10 Ways to Fund the Shift to Digital Business

Digital transformation requires significant investment, outside the traditional IT operating budget.

Many of the options for digital business transformation, such as acquisitions and ventures, require significant investment. So where does the money come from?

CEOs in Gartner’s 2017 CEO survey reported that the largest bulk of digital transformation funding comes from self-funding, rather than existing budgets, as they see the primary purpose of digital initiatives to win revenue rather than to save costs.

“This should give CIOs pause for thought, given conventional IT management works mostly on the basis of using operating budgets,” says Andy Rowsell-Jones, vice president and distinguished analyst at Gartner. “Digital transformation requires commitment, leadership, strategy, technology, innovation and importantly, money.”

Gartner IT Symposium / Xpo 2019

The world's most important gathering of CIOs and IT executives

Learn More

Globally, interest rates on borrowing are at cyclical lows, and balance sheet cash reserves have been at cyclical highs. According to Rowsell-Jones, this year and next are likely to be the optimal timing points of overlap between the business cycle and the tide of digital business change.

“In two years’ time, the rising cost of capital could make strategic investment more expensive, and playing digital catch-up is harder,” he says.

CIOs should remind CEOs and CFOs that digital disruption is a fast foe when it strikes, and discuss the full list of ideas with them to see if different or more radical options could be tried.

Digital transformation funding

Raskino_Mark

Gartner clients can read more in the report 2017 CEO Survey: CIOs Must Scale Up Digital Business by Mark Raskino.

Get Smarter

Gartner CIO Events

Learn more about CIO leadership and how to lead your enterprise through its digital journey.

Explore Gartner Events

The Future of Your Business Ecosystem in the Age of Digital Business: A Gartner Trend Insight Report

Business ecosystems continue to evolve, becoming the basis of innovative business models. To succeed, organizations must design creative...

Read Free Research

Webinars

Get actionable advice in 60 minutes from the world's most respected experts. Keep pace with the latest issues that impact business.

Start Watching