Why Canadian CIOs Need to Invest in Digital

CIOs in Canada have an opportunity to capitalize on digital momentum in the midst of a strong economy.

Canadian CIOs are underinvesting in disruptive technologies, opting instead to focus on business-as-usual initiatives. This, combined with relatively low budget growth, is hampering Canadian CIOs and their organizations — especially when compared to their international counterparts.

As a result, they are underinvested in some of the most transformative technologies — technologies that are needed to capitalize on today’s digital momentum.

We asked Chris Howard, vice president and distinguished analyst at Gartner, to explain why so many Canadian CIOs are not further along the digital journey and what they can do to move their organizations forward.

What do Canadian IT budgets say about CIO spending for 2018?

Although budget growth is essentially flat for Canada (1% public sector and 1.3% private sector), the numbers show that CIOs are hesitant when it comes to spending and investing in digital. This is due in large part to economic uncertainty regarding geopolitical agreements. We don’t expect this to change throughout the year as economic anxiety continues. Despite their hesitancy, these CIOs need to move forward, rebalance and invest in transformation rather than investing in traditional legacy processes.

CIOs need to strongly reconsider their investments in disruptive technologies because this area is dangerously underinvested

How does the current priority list of Canadian CIOs compare to their global counterparts?

It’s not dissimilar. They are looking for growth, consistency, research and development, and a more intimate relationship with the customer. Where there is a difference, and this has been true for a few years, Canadian CIOs are still highly focused on legacy modernization, more so than their counterparts in other parts of the world. They are very focused on ERP and CRM and continue to invest in both, leaving digital disruptors and other areas underinvested.

Given the importance of digital business, how ready are Canadian organizations to make the leap?

Despite hesitations, Canadian CIOs are likely more ready than they think. Although they typically wait for a technology to become proven before investing, many of the newer technologies currently available are mature enough for real use cases. However, Canadian CIOs must first rid themselves of an investment bias that favors “business as usual” technology priorities, such as CRM, ERP, infrastructure and data centers. If they don’t, their organizations will be underinvested in the most transformative technologies. 

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Why are Canadian CIOs not investing in growth areas?

Because they have been reluctant to adjust their business models. They have, so far, chosen to grow their businesses using existing structures that optimize their current environment. But to achieve the exponential growth desired, Canadian CIOs must embrace and adopt digital transformation. That requires critical changes to both business and operating models. This is not to say that CIOs in other countries aren’t experiencing the same challenges; however, in Canada, it’s more pronounced.

What should Canadian CIOs do now to effect change?

CIOs need to strongly reconsider their investments in disruptive technologies because this area is dangerously underinvested. Whether it’s the Internet of Things (IoT), artificial intelligence (AI) or 3D printing, there are real use cases that CIOs can leverage to demonstrate true value.

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Gartner clients can read more in the 2018 CIO Agenda: A Canada Perspective by Chris Howard.

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