Global Perspectives on Flipping to Digital Leadership: The 2015 CIO Agenda
Building on the 2015 Gartner CIO Survey, in this report we interpret and augment the advice from "Flipping to Digital Leadership: The 2015 CIO Agenda" for specific industry and geographic contexts.
The beginning of 2015 is showing high levels of uncertainty in the macroenvironment:
- Many national economies are in flux, stuck in or recovering from crises.
- There are a number of geopolitical dramas unfolding.
- Globalization continues to challenge and reshape the competitiveness of nations, industries and companies.
- Many industries are in transition, in terms of their products and services, industry boundaries, the structure of their ecosystems, and the nature of competition.
The only certainty seems to be the unstoppable advancement of digitalization. Government, companies, and our personal lives are being more deeply penetrated by digital capabilities, opportunities and threats. Industrial trends include servicization (the wrapping of information around physical products to create services and long-tailed relationships); personal trends include the quantified self (the ability for aspects of our personal life to be recorded and analyzed, including everything we eat and drink, our vital signs, our sleep patterns and moods, and our work patterns and communications). And governments and public-sector bodies are engaged in digital government and citizen engagement, smart cities and driving national digital competitiveness.
Digitalization represents massive opportunity and new and heightened levels of threat for all countries and companies. Consequently, CIOs are facing new, more challenging and more exciting circumstances as digital moves to center stage; this is revealed in our CIO survey results.
Gartner has been conducting a global CIO survey for more than 10 years, with the 2015 survey reaching 2,810 respondents in 84 countries, and representing a combined $12 trillion in public-sector budgets and private-sector revenue and nearly $400 billion in IT budgets. We used this survey to understand and recommend success behaviors for CIOs in 2015 and beyond in "Flipping to Digital Leadership: The 2015 CIO Agenda."
In the 2014 report, "Taming the Digital Dragon: The 2014 CIO Agenda," we established that CIOs were transitioning from a second era of industrialization to a third era of digitalization, highlighting the need to renovate the core, build bimodal capability and strengthen digital leadership, in addition to continually improving second-era industrialized IT. In 2015, we make the case that digital has moved to center stage, and CIOs need to flip their leadership behaviors in three areas (see Figure 1):
- Information and technology: from legacy first to digital first
- Value and risk: from what is visible to what is valuable
- People and culture: from control-based to vision-based leadership
Figure 1. Flipping Long-Held Behaviors and Beliefs
Source: Gartner (January 2015)
But the exact nature of the opportunities and threats, and the leadership behaviors needed to succeed, are increasingly diverse. A sporting goods company and a mining company both have long needed ERP, payroll and HR systems. But the digital capabilities needed for the sporting goods company to support digital fitness and healthcare for their consumers are radically different from those that the mining company needs to support intelligent drills and autonomous vehicles. Consequently, we see significant differences in budget changes by industry (see Figure 2). The chart below shows variances in expected changes in IT budgets from 2014 to 2015 for a selection of geographies (between -1% and +11.7%) and all high-level industries (from -2.7% to +7.3%), reflecting industry-specific factors such as overall economic health of the industry, regulatory requirements, and the digital opportunities and threats facing each industry.
Figure 2. IT Budget Change 2014-2015
Source: Gartner (January 2015)
Investment is required not only to seize digital opportunities, but also to address digital risks. Eighty-nine percent of CIOs believe that the digital world is bringing new and significantly higher levels of risk to our doorsteps. This is one figure that doesn't vary too much by geography or industry, with around 90% of almost every sector of the CIO community agreeing with this sentiment.
The evolution of digital leadership is highly variable. In the CIO survey, we asked CIOs to distribute 100 points among those in the C-suite, based on their understanding of how their CEOs are allocating digital leadership responsibility (see Figure 3).Globally, the average CIO believes they shoulder 47% of the responsibility. But the figure is quite a lot lower, at 33% in both China and Japan, whereas it is over 50% in the U.S. and Australia and New Zealand (ANZ), and 58% in Germany.
From an industry perspective, we see figures as low as 29% in the media industry, and as high as 59% in education and 61% in healthcare provision. Unsurprisingly, this seems to be correlated with the prevalence of chief digital officers – in geographies and industries where there are more chief digital officers, CIOs see themselves as having less of a digital leadership role. Note that we also asked a similar question in our CEO survey, and CEOs still saw the CIO as having the most digital leadership responsibility, but they saw the responsibility as much more distributed; more of a team game. This points to a need for CIOs to build a role as the orchestrator of digital leadership in the C-suite.
Figure 3. CIO Digital Leadership
Note that the percentages represent the proportion of digital leadership that CIOs believe their CEO is allocating to them; the rest is allocated to the CMO, CFO, COO, business unit leaders and others.
Source: Gartner (January 2015)
Leading CIOs are reacting to the digital opportunity and challenge by creating time and space for themselves personally. One approach they are using is to put a chief operating officer of IT (COO of IT) in place, who takes care of all aspects of running the IT organization day-to-day, including infrastructure, operations and development. (Note that the title of the role varies enormously. Some are called chief technology officer – but as noted in "The Many Flavors of the CTO Role," that title is used for a multitude of roles.)
Nearly half of CIOs have such a person in place today, but again deployment varies significantly across the globe (see Figure 4). Sixty percent of CIOs in Asia have a COO of IT, whereas only 34% of CIOs in North America do. And nearly 70% of communications industry CIOs have one, whereas in the wholesale trade less than 30% do.
Note that having a COO of IT on its own is not enough – CIOs then need to have the discipline to delegate, and the focus and style to influence, educate and learn with the C-suite, the board, and the external ecosystem.
Figure 4. COO of IT
Source: Gartner (January 2015)
In the technology domain, the proportion of CIOs who operate a "public cloud-first strategy" for IaaS and SaaS is 10% and 16%, respectively (see Figure 5). When we slice the data, we see that, while public cloud first is still a minority strategy everywhere, there are really significant differences. For example, in utilities the penetration is much lower at 4% and 9%, respectively, and similarly in banking the penetration is 5% and 10%, at least in part due to regulatory concerns. But in services industries, the figures are much higher at 30% and 18%, respectively. And in general, some less-developed economies appear to have more aggressive cloud strategies, possibly because they are a little less weighed down by legacy technology. For example, compare India and China with North America in the chart below. Overall, like other relatively new technology trends, attitudes about cloud are a function of business need for scalability and other forms of agility, legacy context, maturity of supply, and regulatory considerations.
Figure 5. Cloud First
Source: Gartner (January 2015)
All in all, the digitalization of the world is driving differences in how businesses are addressing the digital challenge, and how the CIO is positioned and operating. In this special report, we bring together the survey results for a diverse set of geographies and industries with the knowledge of analysts and the experiences of executive partners in Gartner Executive Programs, to provide insight and advice for CIOs working in those contexts. Table 1 lists the documents published in this special report. More geography- and industry-specific research notes will follow.
Table 1. 2015 CIO Agenda Special Report Research
| Perspective | Authors |
| Geographies | |
| Africa | Mbula Schoen, William L. Hahn |
| Asia/Pacific, including Japan | Andy Rowsell-Jones, Poh-Ling Lee |
| Australia and New Zealand | Andy Rowsell-Jones, Rob Heselev, Marcus Darbyshire, David Spaziani |
| Benelux | Ansgar Schulte, Geert Visker |
| Canada | Suzanne Adnams, Adam McCormac, John Rath-Wilson |
| China | Owen Chen, Tina T. Tang, Changhua Li |
| France | John Mahoney, Jean-Marc Lejeune |
| Germany | Frank Ridder, Alexander Hohnjec |
| Gulf Cooperation Council | Ed Gabrys, Simon Field, Biswajeet Mahapatra |
| India | Partha Iyengar, Heminder Singh Ahluwalia |
| Italy | Ansgar Schulte, Marco Delfino |
| Japan | Satoshi Yamanoi, Kazunari Konishi |
| Latin America | Alvaro Mello, Ione Coco |
| Malaysia | Andy Rowsell-Jones, Alan Goon, Poh-Ling Lee |
| Nordics | Tomas Nielsen, Jan Soderberg |
| South East Asia | Sid Deshpande, Poh-Ling Lee |
| Spain and Portugal | Mary Mesaglio, Jose Maria De Santiago |
| U.K. and Ireland | Lee Weldon, Duncan Chapman |
| United States | Leigh McMullen, Tomas Nielsen |
| Industries | |
| Banking/Investment | David Furlonger |
| Government | Rick Howard, Jim Hocker, Poh-Ling Lee |
| Higher Education | Jan-Martin Lowendahl, Terri-Lynn B. Thayer, Amos Auringer, Anna-Maria Nenna |
| Insurance | Kimberly Harris-Ferrante |
| Transportation | Venecia K. Liu, Thierry Kuperman Le Bihan |
| Utilities | Zarko Sumic, Chet Geschickter, CD Hobbs, Jean-Marc Lejeune |
Source: Gartner (January 2015)
This document and all the documents in this special report are primarily informed by the 2015 Gartner CIO Survey. This survey was conducted during June, July and August 2014, and received responses from 2,810 CIOs in 84 countries and all major industries, representing approximately $12.1 trillion in revenue/public-sector budgets and $397 billion in IT spending.
