Zealand Perspective Analyst(s): Jenny Beresford, Brian ... · 2016 CIO Agenda: An Australia and New...

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2016 CIO Agenda: An Australia and NewZealand PerspectivePublished: 19 February 2016

Analyst(s): Jenny Beresford, Brian Ferreira, Rob Heselev

The Gartner 2016 CIO Survey shows business leaders are looking todigitalization to disrupt markets and gain competitive advantage. CIOs inAustralia and New Zealand can become digital leaders by creating digitalplatforms, strengthening leadership styles and developing the right talentand skills.

Key Findings■ Australia and New Zealand (ANZ) CIOs are deep into the era of digitalization, and getting

deeper.

■ Digital business looks more like platforms than like systems.

■ Digital business requires a bimodal delivery platform.

■ Big data and advanced business analytics, underpinned by cloud, offer opportunities formonetization.

■ While ANZ IT budgets remain static, expect the impact of digital to double by 2020.

■ Closing the talent and skills gap requires an innovative, inclusive and courageous approach.

■ Over half of ANZ CIOs are also the CDO, standing up as digital business leaders.

Recommendations■ Strengthen bimodal capabilities and invest more of IT budgets in innovation and digital

initiatives, to help your organizations take the lead in digital business.

■ Drive harder at eradicating technical debt, align the IT organization to the platform model andreview your delivery for digital-enabling capabilities.

■ Create a talent platform that encourages collaboration, creativity and innovation, within andoutside their organizations' boundaries.

■ Adapt to the pace of digital business, inspire innovation, and lead change by critically examiningand adjusting leadership styles and organizational cultures.

■ Continue to build stronger relationships within your organizations, and focus on increasing theirpower and influence to become "trusted allies" with your business peers.

Table of Contents

Survey Objective.................................................................................................................................... 3

Data Insights.......................................................................................................................................... 3

Introduction: An ANZ Context...........................................................................................................4

As Digital Deepens, Harness the Power of Platforms........................................................................ 4

Ready, Unsteady, Go: Digital Business Speeds Up..................................................................... 4

Where Are We Going? Digital Outcomes and Impacts in 2016..........................................................7

From Business as a System to Business as a Platform..................................................................... 8

The Opportunity Is to Monetize Big Data, Underpinned by the Cloud..............................................10

The Foundations: Build the Delivery Platform.................................................................................. 12

Create a Bimodal Delivery Platform...........................................................................................12

Bimodal IT Is Becoming Reality.................................................................................................13

Doing More With Less.................................................................................................................... 15

The Adaptive CIO: Evolve the Talent and Leadership Platforms.......................................................17

Develop Your Strengths and Preferences.................................................................................. 17

The CIO in Digital Business: Motive Plus Opportunity......................................................................19

What's Stopping You?.............................................................................................................. 20

Evolve the Talent Platform...............................................................................................................22

Be a Leader of Leaders: Trusted Allies and Partners....................................................................... 25

First, Disrupt Yourself: Take Courage........................................................................................ 26

Methodology.................................................................................................................................. 28

Gartner Recommended Reading.......................................................................................................... 29

List of Figures

Figure 1. CEO Digital Actions..................................................................................................................5

Figure 2. Private Sector Expected Growth of Digital Sales Revenue as Percentage of Total by 2020.......6

Figure 3. Public Sector Expected Proportional Impact of Digital on Business Processes by 2020........... 6

Figure 4. Top Three Expected Digital Outcomes and/or Impacts.............................................................8

Figure 5. Business as a System vs. Business as a Platform.................................................................... 9

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Figure 6. The Platform Business Model for IT........................................................................................10

Figure 7. ANZ Technology Priorities...................................................................................................... 11

Figure 8. CIOs Are Building Out Bimodal Platforms...............................................................................12

Figure 9. Bimodal Disciplines Lead to Better Digital Performance..........................................................14

Figure 10. Bimodal Platform Action Plan...............................................................................................15

Figure 11. 2016 IT Spend.....................................................................................................................16

Figure 12. What CIOs Love About Their Role........................................................................................17

Figure 13. What CIOs Dislike About Their Role..................................................................................... 18

Figure 14. CIOs Are Stepping Up to Lead Digital, Innovation and Change.............................................20

Figure 15. CIOs' Barriers to Success....................................................................................................21

Figure 16. Threats to Successful Change: Vision or Execution?............................................................ 22

Figure 17. Talent Platform Action Plan.................................................................................................. 24

Figure 18. CIOs' Relationships With CEOs............................................................................................25

Figure 19. CIOs' Investment in Personal Development..........................................................................27

Figure 20. Leadership Platform Action Plan.......................................................................................... 28

Survey ObjectiveThe purpose of the 2016 Gartner CIO Survey is to help CIOs and other IT leaders set and validatetheir management agendas for the coming year. To achieve this, the 2016 Gartner CIO Surveygathered data from 2,944 CIO respondents in 84 countries and across major industries,representing approximately $11 trillion in revenue and public-sector budgets and $250 billion in ITspending. Respondents came from a range of industries including manufacturing, government,professional services, banking, energy/utilities, education, insurance, retail, healthcare,transportation, communications and media.

Data InsightsThe Gartner 2016 CIO Survey is the largest annual survey of its kind. In this research, we look at theresponses we collected from ANZ CIOs, and examine those for information we think is relevantespecially for CIOs in ANZ, in addition to the observations and advice that can be found in theglobal overview: "Building the Digital Platform: The 2016 CIO Agenda."

The total number of responses collected is 175, comprising 155 from Australia and 20 from NewZealand CIOs. When analyzing the results, any response below 30 answers is considered too smallto be taken into account. We've aggregated these responses and compared them with globalresults.

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Introduction: An ANZ Context

We are now knee-deep in the era of digital business, with many enterprises reimagining theirbusiness and operating models based on digital capabilities. The 2016 Gartner CIO Survey revealsthat leading enterprises must shift to platform thinking in terms of their business and operatingmodels, delivery mechanisms, talent and leadership, in order to survive and thrive.

In 2016, Australian and New Zealand enterprises have advanced their view of digitalization fromsocial media, marketing channels and devices to opportunities for digital platforms and technology-led innovations to reinvent or create markets and fend off competitors. Disruptive technologies likesharing-economy platforms (for example, Uber, Airbnb and crowdfunding) are the "new normal"propelled by hyperfast global consumer adoption. Business leaders are calling for a clearer, simplerregulatory environment (for example, tax, workplace relations and "reducing red tape"), which willincrease pressure on governments and the public sector to use digital technologies to innovate boththeir internal and citizen-facing processes and systems.

Today, CEOs clearly appreciate the opportunities that digital can create and permeate. Whileaccepting a generally flat economic outlook in the region across 2016, after over a decade ofresource-sector-led growth, ANZ leaders are backing technology-led ingenuity. They accept that thedigital "service economy" is a reality and is accelerating. CEOs are talking about the need to"innovate at speed," "turn ideas into value" and "'commercialize IP." However, there is a propensity

for CEOs to see innovation as improvement rather than generating new ideas.1,2

ANZ CIOs are accommodating demand for both innovation and improvement, becoming "bimodal"as they adapt to the fast-changing digital landscape. The Gartner CIO Survey found that 65% ofCIOs in ANZ expect the two major impacts of digital in their enterprise in 2016 will be equally doingmore business through digital channels, and generating more revenue from better operations. Thetop technology investment initiatives ANZ CIOs are planning in 2016 are BI/analytics, cloud, mobile,and digitalization and digital marketing. However, IT budgets will be static in 2016, with a globalweighted average rise of just over 2%, and 3% in ANZ.

ANZ CIOs need to ready themselves to lead digital business change and growth. ANZ CIOs canbecome even stronger digital leaders in 2016 through developing a bimodal lens, simultaneouslyexploiting the IT core to deliver simple, safe, efficient foundations while exploring the new to enablemore rapid and nimble fulfilment of new products, digitized services and streamlined processes.

As Digital Deepens, Harness the Power of Platforms

Ready, Unsteady, Go: Digital Business Speeds Up

As digital business accelerates, ANZ CIOs should prepare the business and IT to both exploit andenhance existing technology foundations, and explore new ideas at an even faster pace. CIOsshould act as the prime movers to help their organizations sight, create and capture digitalopportunities.

Over the course of 2015, Gartner's CEO Survey found business leaders shifted their thinking aboutdigitalization and have commenced driving more digital discussions in their business (see "2015


CEO Survey: Committing to Digital"). See Figure 1 for the actions CEOs are taking to further theirdigital strategies in 2016.

Figure 1. CEO Digital Actions

Source: Gartner (February 2016)

The average CIO is expecting digital revenues to double in the next five years. Similarly, not-for-profit and public-sector CEOs are predicting digital processes to double. In ANZ, CIOs expect tosee digital revenues grow from 14% to 32% and digitization of business processes from 38% to79% in the next five years (see Figures 2 and 3).


Figure 2. Private Sector Expected Growth of Digital Sales Revenue as Percentage of Total by 2020


Figure 3. Public Sector Expected Proportional Impact of Digital on Business Processes by 2020



ANZ CIOs have been preparing the business and IT for this increasing pace of digital change.

In Australia, the carsales.com.au group of companies is an example of a successful multiyeartransformation, adapting to the fast pace of digital business, led by their CIO (who is also chiefproduct officer). Carsales.com.au is the largest and most successful vehicle sales portal in Australia.In the most recent financial year, it sold close to 10 million vehicles and earned AU$312 million inrevenue. Carsales.com has more than 25 portals, and operates in Brazil, South Korea, Thailand,Indonesia and Malaysia. Sixty-five percent of all traffic is from mobile devices, and the variousportals deliver some 3 billion online views, of vehicles for sale, per week (see "Going Beyond Agile— Embedding a Product Culture in the Development Organization").

Seven years ago, its IT organization was delivering around one to two production deployments perweek, and delivering projects on time and on budget. However, it was not agile enough to meet thedemands of an online business in a highly competitive marketplace. In 2015, carsales.com.au wasachieving 250 to 400 production releases per week. Its executive team considers culture to be atthe heart of the lessons learned at carsales.com.au. However, even more crucial than culture wasthe establishment of a set of overriding values based on trust and autonomy, to create a culture ofagility, ownership and responsiveness.

In "Building the Digital Platform: The 2016 CIO Agenda," we describe how digital business ismoving from an innovative trend to a core competency. Digital is different for every enterprise, andposes unique challenges for each in terms of talent, structure, innovation and the role the CIO plays.The ANZ CIO has the opportunity in 2016 to act on evidence of a doubling of digital impacts andoutcomes by 2020, to plan and drive changes that can harness the power of platforms to managetalent and delivery, and execute effective leadership.

This report can help you get started, with case studies, best practices and recommended actions inthree areas:

1. Create a mature bimodal business delivery platform to improve digital strategy performance.

2. Treat talent as a platform and innovating with it.

3. Play a key role in building a digital leadership network that treats leadership as a team sport.

Where Are We Going? Digital Outcomes and Impacts in 2016

In greater numbers than their global peers, 65% of ANZ CIOs expect digital in 2016 to create morebusiness through digital channels, ranking this as equally with the expected outcome of generatingmore revenues from better operations.

As Figure 4 indicates, creating new markets, changing the basis of competition and expanding tonew geographies are less frequently the main impacts of digital. For many enterprises, theseimpacts will occur as digital deepens.

The common image of digitalization is that it is mainly about engaging with the outside world. Yet,49% of ANZ CIOs list engaging and empowering employees as one of the top three impacts of


digital. CIOs must remember that the digital workplace creates real opportunities and imperativesfor competitive advantage. Enterprises cannot (and should not try to) do everything digital all atonce, but when considering what to focus on, they should not just look for digital opportunitiesoutside.

Figure 4. Top Three Expected Digital Outcomes and/or Impacts


While the meaning of digital revenues and processes is open to interpretation, it is clear that digitalbusiness is a reality now, and is a very significant driver of competitive advantage anddifferentiation. ANZ CIOs need to be both instigators and builders of digital impacts and outcomes.

See "MIT Sloan's George Westerman Talks About the CIO Digital Leadership Opportunity," in whichthe digital culture and innovation aspect of the CIO role are explored.

Recommendations:

We also recommend that ANZ CIOs:

■ Change your language to talk about delivering value, product development, and team velocity.

■ Continually review development and delivery processes for bottle necks and eradicate them.

■ Commit teams to shorter deployment cycle times, and realign the teams' metrics.

From Business as a System to Business as a Platform

In "Building the Digital Platform: The 2016 CIO Agenda," Gartner refers to the implications ofdigitalization and business model impacts. It is becoming clearer that hardcoded business andoperating models will not suffice in the digital era.


Businesses and government agencies are looking less like fixed "systems" and more like platforms.

A systems view of a business envisages it as having a very clear inside and outside, with suppliersproviding inputs, and internal people, assets and capabilities creating products and servicesthrough "step fixed" business processes — fixed in the short term but changeable over time atsignificant cost and risk — and delivering the products and services to customers.

A platform provides the business with a foundation where resources can come together —sometimes very quickly and temporarily, sometimes in a relatively fixed way — to create value.Some resources may be inside, permanently owned by the company; some will be shared; andsome can come from outside. The value largely comes from connecting the resources, and from thenetwork effects between them. Customers choose the value that they experience, and the businessmodel focuses equally on generating value and learning (see Figure 5).

Figure 5. Business as a System vs. Business as a Platform


Digital visionaries are building platform businesses. Platforms require different economic thinking,and are potentially very powerful, in that their network effects can create tremendous momentum,lending considerable value to first movers. Technical platforms are a view from the bottom; platformeconomics is a view from the top.

Platform concepts need to penetrate, and are penetrating, all aspects of the business (see Figure 6).Technologists have long understood the benefits of platforms for internal architectures (for example,buses, APIs, object orientation, modularity and reusability), as well as for technology products andservices. The challenge is to lift the benefits of this platform approach from technical elegance toreal business value.


Specifically, the CIO survey results reveal the need to exploit platform effects in managing talentand delivery, and in executing leadership.

Figure 6. The Platform Business Model for IT


Recommendations:

To move on enacting your platform model, we recommend that ANZ CIOs:

■ Commence a proactive and practical approach to deliver technical debt remediation andconsolidation program of work.

■ Educate your IT organization to see all new business demand through the eyes of the platformconcept.

■ List the design principles for your platform and use it as a compass in all your IT decisionmaking going forward.

■ Decide if your current vendor contracts need realignment to your platform design principles.

The Opportunity Is to Monetize Big Data, Underpinned by the Cloud

The top areas of new or discretionary technology investment in 2016 make it clear that significantspending and opportunity continues in big data and analytics, and along with momentum in cloud


(see Figure 7). The key to monetizing big data is to find and harvest real business value from theinsights.

Infrastructure and data center spending continues to be high on the list in ANZ. However, with 33%planning cloud initiatives, there is now clearly more emphasis on cloud. This seems to indicate thatANZ CIOs are leading the way in freeing up budgets and creating the flexibility for more digital focusby reducing their investment in internal infrastructure and data centers.

Figure 7. ANZ Technology Priorities


Though cloud may indeed bring cost savings, the Gartner position is that it is much more importantas the foundation for agility, flexibility and rapid scalability than it is for reducing costs. In addition,cost savings from consolidation and streamlining, including cloud initiatives, usually "disappear" inthe business' bottom line, without adding to the IT budget.


Recommendations:

We recommend that ANZ CIOs:

■ Revisit efforts on master data management (MDM) and data quality: MDM is a key buildingblock to raise the level of big data opportunities.

■ Explore internal and external data sources as a leadership team activity, seeking monetizationopportunities in big data.

■ Map extended product/service customer experiences beyond your data boundaries, which willhighlight ancillary big data opportunities.

■ Claim a modest percentage of any realized savings from cloud to fund the development ofMode 2 and Mode 2 initiatives.

The Foundations: Build the Delivery Platform

Create a Bimodal Delivery Platform

The need to innovate is driving penetration and deepening of the bimodal construct. Bimodalcaptures the platform characteristic of continuously building and refactoring capabilities for thefuture. In ANZ, CIOs are moving faster than their global peers are into a bimodal working model,with 72% either already doing it or planning to within three years (see Figure 8).

Figure 8. CIOs Are Building Out Bimodal Platforms

Numbers may not total 100% due to rounding.



We see a great opportunity for ANZ CIOs to take the lead in their organizations' bimodal journey.ANZ CIOs have the opportunity to invest in setting up and developing bimodal capabilities. Theycan help their organizations reap the benefits of digitalization sooner than the competition.

One-third of ANZ CIOs are still considering or plan to adopt bimodal, but may not be confidentabout where to start, what the organizational change impacts could be, or how to kick-start andgrow their bimodal capability.

There is also confusion about what bimodal is and what it is not. CIOs are struggling between twocompeting pressures: the pressure to provide stable, secure, high-performance services and todeliver agile, innovative, technology-intensive services quickly.

Bimodal IT provides a way to address both, yet many CIOs are unsure how to begin. With bimodalIT, CIOs can overcome this inertia, help their departments meet the digital challenge, and ultimatelybring the enterprise along (see "Bimodal IT: How to Be Digitally Agile Without Making a Mess").Finally, the seminal Gartner report "How to Achieve Enterprise Agility With a Bimodal Capability"describes the concepts and processes around bimodal delivery.

Bimodal IT Is Becoming Reality

As we enter an unquestionably digitally disruptive decade, bimodal seems to have captured theglobal business mood. A clear majority — 89% — of ANZ CIOs are using agile in some form in theirIT organization. This is 12% more than the average among their global peers.

Bimodal is misinterpreted by many as simply the introduction of agile tools and methodologies likeScrum. However, it is more than that; the defining characteristic of bimodal is having twodifferentiated approaches to IT (and ultimately the business): one suitable for more predictable work;the other for exploratory work. Each mode requires different subcultures, tools, approaches andmetrics (see Figure 9).


Figure 9. Bimodal Disciplines Lead to Better Digital Performance

*Sample size is less than 30; results are directional.


ANZ CIOs should assess the need for or maturity of bimodal in their IT organization, and plan toeffect change using a wide variety of bimodal disciplines — not just agile. Gartner is findingcorrelation between successful digital business outcomes and some of the lesser-used practices:crowdsourcing, working with startups or SMBs and formal innovation management (see "Buildingthe Digital Platform: The 2016 CIO Agenda").

Consider each of the items in Figure 10 to ensure that you have a thoughtful approach to buildingyour bimodal palette as you move into 2016.


Figure 10. Bimodal Platform Action Plan


Recommendations:

We recommend that CIOs:

■ Stop trying to formulate the best bimodal approach.

■ Agree on core principles, find low-risk opportunities and action bimodal.

■ Learn, adapt and grow your bimodal efforts.

■ Give business users access to digital "playpens," where possible, where they can explore anddiscover their own possibilities to make the business more effective.

Doing More With Less

In ANZ, IT budgets are largely static. Most ANZ CIO expect either no change or slight increases inANZ, where economic conditions are expected to initially worsen over 2016 (see Figure 11).


Figure 11. 2016 IT Spend


From the delivery field and supporting Australian and New Zealand clients with executivediscussions on budget allocations and investment decisions, it is evident that boards and CEOs arewilling to increase IT spend where there is a direct link to increased revenue and/or businessefficiencies that support higher profit margins.

ANZ CIOs should continue to invest in more efficient, cost-neutral Mode 1 foundations. Renovate,divest, use a range of vendor partners and improve IT back-office efficiencies from finance throughto governance processes.

ANZ CIOs, through their own budgets, are trying to show a "silver lining" that consolidation projects(infrastructure and applications) will harvest savings. Cloud, ERP modernization andcommunications consolidations are seen as best cost-savings opportunities. Many of our clients aretaking a closer look at contract renewals in these areas and investigating midterm contract levers.

Most of our ANZ clients have commenced infrastructure consolidations for noncore systems. Someof our clients are exploring the cost base of ERPaaS versus on-premises solutions. Appsconsolidation projects are starting slowly with the realization that it is much more difficult thaninfrastructure consolidation projects.


The Adaptive CIO: Evolve the Talent and Leadership Platforms

Develop Your Strengths and Preferences

Many ANZ CIOs see themselves as change agents and are enjoying the challenge of impactingbusiness outcomes, even more than their global peers (see Figure 12).

Figure 12. What CIOs Love About Their Role


Intriguingly, ANZ CIOs dislike the complications of personnel management but value engagement/diversity. This paradox illustrates the leadership challenge in the digital age. Digital organizations donot value the traditional hierarchies of the past. The postindustrial world is testing the limits of thetraditional work organization (see Figure 13).


Figure 13. What CIOs Dislike About Their Role


The CIO role is constantly evolving. As digital pervades all aspects of the business model, productsand services, operations and workplace, the CIO cannot be thought of as a functional role. Rather,digital leadership must be thought of as collaborative leadership — a team sport. The 2015 GartnerCEO Survey highlighted that most CEOs see their CIO as having the most digital leadershipresponsibility, but sharing this responsibility across the C-level (see "2015 CEO Survey: Committingto Digital").

The advice here is not new: Free up time through delegation and more aggressive prioritization, anduse that time to influence and increase enterprise digital savvy, and build stakeholder power. Thismeans stepping up to digital business leadership, bringing your business peers and the IT team withyou. Contemporary CIOs are required to build high-performing teams because it's just not possibleto have personal control of everything. Gartner suggests that self-managed clusters may betterrepresent the future workforce (see "Maverick* Research: The Future of Talent; Stop Hiring People,Start Hiring Clusters").


Recommendations:

In addition, we recommend that ANZ CIOs:

■ Be more active with building your stakeholder maps and be more aware of the network youneed to operate in to matter for the business;

■ Revisit your peer engagement principles and validate if they are still supporting productiverelationships; and,

■ Grow your supporting networks to help you deliver beyond your functional boundaries in a moreintegrated and connected world.

The CIO in Digital Business: Motive Plus Opportunity

One thing that has not and will not change is that leadership is critical for all business success. ITand digital business are no different in that respect. Having strong and clear leadership as the ITand digital business worlds evolve continues to be critical.

As seen in Figure 14, 52% of ANZ CIOs say they are stepping up and taking the digitaltransformation leadership role, and 40% say they are taking on innovation leadership; both numbersare higher than the global percentage (39% and 34% respectively).

If we think about the need to harness platform effects, this makes complete sense. Since the digitalneed is not limited to business models at the top end, or to a technical core, the CIO is well-positioned to lead the strategy and execution of a platform-based digital transformation.


Figure 14. CIOs Are Stepping Up to Lead Digital, Innovation and Change


To learn more about what digital business really means, look to Gartner's "Business Moments"series. These documents describe how the Internet of Things can create new opportunities tooperate quite differently. Gartner analysts provide a framework, guidelines and examples that canhelp the CIO steer organizations through the process of collaborative thinking and preparation toharness business moments for digital business success (see "Toolkit: Use Business Moments toIdentify Hidden Value Opportunities for Your Enterprise").

What's Stopping You?

Execution of change is a challenge for ANZ CIOs, which has the potential to derail aspirations for afast-paced, agile, delivery culture. As they consider their barriers to success in 2016, 19% of ANZCIOs regard the inertial resistance of organizations to change ranks equally with funding and budgetconstraints (see Figure 15). This means ANZ CIOs need to do more with less, and work smarter notharder to lead and influence change.


http://www.gartner.com/search/all/simple?typeaheadTermType=&typeaheadTermId=&searchType=21&keywords=%22Business Moment%22&qid=e63507587ee4bf7e83156eec01eabbc1

Figure 15. CIOs' Barriers to Success

*Sample size is less than 30; results are directional. This question was asked only of respondents who completed the survey during Phase1 of fieldwork. This is why the sample is small.


In addition, 73% of ANZ CIOs see the organization's ability to execute change as a higher risk thanthe ability to 'envisage' change. This is 10% greater than the global average, and echoes the ANZview that organizational capacity and willingness to change is one of their highest barriers tosuccess (see Figure 16).


Figure 16. Threats to Successful Change: Vision or Execution?


While budget constraints are transactional, operational barriers, the next four top ranking areaswhere CIOs see barriers are cultural. Global peers rank lack of the right skills and talents as theirmain barrier to achieving their goals. It is interesting that ANZ CIOs do not see this as their biggestissue. So if budget could be attained with the right focus on value and business cases, and skillsare available, then CIOs need to take on the hurdle of culture, structure and alignment — whichtakes a business leader.

Successful CIOs play a leadership role in cultural change, and use culture to drive the frameworksof business transformation (see "Driving Business Transformation by Changing the Culture").

CIOs need to develop their digital platform by empowering and engaging employees who reallyknow their lines of business, and are curious and open to change. In other words, get peoplethinking (and behaving) differently. This is the role of CIO as cultural catalyst. Thus, the metric of themodern CIO should be: "How well have I changed the culture of my department or my enterprise?"

We propose CIOs should start small. Begin by ritualizing meetings and other interaction types, thenformalize a humanist approach to incident management, introduce more collaboration and, alongthe way, continue to work on communication styles (see "Culture Change Is Easier Than YouThink").

Evolve the Talent Platform

As the data seen earlier in Figure 15 shows, talent has now been recognized as the single biggestissue standing in the way of global CIOs achieving their objectives. Globally, 22% of CIOs ranked


skills as their biggest barrier to achieving success. Moreover, the next highest ranked issue, culture,is strongly connected to it.

When we think of all the mammoth tasks and challenges that IT organizations are facing —digitalization in general, funding issues, benefits realization capabilities, the advent of the cloud, etc.— the emergence of talent as the top barrier to success should be a wake-up call for CIOs.

Whether we use the word skills, capabilities or talent, having enough people well equipped toexecute on the IT, and now the digital, needs of businesses and public-sector agencies, has alwaysbeen an issue. It arises from the continually changing technology landscape, the things done withinformation and technology, and how enterprises have organized information and technologyresources.

There will always be more and better talent outside your own internal talent pool than inside —especially in the current high-speed, highly disruptive waves of digital innovation. So, instead ofthinking of talent as a strictly internal asset, CIOs must think about talent as a platform withsemiporous boundaries — where internal and external talent meet and collaborate and multiply theirpotential. A greater emphasis is needed on strategies like rotating staff from outside the ITorganization, working much more closely with universities (on internships, co-designed courses,etc.), crowdsourcing and considering customers, citizens, vendors and partners as extensions ofthe talent platform.

Use Figure 17 to develop your talent management action plan for 2016. You don't have to doeverything; indeed, you probably can't. Focus is more important. The critical thing is to have a planand stick to it, moving your talent story forward.


Figure 17. Talent Platform Action Plan


ANZ CIOs have the opportunity to tap into great talent, but they do need the courage anddetermination to critically examine their own leadership styles; their organization's cultural attitudestoward change, risk, exploration, experimentation and innovation; and their organization's attitudetoward IT and creative talent in general.

Actively explore how you are building your talent pool for digital business. "Creating Your DigitalEdge Through a Competency-Based Talent System" will help you explore how to go about thisactivity. It explores how to:

■ Shift culture and mindset.

■ Define competencies that enable mindset and behavior change.

■ Develop a competency based talent system that delivers a competitive edge.


Be a Leader of Leaders: Trusted Allies and Partners

ANZ CIOs are strengthening their power and influence in the organization. ANZ CIOs report that47% are in a partnering position to the CEO, however 29% have moved beyond partnering tobecome trusted allies, while 22% are still in the relative danger zone of the transactional relationshipwith the CEO (see Figure 18).

Figure 18. CIOs' Relationships With CEOs


Transactional CIOs need to spend more time and energy moving away from this position, and usedigital opportunities to show their business peers IT can and must be much more proactive andstrategically involved than taking orders or keeping the lights on.

CIOs that have a partnering position — though better off than those still struggling to get out of thetransactional mode — must not stop there, but focus even more on showing true leadership andspend more time building close relationships with their peers in the c-suite.

To be a great executive leadership team member clarity and credibility are required. SuccessfulCIOs use communications to inspire action and commitment. A solid communications core consistsof a strategy, a plan and delivery skills. By communicating with stakeholders in their language, CIOslead more effectively and drive better business outcomes (see "Creating the Communications Core:The CIO's Guide to Effective Communications").

As a tool to test the degree to which the "trusted ally" label fits, consider this Capability AssessmentTool which helps CIOs diagnose their individual circumstances and provides recommendations for


developing their IT organization's partnership maturity (see "Capability Assessment Tool for 'ThePolitics of Powerful Partnerships'").

First, Disrupt Yourself: Take Courage

CEOs expect CIOs to be "first among equals" as champions, advisors, and enablers of digitalbusiness. Leaders of leaders need to adapt with the business and take their people along.

It is easy to think of digitalizing the business in a cold, clinical, logical way. However, becomingmore digital actually represents a continuum of personal risk for the CIO, and business risk for theentire enterprise. It involves stepping into the unknown, at least in terms of company knowledgeand experience, and sometimes even a net-new experience of the whole world. Most important, thecompany and the CIO must actively decide how courageous they are willing to be, and how muchrisk they are willing to take.

From a CIO perspective, the questions are: How much digital leadership am I willing to take on? DoI want to be an implementer of the IT aspects of digital initiatives, or a leader of entire initiatives? DoI want to be a leader of digital strategy? Digital transformation? Innovation? Product Design? Howmuch risk am I willing to take on personally?

That means active development of personal leadership capabilities, and the digital leadership skillsof the IT organization and business as a whole. The message is clear: Personal development iscritical, less is more, and focus is everything. CIOs must constantly educate, disrupt, and evolvethemselves to be the business drivers that their organizations are asking them to be.

ANZ CIOs spend a significant amount of time — a median of 8.5 days per year — on developingthemselves. This is less than global median of 10 days per year. Thirty percent of global CIOs spendmore than 20 days a year on their development, but only 12% of ANZ CIOs do this (see Figure 19).


Figure 19. CIOs' Investment in Personal Development


Interestingly, CIOs who have the best relationship with their CEO (as a trusted ally) spend that sameamount of time on personal development. However, they spend it on different things: less ontechnical development and conventional management development, more on training to be a boardmember, on corporate ethics and the like. That is, leading CIOs focus on C-level leadership trainingand on training in new areas that are of importance to the business.

Just like building your talent and delivery platforms, building your leadership platform requiresaction, and action now. Use Figure 20 to think through your leadership platform actions.


Figure 20. Leadership Platform Action Plan


Being a digital business leader will demand courage and ingenuity from you, the CIO, as anindividual as much as it is required of your whole team. Get involved, experiment, listen, learn —and lead with gusto.

Methodology

This research is based on data collected for the 2016 CIO survey. Using an online survey, Gartnercanvassed Executive Programs members and other IT leaders between 4 May 2015 and 24 July2015. Gartner collected input from 2,944 CIO respondents in 84 countries and across majorindustries and the public sector. Together, these organizations represent approximately $11 trillion inrevenue and public-sector budgets, and $250 billion in annual IT spending.

Gartner designed the survey to prove or disprove a series of hypotheses devised by a core team ofGartner research analysts and Executive Programs representatives. The research involved extensivereview prior to publication. The findings from the total dataset were published in their entirety as"Building the Digital Platform: The 2016 CIO Agenda."


http://www.gartner.com/document/3142019?ref=exp-report

Gartner Recommended ReadingSome documents may not be available as part of your current Gartner subscription.

"Building the Digital Platform: The 2016 CIO Agenda"

"2015 CEO Survey: Committing to Digital"

"Toolkit: Use Business Moments to Identify Hidden Value Opportunities for Your Enterprise"

"Driving Business Transformation by Changing the Culture"

"Maverick* Research: The Future of Talent; Stop Hiring People, Start Hiring Clusters"

"Culture Change Is Easier Than You Think"

"Bimodal IT: How to Be Digitally Agile Without Making a Mess"

"Creating the Communications Core: The CIO's Guide to Effective Communications"

"Capability Assessment Tool for 'The Politics of Powerful Partnerships'"

"Creating Your Digital Edge Through a Competency-Based Talent System"

Evidence

This research is based on data findings from the 2016 Gartner CIO Survey. The original survey datawas collected online from 2,944 members of Gartner Executive Programs and other IT leadersbetween 4 May 2015 and 24 July 2015.

1 T. Boyd. "The AFR CEO Survey 2016: Adapt or Die." Australian Financial Review. 18 December2015.

2 "CEO Survey." The Weekend Australian. 19-20 December 2015.

More on This Topic

This is part of an in-depth collection of research. See the collection:

■ 2016 CIO Agenda: Global Perspectives on Building the Digital Platform


http://www.afr.com/leadership/the-afr-ceo-survey-2016-adapt-or-die-20151215-glnnsv

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