Press Release

GOLD COAST, Australia, October 26, 2015 View All Press Releases

Gartner Survey Reveals More than Half of Australian and New Zealand CIOs are Leaders of Digital Transformation in their Enterprise

Analysts Present the Gartner 2016 CIO Agenda at Gartner Symposium/ITxpo 2015, 26-29 October in Australia

Leading businesses must shift to platform thinking in terms of their business models, delivery mechanisms, talent and leadership, in order to survive and thrive, according to a global survey of CIOs by Gartner, Inc. The Australian and New Zealand (ANZ) survey data showed that a higher proportion of CIOs lead digital transformation and innovation in their enterprise, but progress towards digital business in ANZ is slower than the global average.

Graham Waller, vice president at Gartner and co-author of the new Gartner book ‘Digital to the Core’, presented the survey findings at Gartner Symposium/ITxpo on the Gold Coast today. The worldwide survey gathered data from 2,944 CIO respondents representing more than US$250 billion in CIO IT budgets in 84 countries, including 175 in ANZ. The Gartner report, "Building the Digital Platform: The 2016 CIO Agenda," represents the most comprehensive examination of digital business opportunities and threats, and CIO strategies to address them.

The 2016 CIO Survey shows that the average ANZ CIO expects digital revenue to grow from 14 percent now to 32 percent of total revenue in the next five years (globally, CIOs expect digital revenues to grow from 16 percent to 37 percent in the next five years). In the ANZ public sector, CIOs are predicting a rise in digital processes from 38 to 79 percent (from 42 percent to 77 percent globally). While the meaning of digital revenue and processes is open to interpretation, it is clear that digital business is a reality now, and it is expected to be a significant source of competitive advantage.

"As digitalization is intensifying, it is becoming clear that hardcoded business and operational models will not suffice and that a more adaptable approach is required," said Mr. Waller. "Leading businesses and government agencies are looking less like fixed "systems" and more like platforms. A platform provides the business with a foundation where resources can come together — with the ability to rapidly configure groups of assets both across the business and the broader ecosystem — to create value."

"Leading economists have noted the increasing prevalence of platform business models, where multiple networks of stakeholders bring value to each other by exploiting network effects. Technologists have long recognized the power of platform approaches to information and technology architecture. What is new is that platform dynamics are being applied to create value in all aspects of the business,” said Mr. Waller.

The Gartner survey showed that the purse strings are loosening, but only a little. Australian and New Zealand CIOs expect an average budget increase of 2.9 percent, slightly higher than the global weighted average of 2.2 percent and an improvement over last year’s expected slight decline in ANZ of 0.2 percent. However, ANZ CIOs cited money as their biggest barrier to achieving their objectives as a CIO, while globally, skills are seen as the top barrier.

Build a Leadership Platform

The survey found that 52 percent of ANZ CIOs are the leaders of digital transformation in their enterprise, and more than 40 percent are the innovation leader. This is significantly higher than the global averages of 40 and 30 percent respectively.

“These results show that CIOs are being given the opportunity to lead digital transformation, but they must adapt their leadership style to exploit platform effects in leadership, building a network of digital leadership inside and outside the enterprise,” Mr. Waller said.

The survey also found that chief digital officers (CDOs) are not being put in place as fast as expected. Currently 9.1 percent of ANZ enterprises said they have a CDO, around the same as the global average of 9.3 percent (up from 6.6 percent globally two years ago).

The Threat Matrix is Evolving

When asked to choose whether security and cyber risk or new competitive and commercial threats posed a greater threat to their business, 66 percent of ANZ CIOs chose security and cyber risk (compared to 54 percent in the overall global survey). On the competition front, ANZ CIOs are equally concerned about digitally driven competition from traditional industry competitors (50 percent) and digital-enabled companies entering their industry from other industries (50 percent).

Create a Bimodal Delivery Platform

In 2014, Gartner said that it is essential to have two modes of IT, and ultimately of the entire business, to deal with both predictable and exploratory work. Two years later, the 2016 CIO survey found that almost 40 percent of CIOs are on the bimodal journey, with the majority of the remainder planning to follow in the next three years. The evidence is that building a mature bimodal platform results in much better digital strategy performance. Furthermore, the survey data suggests that one of the worst things a CIO can do is to delay bimodal. Those who are planning to move toward bimodal, but have not taken steps yet, came out worst in terms of digital strategy performance.

Evolve the Talent Platform

According to the survey, 49 percent of ANZ CIOs believe there is a talent crisis, and yet there is surprisingly little talent innovation.

"It is time to think of talent as a platform and innovate with it," said Mr. Waller. “CIOs must look at digital talent beyond the boundaries of the IT organization, and indeed beyond the boundaries of the enterprise. Innovative talent management opportunities abound and include getting closer to universities by helping define and deliver courses and projects, performing reverse mentoring and implementing job rotations. CIOs should also think of their partners as extensions of the talent pool."

CIOs globally and in ANZ identified the biggest talent gap as information and analytics skills. However, in ANZ the next two biggest skills gaps are project management and architecture skills, while globally, CIOs cited business acumen and security as the biggest skills gaps.

Technology Priorities for 2016

The top areas of new technology investments clearly show that significant spending and opportunity continues in big data and analytics, and that cloud continues to have significant momentum.

“As has always been the case with business intelligence, the key to big data is to point it at opportunities to harvest real business value from insight. The opportunity is to monetize big data, underpinned by the cloud,” said Mr. Waller.

2016 Rank

Priority in ANZ

ANZ Percentage*

Global Rank

1

BI/analytics

43%

1

2

Cloud

33%

3

3=

Digitalization/Digital Marketing

24%

5

3=

Mobile

24%

6

4

ERP

17%

4

5

Legacy Modernization

16%

9

6=

Infrastructure and Data Centre

13%

2

6=

CRM

13%

11

7

Networking, Voice and Data Communications

12%

8

8

Industry-specific Applications

9%

10

9

Security

7%

7

*Note: Percentages represent the proportion of CIOs citing each priority as one of their top three areas of new IT spending

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.

Video replays of sessions are available on Gartner Events on Demand. Follow news, photos and video coming from Gartner Symposium/ITxpo on Smarter With Gartner, on Twitter using #GartnerSYM, Facebook and LinkedIn.

Upcoming dates and locations for Gartner Symposium/ITxpo 2015 include:

October 28-30, Tokyo, Japan

November 2-5, Goa, India

November 8-12, Barcelona, Spain

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