Survey reveals digital business is now a priority for CEOs
TRADITIONAL businesses are coming to terms with the fact that they’ll need to go digital to survive in this day and age. Their focus is slowly moving from the “what” to the “how” of digital transformation.
According to a recent Gartner survey found that growth, corporate strategies, IT, and workforce issues continue to top CEO’s priorities in 2018. To achieve that, these business heads are concentrating on changing and upgrading the structure of their companies, including gaining a deeper understanding of digital business.
“Although growth remains the CEO’s biggest priority, there was a significant fall in simple mentions of it this year, from 58 percent in 2017 to just 40 percent in 2018. This does not mean CEOs are less focused on growth, instead, it shows that they are shifting perspective on how to obtain it,” said Mark Raskino, Vice President and Gartner Fellow.
“The ‘corporate’ category, which includes actions such as new strategy, corporate partnerships, and mergers & acquisitions, has risen significantly to become the second-biggest priority,” added Raskino.
IT remains a high priority coming in at the third position, and CEOs mention digital transformation, in particular.
Workforce has risen rapidly this year to become the fourth-biggest priority, up from seventh in 2017.
The number of CEOs mentioning workforce in their top three priorities rose from 16 percent to 28 percent.
When asked about the most significant internal constraints to growth, employee and talent issues were at the top.
CEOs said a lack of talent and workforce capability is the biggest inhibitor of digital business progress.
CEOs recognize the need for cultural change
Culture change is a key aspect of digital transformation. The 2018 Gartner CIO Survey found CIOs agreed it was a very high-priority concern, but only 37 percent of CEOs said a significant or deep culture change is needed by 2020.
However, when companies that have a digital initiative underway are compared with those that don’t, the proportion in need of culture change rose to 42 percent.
— Scott Monty (@ScottMonty) March 20, 2018
“These survey results show that if a company has a digital initiative, then the recognized need for culture change is higher. The most important types of cultural change that CEOs intend to make include making the culture more proactive, collaborative, innovative, empowered and customer-centric. They also highly rate a move to a more digital and tech-centric culture,” said Raskino.
Digital business matters to CEOs
Survey respondents were asked whether they have a management initiative or transformation program to make their business more digital. Sixty-two percent revealed that they did.
Of those organizations, 54 percent said that their digital business objective is transformational while 46 percent said the objective of the initiative is optimization.
ANZ CEO Shayne Elliott delivers the 1H18 financial results. Speaking to ANZs digital transformation “we responded early by establishing and resourcing a fully fledged digital banking function “. For more go to @ANZ_Media pic.twitter.com/bYHUjhnIuY
— Jill Campbell (@campbelljills) May 1, 2018
In the background, CEOs use of the word “digital” has been steadily rising. When asked to describe their top five business priorities, the number of respondents mentioning the word digital at least once has risen from 2.1 percent in the 2012 survey to 13.4 percent in 2018, according to Gartner.
This positive attitude toward digital business is backed up by CEOs continuing intent to invest in IT. Sixty-one percent of respondents intend to increase spending on IT in 2018, while 32 percent plan to make no changes to spending and only seven percent foresee spending cuts.
More CEOs see their companies as innovation pioneers
The 2018 CEO survey showed that the percentage of respondents who think their company is an innovation pioneer has reached a high of 41 percent (up from 27 percent in 2013), with fast followers not far behind at 37 percent.
“CIOs should leverage this bullish sentiment by encouraging their business leaders into making “no way back” commitments to digital business change,” said Raskino.
However, superficial digital change can be a dangerous form of self-deceit warned Raskino.
“The CEO’s commitment must be grounded in deep fundamentals, such as genuine customer value, a real business model concept and disciplined economics,” explained the Gartner Fellow.
"Digital transformation is more an issue of change management, and there are still efforts to be made in convincing people to work differently."
— Luxembourg House of Financial Technology (@The_LHoFT) April 25, 2018