Skip to main content

How to Drive Value Creation from Digital Business

Across the globe, many forward-thinking CEOs and CFOs continue to fund business technology investments that enable meaningful and substantive digital transformations, ahead of their industry peer group.

That's why CIOs and other IT leaders must now accelerate the quest for value creation and drive digital growth from those ongoing investments, according to the latest market study by Gartner.

"The pressure on CIOs to deliver digital dividends is higher than ever," said Daniel Sanchez-Reina, VP Analyst at Gartner. "CEOs and boards anticipated that investments in digital assets, channels, and digital business capabilities would accelerate growth beyond what was previously possible."

Digital Business Market Development 

CIOs expect IT budgets to increase 5.1 percent on average in 2023 -- that's lower than the projected 6.5 percent global economy inflation rate.

A Gartner survey analysis revealed several ways in which CIOs can deliver "digital dividends" and demonstrate the financial impact of their strategic business technology investments.

Survey respondents say the top two objectives are to improve operational excellence (53 percent) and improve customer or citizen experience (45 percent). In comparison, only 27 percent cited growing revenue as a primary objective and 22 percent cited improving cost efficiency.

Meanwhile, the CIO's future business technology plans remain focused on optimization rather than growth. CIOs’ top areas of increased investment for 2023 include cyber and information security (66 percent), business intelligence or data analytics (55 percent), and cloud computing platforms (50 percent).

However, just 32 percent are increasing investment in artificial intelligence (AI) and 24 percent in hyper-automation.

The survey found that 95 percent of organizations struggle with developing a vision for digital business change, often due to competing expectations from different stakeholders.

According to the Gartner assessment, CIOs must reconcile siloed initiatives by using a visual metrics hierarchy to communicate and demonstrate interdependencies across related digital initiatives.

CIOs should also connect with functional and line of business leaders for each digital business initiative to understand what substantive improvement means, and how it can be measured.

Creating a picture that reflects the hierarchy of technical and business outcome metrics for each initiative will enable the chain of accountability that will collectively deliver the dividend in focus.

While strategic engagement with business unit leaders is necessary to accelerate digital business initiatives, the survey exposed an IT leader mindset of "go it alone" regarding solution delivery.

For example, 77 percent of CIOs said that IT employees are primarily providing innovation and collaboration tools, compared with 18 percent who said non-IT personnel are providing these tools.

Moreover, "fusion teams" that combine business process experts, business technologists, and IT technical staff, will catalyze a group that is focused on achieving key digital business outcomes.

However, many CIOs continue to struggle to attract, hire, and retain skilled IT talent to accelerate digital business initiatives. The survey identified sources of talent that are typically untapped.

For example, only 12 percent of enterprises use students -- through internships and relationships with schools -- to help develop technological capabilities and only 23 percent use skilled gig workers.

Why is this problematic? CIOs can be limited by policies related to "preferred providers". To counter this restriction, they must be able to engage all talent sources that can help accelerate the value realization of digital business dividends.

Outlook for Digital Business Investment Growth

"CIOs must prioritize digital initiatives with market-facing, growth impact," said Janelle Hill, VP analyst at Gartner. "For some CIOs, this means stepping out of their comfort zone of internal back-office automation to instead focus on the customer or constituent-facing initiatives."

That said, I believe the dependence on traditional IT organizations, and the staff they hire for digital business initiative delivery, reflects a legacy I&O mindset that can impede enterprise agility.

CIOs must embrace collaborative digital business development models to accelerate time to value creation. Proactively equipping and empowering business technologists is the path to progress. It's also the most effective way to gain CEO and CFO approval for ongoing digital business investment growth.

Popular posts from this blog

Digital Transformation Investment at $3.4 Trillion

Business technology leadership matters. Across the globe, more leaders have been pursuing bold Digital Transformation (DX) initiatives with the goal of creating new sources of business value through digital products, services, and experiences. As an additional benefit, the COVID-19 pandemic revealed that digital transformation efforts improve an organization's resilience against global market disruptions. Global DX investment is forecast to reach $3.4 trillion in 2026 with a five-year compound annual growth rate (CAGR) of 16.3 percent, according to the latest worldwide market study by International Data Corporation (IDC). Digital Transformation Market Development "Despite strong headwinds from global supply chain constraints, soaring inflation, political uncertainty, and an impending recession, investment in digital transformation is expected to remain robust," said Craig Simpson, senior research manager at IDC . The benefits of investing in DX technology -- including aut

Artificial Intelligence for National Border Security

National border protection agencies are under pressure to provide the highest level of security in the face of growing threats, such as increasing illegal migration and international terrorism. Now, government agencies are embracing advanced border security technologies to aid in effectively and reliably securing national borders. These solutions look to detect and identify potential threats and prevent them from escalating to a point that may jeopardize security. Security Surveillance Market Development Traditional border security patrols and Closed-circuit Television (CCTV) surveillance systems aren't adequate protection, and agencies must increasingly deploy new solutions to stay ahead of criminals and other potential threats to ensure the safety of a country’s borders. According to the latest market study by Juniper Research, the value of the border security technology market will exceed $70 billion globally in 2027 -- that's rising from $48 billion in 2022. Growing by 47 p

How to Apply Sustainability to Drive Value Creation

Global climate change policy initiatives have been an emerging topic for CEOs and their leadership teams, as they look to the future. Many organizations are preparing to play their part and help reduce carbon emissions. Eighty-seven percent of business leaders expect to increase their organization’s investment in sustainability over the next two years, according to the latest worldwide market study by Gartner. Customers are the stakeholder group creating pressure for these organizations to invest or act on sustainability issues -- selected by 80 percent of executives, followed by investors (60 percent) and regulators (55 percent). Sustainability Market Development "Sustainability enables businesses to cope with disruption," said Kristin Moyer, VP analyst at Gartner . "Economic uncertainty, geopolitical conflict and escalating materials and energy costs are forcing businesses to reexamine all forms of expenditure." According to Gartner, this focus on essentialism --