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The CIO and Business Transformation: Building a New Foundation

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62%

54%

40% New business models CEOs are looking to create innovative new business models

digital transformation Digital business ambition is transformation

Digital Transformation

Have a management initiative or

transformation program to make the

organization more digital

Creating Digital Business Models is a Priority for CEOs

Source: 2018 CEO Survey


What’s possible? How can we get there?

Uncertainty / Patterns / Insights Clarity / Focus

Execution

CIOs Must Adapt to Different Stages in the Strategy Cycle

strategy

What are the initiatives?

Internal management consulting Following the process


CIOs must support

business model

design


APAC CIOs

report business

model change 47%


Banking Retail Music

Transport Supply Chain Hotels


+ = Success

Technology Business Model

A simple formula…


CIOs Must Build ‘Business Model Design’ capability


Driven by Consumer Demands

40% APAC CIOs report

evolving consumer

demands are driving

their business

model change


Innovation doesn’t

just happen, you

need a clear

process


Keeping Innovation Happening: The STREET Process

Innovation

Candidates

Set Bold,

Mission-Oriented Goals

Keep the Funnel

Moving

Emphasize

Hypotheses and

Learnings

Remove Systematic

Obstacles

Transfer Evaluate Track

Scope Evangelize

Rank

Innovation

Trigger

Peak of

Inflated

Expectations

Trough of

Disillusionment Slope of Enlightenment

Plateau

of

Produc

tivity

time

expectations


Use iterative, experimental approaches


APIs AI

34% Data

Analytics

26% IoT

12%

RPA

Information

Technology

Cybersecurity

ERP

Business

Intelligence

Autonomous

Vehicles

2%

1%

2%

Cloud

11%

1%

1%

2%

Game-Changer Technologies

Q. Which technology area do you expect will be a game changer for your organization? Base: APAC respondents, excluding “prefer not to answer,” n = 592

2%

1%

Immersive

Experience

Percentage of APAC Respondents


Many CEOs Are Enthusiastic About “Artificial Intelligence”

“The focus for us is going to be innovating

at light speed on the tech front.”

“The tech for real estate led by AI isn’t

here today. I fully expect it’s going to be

here in 2021.”

Mark Rose,

CEO

“We have also begun exploring the role

of artificial intelligence to robotics in our

business, all with an aim to take friction

out of the customer experience, make it

easier in our stores and maintain our

cost efficiency,”

Brian Hannasch,

President and CEO


Gartner 2018

AI-Driven Development

By 2022

At least 40% of new

application development

projects will have artificial

intelligence co-developers

on their team.

3


0%

20%

40%

60%

Products andservices

Marketing, salesand customer

experience

Production orservices delivery

operations

Supply chain Management, riskmgmt. and admin.

AI

Cloud/API Platform

IoT

Blockchain

3D Printing

None of These

Base: All respondents, n = 460

Q. Which of the five technologies will have a material impact on each business areas?

How Can You Creatively Apply the Most Powerful New Technologies for Material Impact? A “material” level of business value is above the threshold where the CEO might choose to mention it

publicly, when discussing what contributes to the company’s results or future prospects.


Collaborative cross

functional teams

will be needed


APAC Respondents

Have Implemented

Product-Centric Delivery 55%


Product-centric delivery organizes development work into longer-lived, ideate-build-run teams working on a persistent business issue


Closer engagementbetween

IT and business

More consumer-centricculture in IT

Accelerated delivery ofnew features

Higher quality of newfeatures

Ability to develop andrelease

more innovative solutions

Improved consumerengagement

Learning how to operate inproduct-centric delivery

model

Easier handling ofdemands

from partners

Lower cost of new featuresdelivery

Easier compliance withprocurement regulations

and policy

TRAILING (n = 75)

TYPICAL (n = 1,086)

TOP (n = 159)

Benefits of Product-Centric Delivery

Q. To what extent is your organization realizing these benefits from product-centric delivery; Base: Organization’s IT department using product-centric delivery,

“n” varies by segment

Extent of Realization

of Benefits Mean

Score on a scale

of 1 to 7

Closer engagement

between IT and business

More consumer-centric

culture in IT

Accelerated delivery

of new features

Higher quality

of new features

Ability to develop

and release more

innovative solutions Improved consumer

engagement

Learning how to operate in

product-centric delivery model

Easier handling of

demands from partners

Lower cost of new

features delivery

Easier compliance

with procurement

regulations and policy

APAC (n = 273)

7

6

5

4

3

2

1

0


Invest

in DevOps

36%

New

architecture

and tools

40%

Rationalized/

Optimized

systems

40%

Project Product

Invest

in IT culture

change

46%

Phased

introduction

43%

Acquired

new skills

41%

How to Implement Product-Centric Delivery

Q. Which techniques did your organization adopt to facilitate its adoption of product-centric delivery? Base: APAC respondent and Organization’s IT department using product-centric delivery.

Excluding Not sure. n = 268. Showing top six most common responses

Percentage of APAC Respondents


BEHAVIORAL

Strategic thinking

Conceptual thinking

Coaching, delegating and developing

Results orientation

Leading, inspiring and building trust

Influencing and persuading

Collaboration / teamwork

Resolving conflicts and problems

Adaptability

Creative and Innovative Thinking

Openness to learning

Risk taking

Decisiveness

Accountability

Communicating, listening and

information gathering

Break the box thinking

Creative solution building

BUSINESS & INFORMATION

Understanding business organization,

politics and culture

Understanding the business ecosystem

Business Model Innovation

Understanding global/local business

differentiation

Knowledge of customer behaviors,

needs, and expectations

Broad network of business relationships

Business Acumen

Leading business change

Digital business literacy

Expertise in the relationships,

dependencies, and flows of information

Knowledge of social and ecosystem

data

Knowledge of data from operational

technology

Understanding of how to access and use

open data and dark data

Revenue centric creativity

Social analysis

Tracking of emerging trends

Analogous industry assessment

Knowledge of data from the Internet of

Things

TECHNICAL

Understanding existing systems and

technology

Designing and developing solutions

Applying models, tools and methods

Integrating solutions

Designing modular architectures

Understanding digital and emerging

technologies

Applying 'lean start up' / Agile methods

Gamification

Extend Your Team Beyond Traditional IT Skills

business ecosystem

business model innovation

customer behaviors

digital business literacy

creative/innovative thinking

break-the-box thinking

digital trends

gamification

lean

analogous industry assessment

Internet of Things


Modernizing the

operating model


Business

capabilities

People Information Technology Business

Processes

Business model

Operating model


Digital

Transformation

42%

33%

33%

32%

30%

28%

26%

22%

20%

19%

19%

19%

19%

17%

14%

12%

10%

9%

3%

1%

9%

1%

2%

1%

2%

1%

3%

2%

1%

32%

3%

3%

15%

13%

5%

7%

13%

1%

Business intelligence or data analytics solution

Core system improvements/transformation

Artificial intelligence/machine learning

Cybersecurity/Information security

Digital business initiatives (including digital marketing)

Cloud services or solutions (SaaS, PaaS, etc.)

Customer/User experience

Mobile applications

Automation

Internet of Things

Infrastructure and data center

Technology integration

Customer relationship management solutions

Software development or upgrades (including licensing, maintenance and support)

Enterprise resource planning

E-commerce/Citizen portal/Website

Communications/Connectivity (including Wi-Fi and internet access)

Networking, voice and data communications

Industry-specific solution

Rebalance Your Technology Portfolio Toward Digital Transformation

Q. What are the technology areas where your organization will be spending the largest amount of new or additional funding in 2019? n = 665; Base: APAC respondents, Excludes don’t know

Q. What are the technology areas where your organization will be reducing funding by the highest amount in 2019 compared with 2018? n = 605; Base: APAC respondents, Excludes don’t know

Percent of APAC respondents increasing investment

Percentage of APAC respondents

decreasing investment


For information, please contact your Gartner representative.

Recommended Gartner Research

The 2019 CIO Agenda: Securing a New Foundation for Digital Business Andy Rowsell-Jones and Others (G00366991)

2019 CIO Agenda: Industry Insights Overview Jan-Martin Lowendahl and Others (G00373551)

2018 CEO Survey: CIOs Should Guide Business Leaders Toward Deep-Discipline Digital Business Mark Raskino (G00354611)

How to Scale Innovation Beyond Pretty Prototypes Mary Mesaglio, Kristin Moyer, Darren Topham (G00354194)

Why Business Models Matter for CIOs Irving Tyler, Dale Kutnick and Chet Geschickter (G00335979)

A Guidance Framework for Continuous Integration: The Continuous Delivery 'Heartbeat' Bill Holz, Sean Kenefick (G00327436)

From Projects to Products — Three Essential Actions for Every CIO Aiming to Transform Their Digital Organizations Lars Van Dam, Dale Kutnick, Erik Van Ommeren (G00331446)

An Artificial Intelligence Reality Check for CIOs Jamie Popkin, Leigh McMullen (G00361599)

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