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CIOs and digitalization

Date posted:  2/27/14 10:45:00 AM Most CIOs aren't prepared for cloud digitalization, a survey shows.

In a global survey of chief information officers, Gartner Executive Programs reported that most CIOs aren't prepared to deal with the digitalization - the process of converting information into a digital format - that is common practice for businesses running data in the cloud.

Gartner Executive Programs, a leading information technology, research and advisory company, calls digitalization the "third era of enterprise IT," with the first being automation of operations and the second era comprising the openness of IT.

The third era, however, is a bit harder to define, which is why some CIOs are dreading the upcoming digitalization trends.

The survey, which was conducted in the fourth quarter of 2013 and included 2,339 CIOs, revealed that 51 percent of CIOs are worried that the digital flood is coming faster than they can handle. Additionally, 42 percent of CIOs said they don't feel they possess the talent required to face digitalization in the future. 

The survey featured respondents from 77 countries, and the more than 2,300 CIOs involved account for more than $300 billion in CIO IT budgets, according to the report.

"2014 must be a year of significant change if CIOs are to help their businesses and public sector agencies remain relevant in an increasingly digital world," said Gartner Fellow and Vice President Dave Aron. "2014 will be a year of dual goals: responding to ongoing needs for efficiency and growth, but also shifting to exploit a fundamentally different digital paradigm. Ignoring either of these is not an option."

What CIOs are doing to respond
The majority of CIOs anticipate that more than half of their respective companies' businesses will be running on a public cloud in 2020, according to the survey. Approximately 25 percent of CIOs have already made major investments in the public cloud.

"If this transition succeeds and CIOs and their businesses 'tame the digital dragon,' massive new value for businesses can be created, and with it, a renewed role and greater credibility for the CIO and the IT organization," Aron said. "However, if the dragon isn't tamed, businesses might fail and the relevance of the IT organization will almost certainly disappear." 

A large majority of CIOs, 70 percent, plan to change their technology and sourcing relationships over the next few years. Many are hoping to partner with startups and other small companies, according to the report.

"The behaviors mastered in the second era of enterprise IT, like treating colleagues as customers, are potential hindrances to exploiting digitalization," Graham Waller, vice president and executive partner for Gartner Executive Programs, said in the report. "In 2014, CIOs must face the challenge of bridging the second and third eras. They have to build digital leadership and bimodal capability, while renovating the core of IT infrastructure and capability for the digital future." 

Designing your business to succeed
The Gartner report stated that the majority of businesses have established IT leadership, strategy and governance. Still, many have a gaping hole in digital leadership.

In order to harness the latest digital opportunities, Gartner implores businesses to make sure there is clear digital leadership, and that all executives take time to learn the digital aspects of the business.

Backing this, the survey showed that a CEO's digital savvy is one of the top projectors for IT and business performance. 

"IT spending, portfolio balance and the choice of technologies, talent, sourcing options, leadership, structure and governance must all be designed to make the business win," Aron said. "However, despite the need to grow, there is pressure on IT budgets."

Aron added that the survey showed most CIOs expect their IT budgets to remain flat in 2014. Without added money to throw around, it could become a problem for companies that need to modernize IT systems and utilize new technology.