cio agenda 2015 - flipping into digital leadership

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Dave Aron

Graham P. Waller

Lee Weldon

Flipping to Digital Leadership: The 2015 CIO Agenda

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© 2014 Gartner, Inc. and/or its affiliates. All rights reserved.

Based on Gartner's Annual CIO Survey

1

2,810 CIO respondents from 84 countries, representing $12.1 trillion revenue, $397 billion of IT spend

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%

7%

Latin

America

37%

EMEA

20%

APAC

36%

North

America


Supplemented by 11 Case Study Interviews

2

BJP


The 2014 CIO Agenda Introduced the Third Era of Enterprise IT

IT Craftsmanship IT Industrialization Digitalization

ADOPT IDEATE

ENGAGE

CREATE

OFFER

MONETIZE

We Were

HereWe Are

Here

Digital has moved to center stage


Digital Increasingly Has the Power to Determine the Winners ...

4

Social and holograms proved

critical differentiators in the

BJP/Narendra Modi winning the

Indian election

The connected car empowers Volvo

to address persistent societal

problems

A Digital platform helped Quicken

Loans grow from $70 billion in

home loans in 2012, to $80 billion

in 2013

Advanced approaches to analytics

allowed the State Auditor of

Massachusetts the insight to

uncover tens of millions of dollars in

potential value

Digitalization has powered

Crutchfield to flip its cash and space

constraints to become advantages

Digitalization allows Spring Airlines

to be the 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


… and the Losers

The digital world is creating new types and levels of risk for our business.

Investment in risk management and risk management practices are not keeping up with new and higher levels of risk arising in a more digital world, creating greater exposure for our business/entity.

The agility to sense and respond to unknown and unexpected types of risk is increasing in importance relative to practices for prioritizing, managing and mitigating known and expected risks.

n = 1,377

89% Agree

69% Agree

83% Agree


As digital moves to center stage,

??

CIOs are given the opportunity to be digital leaders


CEO Reporting Reflects the Rise of the Digital Narrative


CIO's View CEO's View

CIO 47%

BU Leads 17%

CMO 11%

Others 25%

CIO 15%

BU Leads 9%

CMO 10%

Others 66% CIO

How Will Your CEO Distribute Relative Responsibility for Leading Digital Innovation and Change Over the Next Two Years?


Seizing the Opportunity Requires Flipping Long-Held Behaviors and Beliefs

Information and

Technology Leadership

People and Culture

LeadershipValue

Leadership


Flipping /flɪpɪŋ/Radically rethinking the fundamental beliefs and paradigms of a discipline to reflect new realities and opportunities


Flip Information and Technology Leadership

11

Information and

Technology LeadershipPeople and Culture

Leadership

Value

Leadership


Top Technology Spending Priorities —The Nexus Has Taken Up Residence

Source: Gartner 2015 CIO Survey, n = 2,793

1. BI/Analytics

2. Infrastructure and Data Center

3. Cloud

4. ERP

5. Mobile

6. Digitalization/Digital Marketing

7. Security

8. Networking, Voice and Data Communications

9. Customer Relationships

10. Industry-Specific Applications

11.Legacy Modernization

12.Enterprise Applications

41%

31%

27%

26%

24%

17%

13%

12%

11%

9%

7%

6%

50%

37%

32%

34%

36%

11%

11%

12%

8%

10%

7%

2%

Rank Technology 2015 2014

Percentage of CIOs identifying each as a top

three new spending priority


Cloud Is First for Some, an Option for Most

1st

OPTION EXCEPTION

NEVER OTHER

10%

46%

27%

15%

2%

16%

55%

20%

9%

1%

IaaS

SaaS

2015 ACTION

Build in a

"Why Not

Cloud" Step


Mobile Is the Rule, Not the Exception

1st 2nd

MINORITY

26%

36%

24%

14%12%

36% 37%

15%

Customer-facingEmployee-facing

2015 ACTION

Maximize

Context-

ualization


The Analytics Game Is Flipping

Backward-Looking Reporting

Passive Analysis of Data

Structured Information

Separate Analytics

Forward-Looking Predictive Analytics

Active Experimentation Informed by Data

New Types of Information, Including Social and Multimedia

Embedded Analytics

80%

80%

65%

62%

2015 ACTION

Exploit

Unstructured

Info

2015 ACTION

Run Data-Led

Experiments


Post-Nexus Technologies Are Closer Than We Think

16

7%2% 2% 3% 7%

13%

8% 9% 7%5%

24%

14% 12%9% 9%

28%

28%25%

20% 16%

Internet ofThings

ThinkingMachines

AugmentedHumans

3D Printing Robotics

Approach to "SMART" Technologies

Not relevant rightnow

On the radar, butno action planned

In medterm or long-term planning

2015 ACTION

Get Post-

Nexus on

Your Radar


Flip Value Leadership

18

Value

Leadership

Information and

Technology LeadershipPeople and Culture

Leadership


IT Budgets Are Mostly Flat

19

n = 2,711

0.4%

Latin

America

0.9%

EMEA

3.0%

APAC

0.8%

North

America

Global Weighted Average: 1.0%

79%Inside IT

21%


Planning Horizons — Appropriate for a Decade of Digital Disruption?

Now +1 +2 +3 +4 +5 +6

Years

Proportion of Planning Effort Allocated to Time Horizons

•••

51%

33%

13%

3%


Expose Three Types of Investment

21

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


Move Metrics From Visible …

13%

20%

17%

18%

18%

32%

34%

54%

63%

77%

26%

38%

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


… To Valuable

COSTIT

REVENUES

COSTIT

REVENUES

2015 ACTION

Invert

Metrics


Only 7% Are Strong at Reaping the Value

2%

5%

34%

45%

13%

Harvesting reviews, learning andmechanisms to capture unplanned benefit

are all mature

Sponsor recommits to benefits, we createa harvesting committee and schedule

harvesting reviews

We analyze the benefits realized, andconsider whether we have provided theplatform to harvest the benefits or not

We hold postimplementation reviews toreview on time, on budget, in scope and

informally discuss value

We do nothing beyond delivering thesolution/project output


Rebalance Benefits Realization

C

PLAN EXECUTE HARVEST

Optimize for

Strategically

Focused Value

Deliver the

Solution With

Value in Mind

Ensure the

Expected Value

Is Delivered

90% 10% 0%40% 20% 40%

2015 ACTION

Deploy

Value

Engineers


Address Faith-Based Investments

Avoid

Experiment

Scenario Planning

Real Option Valuation

2015 ACTION

Clarify

Platform

Approach


Flip People Leadership

27

People and Culture

LeadershipInformation and

Technology Leadership

Value

Leadership


75% of

respondents anticipatethey will need to change theirleadership style over next three years

Digital


Leading CIOs Spend a Day per Month More With the Top Team and Customers

29


A COO of IT Gives You Back One Day per Month

30


Flip 1: Leadership Style

are

64% of

CIOs

Pragmatic Leaders

Are


Flip From "Control First" to "Vision First"

Based on Dan Goleman's Leadership Styles

65%reducing

commandingstyle

47%increasing

visionary style

22%

Visionary

18% Democratic

17%

Coaching

16%

Pace Setting

15%

Affiliative

12% Commanding


Flip 2: Digital Cultural Revolution

When Doing Something New or Uncertain, Vision Is the Only Road Map,

Inspiration Is the Only Fuel


At Quicken Loans, Culture Drives Digital Success


What is your main role?

Leadership Flip 3


Techniques to Increase Digital Savvy of Enterprise

2015 ACTION

Consider a

Forcing

Project

30%

43%

51%

57%

66%

76%

0% 20% 40% 60% 80% 100%

Hackdays

Reverse Mentoring

Study Tours

Digital Nonexecutives

Brown-Bag Lunches

Tech Showcases


Flip 3: From IT Management to Digital Inspiration

1. Engender shared purpose in terms of digitalization

2. Stimulate the appetite of the enterprise for higher levels of digital

3. Inspire people to higher levels of performance, and attract great people


It's Not Time to Admire the Problem, It Is Time to Take Action

38

UNCONSCIOUS

INCOMPETENCE

CONSCIOUS

INCOMPETENCE

CONSCIOUS

COMPETENCE

UNCONSCIOUS

COMPETENCE

NOT RELEVANT

(FOR NOW)

Digital Accelerators

Information and Technology

T1. Governance of Simplification

T2. Cloud-First Mindset

T3. Mobile-First Mindset

T4. Context-Rich Design

T5. Unstructured Information

T6. Data-Led Experimentation

T7. Post-Nexus

Value and Risk

V1. Investment Categorization

V2. Inversion of Cost Metrics

V3. Deploy Value Engineers

V4. Valuing Faith Investments

V5. New Digital Risk Mgmt.

V6. Cost of Doing Nothing

Leadership

L1. COO of IT

L2. Visionary Style

L3. Culture-Changing Projects

L4. StudyTours/TechShowcases

L5. Digital-Savvy Nonexecutives

L6. Reverse Mentoring

L7. Hack Days

T1

Example Positioning

T3

T4

T5 T6 V1

V2

V3

V4

V5

L1

L2

L3

L4

L5 L6 L7

T7

V6

T2


Are You?

??

As Digital Moves to Center Stage,

cio agenda 2015 - flipping into digital leadership

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dave aron graham

dave aron vice president