building the digital platform: the 2016 cio agenda · of talent, structure, innovation and the role...
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Gartner Executive Programs
Building the Digital Platform: The 2016 CIO Agenda
2015 REPORT NO.9 — EXECUTIVE SUMMARY
About Gartner
Gartner, Inc. (NYSE: IT) is the world’s leading information technology research and advisory company. We deliver the technology-related insight necessary for our clients to make the right decisions, every day. From CIOs and senior IT leaders in corporations and government agencies, to business leaders in high-tech and telecom enterprises and professional services firms, to technology investors, we are the valuable partner to clients in approximately 10,000 distinct enterprises worldwide. Through the resources of Gartner Research, Gartner Executive Programs, Gartner Consulting and Gartner Events, we work with every client to research, analyze and interpret the business of IT within the context of their individual role. Founded in 1979, Gartner is headquartered in Stamford, Connecticut, USA, and has 7,100 associates, including more than 1,500 research analysts and consultants, and clients in 90 countries.
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Dave Aron Graham Waller Lee Weldon
ForewordFor every leading enterprise, digital business is moving from an
innovative trend to a core competency. Digital is different for
every enterprise and poses unique challenges for each in terms
of talent, structure, innovation and the role the CIO plays.
This report addresses the question: How should CIOs help build their enterprise’s digital platform?
“Building the Digital Platform: The 2016 CIO Agenda” was written by members of the CIO & executive leadership research group, led by Dave Aron (vice president and Gartner Fellow), assisted by Graham Waller (vice president) and Lee Weldon (managing vice president).
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AcknowledgmentsWe would like to thank the many organizations and individuals that generously contributed their insights and experiences to the research, including:
– The contributors to our interviews and case studies: Jeff Schreiner, Ardent Mills (U.S.); Jing Wang, Baidu (China); Claus Hagen Nielsen, COWI (Denmark); Bruno Cocchi and Cristina Cocchetto, Gruppo Coin (Italy); Chris Saul, Hitachi Consulting (U.K.); Kotaro Takada, Huis Ten Bosch (Japan); Rence Damming, Irene Vanderkrol and Dennis Groot, KPN (Netherlands); Tobias Hjärtsjö, LFV (Sweden); Alberto Campos, Localiza (Brazil); Paul Clarke, Ocado (U.K.); Kenneth Verlage, PostNord (Sweden); Tan Kah Chai, Sime Darby (Malaysia); and David Briskman, Whirlpool (Italy).
– Other Gartner colleagues: Peter Andersen, Marcus Blosch, Frank Buytendijk, Freud Carvalho, Youn Choi, Jeffrey Cole, Jan Eriksson, AJ Goldsmith, Alan Goon, Shannon Greene, Carina Hansen, Rob Heselev, Heather Keltz, Kathleen Kenny, Kazunari Konishi, Poh-Ling Lee, Changhua Li, Venecia Liu, Jack Mason, Jennifer Mitchell, Rika Narisawa, Else-Marie Ostling, Paul Proctor, Claudia Ramos, Guido Repaci, Alastair Tipple, Charlize Wang, Melissa Rossi Wood and Guang Zhao.
– Other members of the CIO & executive leadership research group: Suzanne Adnams, James Browning, Owen Chen, Ed Gabrys, Partha Iyengar, Jorge Lopez, Eiichi Matsubara, Alvaro Mello, Mary Mesaglio, Simon Mingay, Tomas Nielsen, Mark Raskino, Andrew Rowsell-Jones and Ansgar Schulte.
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Executive SummaryWe are now knee-deep in the era of digital business, with many
companies reimagining their business and operating models
based on digital capabilities. The 2016 Gartner CIO Agenda
Survey reveals that leading businesses must shift to platform
thinking in terms of their business models, delivery mechanisms,
talent and leadership, in order to survive and thrive.
As digital deepens, harness the power of platforms
The 2016 Gartner CIO Agenda Survey gathered data from 2,944 CIO respondents in 84 countries and all major industries, representing approximately $11 trillion in revenue/public-sector budgets and $250 billion in IT spending. For this report, we analyzed this data and supplemented it with interviews of 13 CIOs (or equivalents) who had insightful digital stories to tell.
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2,944 CIO respondents from 84 countries, representing $11 trillion in revenue/budgets and $250 billion in IT spending
Survey coverage based on 2,944 responses
36%North America
8%Latin America
19%APAC
37%EMEA Industry Percentage
Manufacturing/natural resources 21%Government 13%Services 11%Banking 10%Energy/utilities 8%Education 7%Insurance 7%Retail 6%Healthcare providers 5%Transportation 5%Communications 3%Wholesale trade 2%Media 2%
CIO Agenda Survey respondents by geography and industry
Digital business is increasingly prevalent. An exemplar case study in this report is Huis Ten Bosche’s Hen-na Hotel, the world’s first “robot hotel,” which opened in July 2015 with the aim of learning about, and ultimately pioneering, low-cost, low-environmental-impact hotels using robotics, alternative energy and other strategies.
As the implications of digitalization play out, it is becoming clearer that hardcoded business and operating models will not suffice. Leading economists have noted the increasing prevalence of platform business models, where multiple networks of stakeholders bring value to each other by exploiting network effects (positive feedback that increases value through more customers having and using a product or service). Technologists have long recognized the power of platform approaches to information and technology architecture. What is new is that platform dynamics are being applied to create value in all aspects of the business. This report focuses on the innovative approaches needed to succeed in delivery, talent and leadership in a digital business world.
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Leadership platform
Talent platform
Delivery platform
Technical platform
Focus of the 2016 CIO Agenda Survey and this report
– Platform businessmodels
– Two-sided business models
– Open business models
– Continual talentinnovation
– Drawing digital talent from beyond IT/enterprise boundaries
– Experimenting with more dynamic, opt-in structures and cultures
– Viewing vendors as digital inhibitors/accelerators
– Highly modular, open information and technology architectures
– Postmodern ERP– Cloud/XaaS (everything
as a service)
– Leadership as a team sport– Influence over control– Inspirational leadership– A culture of leadership– Ecosystem leadership
– Bimodal capability to explore and exploit
– Mode 2 to allow dynamic refactoring that hardens and scales
– Mode 2 experiments with smaller vendors
Business/value platform
Semiporous boundaries
Digital visionaries understand the power of platforms throughout their business
Create a bimodal business delivery platform
In “Taming the Digital Dragon: The 2014 CIO Agenda,” we suggested that it is essential to have two modes of IT, and ultimately of the entire business, to deal with both predictable and exploratory work. Two years later, the 2016 CIO survey suggests that the need to innovate is driving penetration and deepening of the bimodal construct. Bimodal captures the platform characteristic of continuously building and refactoring capabilities for the future.
Almost 40% of CIOs are on the bimodal journey, with the majority of the remainder planning to follow in the next three years. The evidence is that building a mature bimodal platform results in much better digital strategy performance.
Furthermore, the data suggests that one of the worst things a CIO can do is to delay bimodal. Those who are planning to move toward bimodal, but have not taken steps yet, came out worst in terms of digital strategy performance (see figure on page 8).
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At least 5 features
Crowdsourcing
Different metrics
Work with startups/SMBs
Formal innovation mgmt
Different funding
Have bimodal business now
Agile methodologies
Adaptive sourcing
Bimodal subcultures
Multidisciplinary teams
Mode 2 outside IT
Have bimodal IT now
Will never have bimodal IT
Note: Figure summarizes answers to the question, How effective is your business at factoring digital considerations into strategy and planning? for CIOs who answered positively to each bimodal characteristic (1 = very ineffective, 7 = very effective).
n = 948
Will have bimodal IT in 3 years
3.00 3.50 4.00 4.50 5.00
Bimodal disciplines lead to better digital performance
Evolve the talent platform
Since the majority of stakeholders recognize the issue of talent as the biggest barrier to success, talent must be treated as a platform, in terms of greater fluidity and semiporous boundaries. According to the 2016 survey, 66% of CIOs believe there is a talent crisis in the world (compared to 49% of CEOs who believe so), yet there is surprisingly little talent innovation. The key talent gaps shown in the figures opposite are not too different from the gaps revealed when CIOs answered a similar question four years ago.
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BI and data management
IT strategy and planning
Business process improvement
Security and risk management
Program and project management
Enterprise architecture
Business relationship management
Infrastructure and operations
Customer service (help desk)
Application development and management
Sourcing management
Vendor management
IT HR
IT finance
100%
Source: 2012 CIO Agenda Survey (question asked differently).
Percentage of respondents
Over-skilled Skills adequate Significant gap
Source: 2016 CIO Agenda Survey; n = 937, aggregate of top 3 talent gaps.
Talent gap
Information/analytics
Business knowledge/acumen
Security and risk
Digital
Project management
Software development
Architecture
Leadership
Attract/retain
Technical skills
#
1
2
3
4
5
6
7
8
9
10
Percentage of CIOs
40%
18%
17%
15%
13%
13%
12%
9%
8%
8%
The biggest talent gaps are in information and business knowledge
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It is time to think of talent as a platform and innovate with it. The key is to focus on the platform characteristic of semiporous boundaries. That is, CIOs must look at digital talent beyond the boundaries of the IT organization, and indeed beyond the boundaries of the enterprise. Innovative talent management opportunities abound — for example, “reversing into universities” (getting closer to universities by helping define and deliver university courses and projects, supporting internships, etc.), reverse mentoring, implementing job rotations, holding hackdays and building opt-in cultures. Baidu, the Chinese Internet giant, uses a highly innovative technique whereby the staff in a certain area chooses the manager, not the other way around (see the Baidu case study in the Appendix).
CIOs should also think of their partners as extensions of the talent pool, and consider to what degree each will be an inhibitor or an accelerator of the digital journey. The figure below suggests there are real differences.
Salesforce (n = 238)Amazon Web Services (n = 202)
ServiceNow (n = 72)Google (n = 177)
VMware (n = 271)Apple (n = 164)Huawei (n = 90)
Accenture (n = 235)Microsoft (n = 1,807)
Citrix (n = 75)Cisco (n = 798)Hitachi (n = 67)
SAP (n = 715)EMC (n = 298)
NetApp (n = 90)Telstra (n = 75)
Tata Consultancy Services (n = 98)IBM (n = 982)
Capgemini (n = 82)Fujitsu (n = 72)
Verizon (n = 119)HP (n = 850)Dell (n = 534)CDW (n = 83)
Lenovo (n = 167)Vodafone (n = 67)
AT&T (n = 213)Oracle (n = 1,049)
Infor (n = 72)BT (n = 84)
4.454.404.334.294.163.973.963.953.883.883.863.753.703.683.633.613.603.553.553.523.463.453.403.373.363.363.313.303.273.23
Q1: Please list the top 5 IT and IT-related vendors and service providers (including hardware, software, outsourcing and other services), in terms of the amount your business will spend with them this year, and up to 5 others that you consider important/ strategic for your enterprise now, or that will be in the next 3 years.
Q2: For each of these vendors, please indicate whether you view them as an inhibitor, neutral or an accelerator for your business’s digital needs today (1 = major inhibitor, 2 = minor inhibitor, 3 = neutral, 4 = minor accelerator, 5= major accelerator).
Length of colored segment indicates % of respondents who mentioned a vendor and gave it that rating. For example, of the 1,807 respondents who identified Microsoft as one of their vendors in Q1, 29% scored them 5 (major accelerator).
Chart shows results for the 30 vendors most frequently mentioned, ordered in terms of their average “digital acceleration score.”
Major inhibitor Minor inhibitor Neutral Minor accelerator Major accelerator
0% 40% 60% 80% 100%20%Avg.score
Choose partners that are digital accelerators: Summary of responses from survey respondents
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Build your leadership platform
CIOs are being given the opportunity to lead digital transformation, but they must adapt to build a powerful network of digital leadership that treats leadership as a team sport. The figure below shows that nearly 40% of CIOs are the leaders of digital transformation in their enterprise, and more than 30% are the innovation leaders.
Chief digital officer
n = 952
Innovation
Enterprise change
Shared services
E-commerce
Business strategy
Risk (CRO)
COO
HR
CFO
None
39%
CIO leadership roles
34%
22%
19%
18%
13%
9%
7%
2%
2%
30%
Many CIOs are leading digital transformation and innovation
Bear in mind, however, that the 2015 Gartner CEO Survey revealed that CEOs expect CIOs to be the “first among equals” in digital leadership. CIOs must therefore adapt their style to exploit platform effects in leadership, building a network of digital leadership inside and outside the enterprise.
In conclusion, not all businesses and government agencies are becoming platform businesses in terms of industry dynamics, either today or even in the near future. But the opportunities and threats mean that to remain competitive, all businesses need to understand and exploit platform effects throughout the business. If platform effects are not considered in any aspect of the business — such as leadership, talent or delivery — this represents a bottleneck in the enterprise’s ability to deliver; attract and retain talent; and to ultimately be perceived by customers as value-adding. CIOs must build a plan to evolve all five layers of their business’s platform.
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Gartner Executive Programs reports
“Trust and Resilience: The Future of Digital Business Risk,” 2015 No. 6, G00279638; Hunter, R., MacDorman, J. and Heiser, J.
“Flipping to Digital Leadership: The 2015 CIO Agenda,” 2014 No. 7, G00270826; Aron, D., Waller, G. and Weldon, L.
“Bimodal IT: How to Be Digitally Agile Without Making a Mess,” 2014 No. 5, G00268866; Mesaglio, M. and Mingay, S.
“Taming the Digital Dragon: The 2014 CIO Agenda,” 2014 No. 1, G00261080; Aron, D. and Waller, G.
Further Reading
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Core research
“Toolkit for IT Executives: Job Description for the COO of IT,” 23 September 2015, G00277753; Coleman, M., Aron, D. and Nielsen, T.
“What to Do If Your Digital Business Strategy Violates Culture, Ethics or the Law,” 16 July 2015, G00276440; Nielsen, T. et al.
“Hit the Bimodal IT Highway Now — Considerations for Structuring and Staffing,” 16 June 2015, G00276019; Berry, D., Mok, L. and Coleman, M.
“Kick-Start the Conversation on Digital Ethics,” 5 June 2015, G00278155; Buytendijk, F. and Moran, J.
“Digital Workplace Key Initiative Overview,” 22 April 2015, G00277654; Gotta, M. and Cain, M.
“A Bimodal Enterprise Needs Three Subcultures,” 9 January 2015, G00273134; Aron, D.
“Get Ready for Digital Business With the Digital Business Development Path,” 23 June 2014, G00263766; Lopez, J. et al.
Books
Nunno, T., “The Wolf in CIO’s Clothing: A Machiavellian Strategy for Successful IT Leadership,” Gartner e-book, 2013
Raskino, M. and Waller, G., “Digital to the Core: Remastering Leadership for Your Industry, Your Enterprise, and Yourself,” Brookline, MA: Bibliomotion, 2015
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