Agenda del CIO 2015
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This document contains confidential and proprietary information from Gartner's 2015 Annual CIO Survey. It summarizes the survey results including demographics of over 2,800 CIO respondents from 84 countries representing $12.1 trillion in revenues. It also discusses technology priorities, expected IT budget changes, and metrics used to evaluate investments. The document provides information to help CIOs in Latin America with their digital strategies and technology roadmaps.
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Agenda del CIO 2015
- 1. CONFIDENTIAL AND PROPRIETARY This presentation, including any supporting materials, is owned by Gartner, Inc. and/or its affiliates and is for the sole use of the intended Gartner audience or other intended recipients. This presentation may contain information that is confidential, proprietary or otherwise legally protected, and it may not be further copied, distributed or publicly displayed without the express written permission of Gartner, Inc. or its affiliates. © 2015 Gartner, Inc. and/or its affiliates. All rights reserved. B. Clavellina June 2015 Colombia Agenda del CIO 2015
- 2. CONFIDENTIAL AND PROPRIETARY © 2015 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner's Annual CIO Survey 1 2,810 Responses 7% Latin America 37% EMEA 20% APAC 36% North America Insurance 7% Healthcare 6% Manufacturing 23% Education 7% Retail 5% Transportation 4% Communications 2% Media 2% Services 9% Government 12% Banking 10% Utilities 3% Wholesale Trade 2% 2810 CIO respondents from 84 Countries, representing $12.1 trillion revenues, $397 billion of IT spend
- 3. CONFIDENTIAL AND PROPRIETARY © 2015 Gartner, Inc. and/or its affiliates. All rights reserved. The 2014 CIO Agenda Introduced The Third Era of Enterprise IT IT Craftsmanship IT Industrialization Digitalization ADOPT IDEATE ENGAGE CREATE OFFER MONETIZE We Were Here We Are Here Digital has moved to center stage
- 4. CONFIDENTIAL AND PROPRIETARY © 2015 Gartner, Inc. and/or its affiliates. All rights reserved. Digital Increasingly Has The Power To Determine The Winners 3 Social and holograms proved critical differentiators in the BJP/ Narendra Modi winning the Indian Election The connected car empowers Volvo address persistent societal problems A Digital platform helped Quicken Loans grow from $70bn in home loans in 2012, to $80bn in 2013 Advanced approaches to Analytics allowed the State Auditor of Massachussettes the insight to uncover tens of millions of potential value Digitalization has powered Crutchfield to flip its cash and space constraints to become advantages Digitalization allows Spring Airlines to be first successful low cost airline in China Applying thinking machines in wealth management promises competitive advantage Natura is embarking on a radical digitalization program to transform its ecosystem The internet of things and autonomous vehicles radically improve yields and effectiveness in mining
- 5. CONFIDENTIAL AND PROPRIETARY © 2015 Gartner, Inc. and/or its affiliates. All rights reserved. AS DIGITAL MOVES TO CENTER STAGE ?? CIOs are being given the opportunity to be Digital Leaders
- 6. CONFIDENTIAL AND PROPRIETARY © 2015 Gartner, Inc. and/or its affiliates. All rights reserved. Seizing the opportunity requires flipping Long-Held Behaviors and Beliefs Information and Technology Leadership People and Culture Leadership Value Leadership
- 7. CONFIDENTIAL AND PROPRIETARY © 2015 Gartner, Inc. and/or its affiliates. All rights reserved. Flipping /flɪpɪŋ/ Radically rethinking the fundamental beliefs and paradigms of a discipline to reflect new realities and opportunities
- 8. CONFIDENTIAL AND PROPRIETARY © 2015 Gartner, Inc. and/or its affiliates. All rights reserved. Flip Information and Technology Leadership 7 Information and Technology Leadership People and Culture Leadership Value Leadership
- 9. CONFIDENTIAL AND PROPRIETARY © 2015 Gartner, Inc. and/or its affiliates. All rights reserved. Flip Information and Technology Leadership 8 From Legacy first to Digital First From passive reporting to active search From the nexus to the next horizon
- 10. CONFIDENTIAL AND PROPRIETARY © 2015 Gartner, Inc. and/or its affiliates. All rights reserved. Top Technology Priorities for 2015 9 Top Technology Priorities 2015 All CIOs BI/ANALYTICS INFRASTRUCTURE & DATACENTER CLOUD ERP MOBILE DIGITALIZATION/DIGITAL MKTG SECURITY NETWORKING, VOICE AND DATA COMMS CRM INDUSTRY SPECIFIC APPLICATIONS LEGACY MODERNIZATION ENTERPRISE APPS Top Technology Priorities 2015 Continent= Latin America (including Mexico) INFRASTRUCTURE & DATACENTER BI/ANALYTICS ERP CLOUD MOBILE NETWORKING, VOICE AND DATA COMMS DIGITALIZATION/DIGITAL MKTG SECURITY APPDEV IT SERVICES/ AUTOMATION ENTERPRISE APPS CRM
- 11. CONFIDENTIAL AND PROPRIETARY © 2015 Gartner, Inc. and/or its affiliates. All rights reserved. Top Technology Priorities for 2015 10 Top Technology Priorities 2015 All CIOs BI/ANALYTICS INFRASTRUCTURE & DATACENTER CLOUD ERP MOBILE DIGITALIZATION/DIGITAL MKTG SECURITY NETWORKING, VOICE AND DATA COMMS CRM INDUSTRY SPECIFIC APPLICATIONS LEGACY MODERNIZATION ENTERPRISE APPS Top Technology Priorities 2015 Country= Colombia BI/ANALYTICS MOBILE CLOUD APPDEV BPM CRM ERP INFRASTRUCTURE & DATACENTER INTEGRATION NETWORKING, VOICE AND DATA COMMS OPERATIONAL TECHNOLOGIES/ INTERNET OF THINGS RISK MANAGEMENT
- 12. CONFIDENTIAL AND PROPRIETARY © 2015 Gartner, Inc. and/or its affiliates. All rights reserved. Top Technology Priorities 2015 Industry= Government INFRASTRUCTURE & DATACENTER BI/ANALYTICS CLOUD MOBILE NETWORKING, VOICE AND DATA COMMS SECURITY ERP LEGACY MODERNIZATION DIGITALIZATION/DIGITAL MKTG ENTERPRISE APPS INDUSTRY SPECIFIC APPLICATIONS IT SERVICES/ AUTOMATION Top Technology Priorities for 2015 11 Top Technology Priorities 2015 All CIOs BI/ANALYTICS INFRASTRUCTURE & DATACENTER CLOUD ERP MOBILE DIGITALIZATION/DIGITAL MKTG SECURITY NETWORKING, VOICE AND DATA COMMS CRM INDUSTRY SPECIFIC APPLICATIONS LEGACY MODERNIZATION ENTERPRISE APPS
- 13. CONFIDENTIAL AND PROPRIETARY © 2015 Gartner, Inc. and/or its affiliates. All rights reserved. Top Technology Priorities 2015 Group 2 INFRASTRUCTURE & DATACENTER NETWORKING, VOICE AND DATA COMMS BI/ANALYTICS ERP MOBILE LICENSING APPDEV ENTERPRISE APPS IT SERVICES/ AUTOMATION BPM CLOUD CRM Top Technology Priorities for 2015 12 Top Technology Priorities 2015 All CIOs BI/ANALYTICS INFRASTRUCTURE & DATACENTER CLOUD ERP MOBILE DIGITALIZATION/DIGITAL MKTG SECURITY NETWORKING, VOICE AND DATA COMMS CRM INDUSTRY SPECIFIC APPLICATIONS LEGACY MODERNIZATION ENTERPRISE APPS Industry = Goverment, Location = LATAM
- 14. CONFIDENTIAL AND PROPRIETARY © 2015 Gartner, Inc. and/or its affiliates. All rights reserved. Post-Nexus Technologies are Closer Than We Think 13 7% 2% 2% 3% 7% 13% 8% 9% 7% 5% 24% 14% 12% 9% 9% 28% 28% 25% 20% 16% Internet of Things Thinking Machines Augmented Human 3D Printing Robotics Approach to 'SMART' Technologies Not relevant right now On the radar, but no action planned In medium or long- term planning Actively experimenting Have already invested and deployed 2015 ACTION Get post- nexus on your radar
- 15. CONFIDENTIAL AND PROPRIETARY © 2015 Gartner, Inc. and/or its affiliates. All rights reserved. Flip Value Leadership 14 From efficiency to value creation From business case to business life cycle From the “hit and hope” to platform value
- 16. CONFIDENTIAL AND PROPRIETARY © 2015 Gartner, Inc. and/or its affiliates. All rights reserved. Expected Changes in IT Budgets from 2014 to 2015 15 45% 25% 30% 45% 25% 0% 46% 39% 16% Increasing Flat Decreasing All CIOs Group weighted average: 1% 43% 43% 14% Increasing Flat Decreasing Continent= Latin America (including Mexico) Group weighted average: 0.4%
- 17. CONFIDENTIAL AND PROPRIETARY © 2015 Gartner, Inc. and/or its affiliates. All rights reserved. Expected Changes in IT Budgets from 2014 to 2015 16 45% 25% 30% 45% 25% 0% 46% 39% 16% Increasing Flat Decreasing All CIOs Group weighted average: 1% 17% 67% 17% Increasing Flat Decreasing Country= Colombia Group weighted average: 0.8%
- 18. CONFIDENTIAL AND PROPRIETARY © 2015 Gartner, Inc. and/or its affiliates. All rights reserved. Expected Changes in IT Budgets from 2014 to 2015 17 45% 25% 30% 45% 25% 0% 46% 39% 16% Increasing Flat Decreasing All CIOs Group weighted average: 1% 37% 42% 22% Increasing Flat Decreasing Industry= Government Group weighted average: -0.2%
- 19. CONFIDENTIAL AND PROPRIETARY © 2015 Gartner, Inc. and/or its affiliates. All rights reserved. Expected Changes in IT Budgets from 2014 to 2015 18 45% 25% 30% 45% 25% 0% 46% 39% 16% Increasing Flat Decreasing All CIOs Group weighted average: 1% 56% 25% 19% Increasing Flat Decreasing Group 2 Group weighted average: 13.9% Industry = Goverment, Location = LATAM
- 20. CONFIDENTIAL AND PROPRIETARY © 2015 Gartner, Inc. and/or its affiliates. All rights reserved. Expose Three Types Of Investment 19 FEAR FACT FAITH Extending Within the Known Keeping the Business in Business Transforming Beyond the Known ROIRisk Cost Quality Experiments Platforms 2015 ACTION Strengthen Categories
- 21. CONFIDENTIAL AND PROPRIETARY © 2015 Gartner, Inc. and/or its affiliates. All rights reserved. Use of project value metrics 20 39% 68% 28% 23% 4% 71% 20% 35% 19% 20% 8% 25% 48% 15% 59% 61% 88% 15% Net present value Return on investment Internal rate of return Free cash flow Real option valuation Strategic Value Used to select and prioritize investments Monitored during execution and post-implementation Do not use All CIOs 45% 66% 33% 25% 8% 69% 19% 28% 19% 23% 12% 25% 46% 17% 54% 59% 82% 17% Net present value Return on investment Internal rate of return Free cash flow Real option valuation Strategic Value Used to select and prioritize investments Monitored during execution and post-implementation Do not use Continent= Latin America (including Mexico) 26% 65% 19% 14% 2% 75% 15% 34% 16% 15% 9% 27% 63% 19% 69% 76% 90% 11% Net present value Return on investment Internal rate of return Free cash flow Real option valuation Strategic Value Used to select and prioritize investments Monitored during execution and post-implementation Do not use Industry= Government
- 22. CONFIDENTIAL AND PROPRIETARY © 2015 Gartner, Inc. and/or its affiliates. All rights reserved. Move Metrics From Visible… 13% 19% 17% 18% 18% 32% 34% 54% 63% 77% 28% 39% 41% 44% 49% 41% 49% 37% 29% 20% Minimum failure rates IT morale Innovation ratio IT skills Non-financial value Financial value IT-related risk levels Internal customer… Service levels IT cost Use of IT Performance Metrics Major Metric Minor Metric
- 23. CONFIDENTIAL AND PROPRIETARY © 2015 Gartner, Inc. and/or its affiliates. All rights reserved. …To Valuable COSTIT REVENUES COSTIT REVENUES 2015 ACTION Invert Metrics
- 24. CONFIDENTIAL AND PROPRIETARY © 2015 Gartner, Inc. and/or its affiliates. All rights reserved. Flip Value Leadership 23 From “control first” to “vision first” From aligning with corporate culture to building a digital culture From IT Management to digital inspiration
- 25. CONFIDENTIAL AND PROPRIETARY © 2015 Gartner, Inc. and/or its affiliates. All rights reserved. Flip from “control-first” to “vision-first” Based on Dan Goleman’s Leadership Styles 65%reducing commanding style 44%increasing visionary style 22% Visionary 18% Democratic 17% Coaching 18% Pacesetting 15% Affiliative 12% Commanding
- 26. CONFIDENTIAL AND PROPRIETARY © 2015 Gartner, Inc. and/or its affiliates. All rights reserved. Techniques to Increase Digital Savvy of Enterprise 2015 ACTION Consider a Forcing Project 76% 66% 58% 51% 43% 31% Technology showcases Brown bag lunches (informal inter- departmental educational sessions) Digitally-savvy non-executives/ Outside directors Study tours Reverse mentoring Hackdays Use of Techniques To Increase Digital Savvy
- 27. CONFIDENTIAL AND PROPRIETARY © 2015 Gartner, Inc. and/or its affiliates. All rights reserved. ARE YOU? ?? AS DIGITAL MOVES TO CENTER STAGE
- 28. CONFIDENTIAL AND PROPRIETARY © 2015 Gartner, Inc. and/or its affiliates. All rights reserved. ¿Cuáles es su tema prioritario para el 2015? a) Inteligencia de negocios y analítica b) Infraestructura y Centros de Datos c) Servicios en la nube d) ERP e) Movilidad. Estrategia Móvil f) Digitalización g) Seguridad h) Redes de voz y datos i) CRM j) Aplicaciones específicas de su industria k) Modernización de sistemas legados l) Aplicaciones empresariales m) Seguridad n) Desarrollo de aplicaciones o) Automatización de servicios de IT p) BPM q) Integración r) Tecnología Operativa. Internet de las cosas s) Administración del riesgo #CioSummitCo
Editor's Notes
- Presentation Title
- Last year’s CIO Agenda, “Taming the Digital Dragon” (see Further Reading), explained how we were moving beyond IT craftsmanship (focusing on technology) and IT industrialization (focusing on process efficiency and effectiveness) into a third era of enterprise IT, where digitalization is transforming business models and determining who will win. The third era requires two modes of IT: traditional IT and a more agile, experimental IT. Things have moved on apace, and this year it is clear that the digital world and its ramifications have already moved from the shadows to center stage, creating winners and losers in all industries and geographies. Cloud, mobile, social and big data are already central to business thinking, and the next set of digital technologies, trends, opportunities and threats is creating yet another competitive frontier.
- This isn’t just a high-tech story, a U.S. story, a private-sector story, a large-company story or a startup story. These brief summaries of the nine case study enterprises show that digitalization is transforming all types of companies. More often than not, these transformations represent both massive opportunities and substantial challenges for the CIO and the IT organization. A great example of digitalization determining success is the BJP, a political party that won the recent general election in India. We interviewed Arvind Gupta, the party’s innovation evangelist and information and technology head. He shared how mobile, social networks, the Internet and holograms played a key role in mobilizing 10 million volunteers, engaging the biggest democracy in the world and ultimately electing the BJP’s candidate for prime minister. When asked why other parties didn’t exploit digital in the same way, Gupta talked about it being in the BJP’s DNA. Intriguingly, digitalization is not only a way to gain a competitive edge, but also provides a powerful ability to flip disadvantages into advantages. Crutchfield Corporation, a consumer electronics retailer, has flipped the space constraints of small retail stores into advantages by creating a technology-driven ability to select components and test them in a custom simulation of a car or house.
- The IT discipline within most enterprises has developed a set of behaviors and beliefs over many years, which present persistent issues that impede digital opportunities: • Legacy technology and associated mindsets have such momentum that most enterprises still think of innovation in terms of the technology paradigm. Digital leadership means flipping the approach from supporting the business with information technology, to starting with the digital world and what is possible — thinking cloud, mobile and highly contextual first — and then to considering “how do we get there from here?” using information and technology. • Value management and measurement is every business’s dirty little secret. Most enterprises and their CIOs disproportionately focus on what is easily measurable (e.g., IT cost), rather than what is most valuable or requiring the most attention (e.g., the value of building a digital capability). Moreover, a project’s value focus typically dies when a business case is approved, replaced by a task management game — another situation that absolutely has to flip. • Through both nature and nurture, CIOs have evolved into control-style pragmatic leaders. Given the characteristics of the digital era, this bias is dangerous. CIOs must invert their style to be more vision-led and inspirational. CIOs already know this. These problems aren’t new, but the prizes for solving them, and the dangers of ignoring them, are growing exponentially.
- As mentioned, the Nexus of Forces (mobile, social, cloud and information) is no longer the exotic — it is the place where all enterprises live. Digital has moved to center stage. But we must not view the nexus as the end of the journey. This is not the time to say, “We have a plan for cloud, we’re developing mobile capability, we’re stepping up our social and information game. We’re done.” The next set of digital technologies and trends is coming down the line much faster than we think. The chart shows the penetration of the five SMART technologies: sensor networks/the Internet of Things; maker machines such as 3D printing; augmentation of humans with devices or smart decision-making systems; robotics; and thinking machines (e.g., IBM’s Watson). (See “The Five SMART Technologies to Watch”.) A minority of enterprises are significantly investing in these leading-edge (or bleeding-edge) technologies — the position of the nexus forces only a couple of years ago. CIOs must ensure that their information and technology horizon doesn’t stop at the nexus. A continually updated view on which post-nexus technologies can add most value to the enterprise is a necessity — ideally informed by active experimentation.
- One of the biggest obstacles to value maximization is treating all IT-intensive investments the same — insisting that they share business case formats, metrics, hurdle rates, discount rates, etc. A minority (39%) of CIOs use separate categories of investment, despite the reality that there are different categories of investment and CIOs should manage them differently. Gartner has been talking about run/grow/ transform investments for many years. The figure adopts somewhat different categorizations: fear, fact and faith. A fear-based investment is made to make sure the business stays in business. It may be a regulatory requirement, an infrastructure upgrade or a security improvement. They should be looked at as a tax on the business. The best management systems for controlling fear-based investments are internal and external benchmarking, combined with measuring cost, quality and risk exposure. Fact-based investment entails an estimate of direct value impact in terms of cash flow, productivity etc. Introducing a new product, addressing a new geography and reducing business process cost are typical fact-based investments. Classic financial and productivity metrics and ratios, such as net present value (NPV) and ROI, work well for them. Faith-based investments are essentially bets by senior management. A realistic estimate of direct cash flow or productivity benefits may be difficult or impossible, e.g. establishing a social-listening capability. These investments are best managed by maintaining strong and vocal senior executive sponsorship, and ruthlessly controlling scope. In an uncertain digital world, faith-based investments are increasingly important.
- With 97% of 2015 CIO Survey respondents focusing on IT cost, it is by far the most common measure of IT performance. IT cost certainly cannot be ignored, but if it is the dominant metric, the message is to generate value from IT by reducing IT cost. Since IT cost is normally only a small percentage of revenue or of overall business costs, even a substantial reduction has very limited impact on the bottom line. Moreover, this is a game of diminishing returns — we can’t keep reducing IT cost forever.
- CIOs should therefore consider flipping IT cost from numerator to denominator. Flip the focus from reducing IT cost per dollar of revenue to increasing revenue per dollar of IT cost, which equals IT productivity. With this simple but powerful inversion that puts the focus on what a business is all about — productivity and profitability — there is no limit to value creation. When we think about the value that information and technology can generate in businesses — like the tens of millions of dollars in questionable transactions found through superior analytics at the Massachusetts Office of the State Auditor, the digital platform driving growth from $70 billion to $80 billion in loans at Quicken Loans, or the BJP prime ministerial candidate’s ability to participate in 2,000 rallies instead of 180 — the right-hand ratio in the figure above seems much more helpful than the lefthand ratio. Based on this IT productivity focus, we suggest that a CIO work with the CFO in building a tree of value drivers specific to the business.
- Digital leadership is almost always about creating the new and leading with speed, often in areas with a high degree of uncertainty and no well-trodden paths to follow. It also typically requires leading and inspiring — both inside and outside your area of control, and inside and outside the enterprise — while engaging with customers and influencing the business ecosystem. Command-and-control leadership doesn’t suit this digital world; in fact, it can be an obstacle. Vision and inspiration are typically the most powerful attributes of digital leaders. As the figure opposite illustrates, CIOs recognize this: 75% plan to change their leadership style over the next three years, most commonly by amplifying their vision (47%) while reducing their command and control (65%).
- CIOs and their enterprises can use techniques like the ones in chart to increase the digital savvy of the enterprise. Brazilian cosmetics company Natura uses “hackdays” (innovation marathons with internal and external participants), and Quicken Loans gives team members Monday afternoons to freely experiment. Select and deploy the techniques you feel will have the most impact in your enterprise. Dave Gledhill of DBS observes that the bank’s wealth management project, using IBM Watson, has intrinsic business value but also acts as a mechanism to force the staff to think less “transactionally” about what information and technology can do for the business.
- Digitalization is no longer a sideshow — it has moved to center stage and is changing the whole game. CIOs have a unique opportunity to take a strong digital leadership role in the transformation of their businesses. Seizing this opportunity requires flipping long-held behaviors and beliefs — from “legacy first” to “digital first” in information and technology leadership, from a focus on the visible to the genuinely valuable in value leadership, and from “control first” to “vision first” in people (and cultural) leadership. As our case studies show, the prize is new business models driven by innovative uses ofinformation and technology.