and AI for 2020
Fit IT leaders use IT to gain competitive advantage and help organizations anticipate changes ahead of time. Similar to the global fit CIOs, a large percentage of EMEA CIOs have already deployed or will deploy cybersecurity, robotic process automation (RPA) and artificial intelligence (AI) in the next 12 months.
Adaptability is the IT organization’s chief responsibility. “In a fit organization, IT leaders turn the IT organization into an instrument of change,” said Mr. Rowsell-Jones. “Sixty percent of global fit organizations rate the clarity and effectiveness of IT governance very highly. Similarly, 51% of EMEA CIOs rank their organization’s IT governance as effective or highly effective. IT governance can coordinate resource allocation in times of disruption, which offers survival benefits to an IT organization.”
“Digital is no longer the road to competitive advantage,” said Mr. Rowsell-Jones. “How organizations flex as the environment changes and how CIOs organize to deal with turns will dictate their success in the future, especially in 2020.”
Gartner Executive Program members can learn more in the report “The 2020 CIO Agenda: Winning in the Turns.”
About Gartner IT Symposium/Xpo
Gartner IT Symposium/Xpo is the world’s most important gathering of CIOs and senior IT executives, uniting a global community of CIOs with the tools and strategies to help them lead the next generation of IT and achieve business outcomes. More than 20,000 CIOs, senior business and IT executives worldwide will gather for the insights they need to ensure that their IT initiatives are key contributors to, and drivers of, their organization’s success.
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