How CIOs Achieve Digital Value at Scale

November 05, 2019

Contributor: Heather Pemberton Levy

In the Gartner Symposium/ITxpo 2017 keynote, Peter Sondergaard gives CIOs a strategy to scale digital transformation.

Four years into the shift to digital business, we sit at the top of the peak of inflated expectations, opened Peter Sondergaard, executive vice president of research at Gartner, in the keynote at Gartner Symposium/ITxpo 2017 in Orlando, Florida. Sondergaard was referring to the iconic Gartner Hype Cycle and that pivotal location that precipitates a fall into the trough of disillusionment. He then challenged more than 7,500 CIOs and IT leaders attending the conference to embrace the urgency of digital and harness new key performance indicators (KPIs), role opportunities and scale accelerators to speed through that trough to the plateau of productivity.

“This is critical,” Sondergaard said. “Because if your organization is not both optimizing and creating new digital business models -- or new ways to engage constituents or customers ... you are falling behind. You will be stuck in the trough.”

Explore new industry triggers

Citing Amazon’s rise this year to become the largest clothing retailer in the United States, CIOs should notice a clear pattern: Once digital revenues for a sector hit 20% of total revenue, incumbent players must fight to survive. Noting that this is when the digital bloodbath begins, Sondergaard said, disruption is the new black.

No matter what industry you are in, 20% will be the point of no return ”

“We believe this lesson in retail, applies to every industry, everywhere,” Sondergaard said. “No matter what industry you are in, 20% will be the point of no return.”

Develop new digital KPIs

Digital transformation requires a new set of metrics. Sondergaard referenced the Gartner Digital IQ Index as an example of a new type of digital KPI. The Gartner Digital IQ Index provides metrics of a brand’s presence in social media, e-commerce, digital marketing and mobile. In other industries, organizations might measure how many ecosystems they participate in, and the conversion rates in each. For railways, an experiential KPI measures how and when passengers are delivered versus runtime. Digital KPIs measure leading, not lagging, indicators and should become a compass for the organization as well as a metric for leadership performance.

CIOs can lead digital transformation as one of three roles.

New role opportunities

Two-thirds of all business leaders believe that their companies must pick up the pace of digitalization to remain competitive. This puts CIOs in the spotlight to lead digital transformation as:

  • A partner CIO,
  • A builder CIO,
  • Or a pioneer CIO

A partner CIO could ask, what would Steve Jobs do to make employee apps irresistible? IT partners operate in a more transactional way with a focus on managing services, core IT and value for money, while also preparing for digital.

Digital builders ask, what would Google do to create a culture that unleashes a rich set of digital product skills across IT? The Digital Builder designs and enables new products and services working with others across the enterprise.

Digital pioneers ask what would Elon Musk do to recruit talent from a new industry to disrupt their own? The Digital Pioneer acts like an entrepreneur and leverages technologies to build new capabilities, new business models, and new revenue streams to achieve digital value at scale.

Achieve digital value at scale

This imperative to drive digital value at scale isn’t necessarily a call to be bigger. Sondergaard pointed out that in the emerging world of interconnected platforms and ecosystems, smaller organizations can rapidly compete with the largest. How to begin? Start by scaling up, across and out.

Scaling up is about gaining efficiencies and maximizing output relative to input.

Scaling across takes capabilities and lessons learned from one organizational unit into another. This entails both technical agility as well as creating a culture that rapidly learns and adapts.  

Scaling out interconnects platforms and ecosystems in both the internal and external world.

Overcoming the talent hurdle

Most CIOs are well aware of the scarcity of talent and Sondergaard provided striking statistics about the true challenges for specific roles. After meeting demand for cloud computing, project management and information management roles since 2015, the market now can’t meet demand for security roles. Next on the horizon: the need for artificial intelligence (AI), digital security and Internet of Things (IoT) roles will outstrip supply.

Gartner analysis of 200 million job postings indicates the demand for and lack of specific types of IT skill sets. The need for AI talent can’t be underestimated. “We believe that AI will be critical to solving both digital security and IoT challenges,” Sondergaard said. “It will be an essential defense, creating a continuously adaptive risk and trust response.”

“ In 2020 2.3 million jobs will be created to balance the 1.8 million jobs lost to AI ”

Another tactic is to use AI to help find people, develop people and further out, augment people. While AI may automate some people out of work in the near term, Gartner predicts that starting in 2020 2.3 million jobs will be created to balance the 1.8 million jobs lost to AI.

Unleash three accelerators to scale digital growth.

Tap into 3 scale accelerators

Beyond developing the necessary talent to scale their digital growth, CIOs can “unleash” three scale accelerators to meet the urgency for transformation.

  1. Digital Dexterity is a new set of attributes and skills to allow you to operate successfully in a continuously changing digital world.
  2. Network Effect Technologies, including blockchain, mixed reality (AR and VR) can help you create virtuous patterns of growth – where waves of disruption build upon each other, exponentially. For 2018, focus on IoT, APIs and artificial intelligence (AI).
  3. The Industrialized Digital Platform includes the IT systems to run, customer experience to engage, things to sense, intelligence to decide, and the ecosystem foundation to Interact.

These three scale accelerators will speed CIOs through the trough to create value at scale.

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