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Digital transformation has become the career-defining issue for CEOs, which puts CIOs in a position to redefine their organisation's future business models and reset the rules of competition in their industry. [See also - 2018 CIO Agenda - Culture and people biggest barriers to digital transformation]

That was one of the findings from Gartner's 2017 CEO Perspective survey of almost 400 Chief Executives from across the world, which Vice President and Gartner Fellow Mark Raskino presented at the research, insight and advisory firm's annual European gathering in Barcelona last week.

While growth remained the leading concern for CEOs for the next two years, cited by 58% as their "top strategic business priority", IT-related matters climbed to number two on the list. Technology-related matters had risen to the fifth-biggest priority for Chief Executives in 2016.

"Five or six years ago IT barely appeared on the chart, it was embarrassingly low," Raskino said. "CEOs are having to think hard about IT. It's the issue of these times and it's in their face; it's not a choice for them.

"Gone are the days of CEOs saying 'please keep it quiet, please keep it cheap and please move it all to India'. This puts CIOs in the focal point."

Digital opportunity for CEO and CIO

Raskino said that "for this generation of business leaders, digital transformation has become a career-defining issue" which provided an opportunity for CIOs.

"What CEOs do with digital is material to their companies, and material to their careers as well," he said. "There is immense opportunity for CEOs who can seize and understand digital."

Raskino said that "digital business isn't the future anymore" and that CIOs need to help CEOs scale digital business.

"Chief Digital Officers might have planted the initial seed, but CIOs will have to industrialise the model to create the digital business of the future," he said.

While a CEO's understanding of digital business is generally improving, it still needs work, Raskino argued, and CIOs should help their Chief Executives define what digital means for their organisation and industry, and create KPIs and metrics to measure success linked directly to how it will help their organisation to grow.

Digital KPIs and metrics

"If a CEO doesn't have a metric to drive a transformation, it's not a Transformation with a capital 'T'," Raskino said. "CIOs need to boil down digital into some very simple metrics of whatever matters to a company.

"You have to define what a digital business means for your business. What is the number one goal, the metric which shows we are moving towards this digital goal? Then, what are the KPIs we will use in the management structure to drive that change?"

The next step for CIOs was to propose more creative digital business strategy ideas like setting up a startup incubator, creating a tech or digital joint venture, setting up a venture capital fund, joining a consortium or acquiring a new business entity, Gartner suggested. Thus CIOs need to grow as leaders and be comfortable engaging in conversations around these subjects.

"In my opinion every CIO should have a list of three companies their organisation should buy in order to advance your digital strategy by acquisition," Raskino said.

IT budgets

With IT budgets reported to be increasing in Gartner's CIO survey, Raskino said there was an opportunity for CIOs to pitch for serious technology investment.

"We are in pretty healthy global economic times and the financial crisis a long way behind us," Raskino said. "CEOs are more inclined to take risks because the growth propensity is quite strong.

"The money is coming; CIOs should not think they are limited to the current IT budget. Because IT matters to the future of CEOs, they will make some big net investments.

The study also found that it was twice as likely CEOs were planning to bring IT and digital capabilities in-house (57%) compared to outsourcing to external providers (29%), supporting the results of the 2017 CIO 100 when 74% of CIOs responded they were planning to bring key IT and digital skills back inside their organisations.

Security not a core CEO priority

However, Gartner's research found that cyber security was not one of the most critical concerns for CEOs despite a number of recent high-profile breaches, Raskino said, and that it was a myth Chief Execs were losing their jobs because of the threat.

In 2016 Gartner had reported that more CEOs saw cyber security as a technology problem than a business problem and recommended CIOs make sure it was seen as an organisation-wide responsibility.

"The security issue declining in the eyes of CEOs," Raskino said, "and the IT security industry sometimes overstates the impact.

"For a CIO who has been in position for six or seven years, their time's up anyway. If they are only six months in, boards, CEOs and investors are smart enough to know you are not going anywhere. And Chief Executives generally not lost their jobs yet over these issues."


Executive vice president and global head of research at Gartner, Peter Sondergaard, added that CEOs were also likely to become more demanding of the relationship between their CIO and HR chief. This would be caused by technologies like artificial intelligence beginning to significantly impact enterprise organisations, which is being exacerbated by cultural and people challenges being cited by CIOs as the biggest barriers to digital transformation.

"CEOs who are making a priority of digital are challenging their Chief Human Resources Officers with creating an appealing digital workplace environment that will attract and retain the best people," Sondergaard said.

"The solution for CIOs and their HR partners is AI. About 10% of CIOs are now using AI in the recruitment and talent management process. It will help you find people, and it will help you develop your people. It allows you to combine the best capabilities of humans with the best capabilities of machine learning systems."