Gartner has challenged CIOs to have an in-house digital and data capability, change their procurement processes to engage more with startups and join or create digital ecosystems following the release of its 2017 CIO Agenda. [See also: 2017 CEO Priorities - How CIOs can help CEOs on the digital journey]
The analyst, research and consulting firm's survey of 2,598 CIOs in 93 countries suggested increasing enterprise IT budgets, and found that CIO leaders and top performing organisations were more likely to be investing in digital initiatives, innovation projects, engage with startups, while killing spend on ERP. Gartner has also singled out diversity as an area CIOs and organisations need to focus on if they are to innovate and achieve the objectives.
Gartner research vice president Andy Rowsell-Jones said: "EMEA CIOs expect their enterprise IT budget to increase 1.4% on average in 2017 - the smallest increase of any of the world's regions - but despite this spending on digitalisation is on the rise.
"EMEA CIOs are spending an average of 19% of their enterprise IT budget on digital initiatives, a figure set to increase to 29% in 2018. Their investments include key technologies for traditional digital marketing and digital sales channels, advanced analytics, the Internet of Things, enhanced digital security solutions, and business algorithms and learning machines."
2017 CIO Agenda - Startups and procurement
Rowsell-Jones implored CIOs to look beyond the traditional IT suppliers.
"The top performing organisations are much more likely to engage with startups and source from them," he said. "The trailing performers distinguish themselves by mostly ignoring them.
"CIOs should consider whether engaging more with startups should become more part of their sourcing strategy."
Rowsell-Jones said that CIOs must to do this as part of their innovation agenda.
"CIOs need to be dealing with startups because that is where unconventional ideas are coming from," he said. "Big businesses can have processes in place and mechanisms which prevent them from dealing with startups.
"CIOs need to sell the benefits of working with startups; you have to be a great communicator and explain why they offer something unique which you can't get elsewhere and the business rationale to doing it.
"There is also a governance piece, you need to be governed by slightly different versions of your procurement rules. You also need to be the internal cheerleader, have a lifecycle management process and create a governance process that lets you deal with startups."
2017 CIO Agenda - Kill ERP investment
The research also revealed those investing in ERP were much more likely to be classified as what Gartner referred to as "trailing performers".
"Why are people continuing to invest in ERP? The answers is because it's a habit, even if it might be entirely uneconomically [sic] rational," Rowsell-Jones said.
"Leaders are not investing in ERP; that's not to say it is bad but if you are trying to build a digital business then it is not a priority. ERP is important but leaders have figured out a way of stopping to invest in it."
The research placed business intelligence and analytics as the number one investment among CIOs globally and in the EMEA region, while Rowsell-Jones said that there was an emerging trend of CIO leaders bringing previously outsourced capabilities back in house.
2017 CIO Agenda - Insourcing and IT skills gap
"We are becoming builders again, building a digital capability in house," he said. "You can't get it on the market, what people are doing is so innovative you can't go out and buy it."
CIOs are also seeing this as a commercial decision, with an in-house capability part of the organisation's IP which they do not want to share with the market place and part of a strategy to increase future revenues, the analyst reasoned.
The survey revealed CIOs saw a talent shortage as the biggest barrier to success, with technological challenges and hurdles lowest on the list behind budgetary constraints, cultural challenges and management issues.
CIOs responded that the skills gap was most visible in the analytics, BI and data science space.
Rowsell-Jones said: "Some organisations have shifted the focus of their business to software engineering, and one challenge facing them in particular is that planning horizons for finding, acquiring and retaining talent tend to be too short. With 59% of talent planning being for less than one year, companies that are feeling the effects of the talent shortage probably failed to plan far enough ahead.
2017 CIO Agenda - Diversity
At its 2017 Gartner Symposium in Barcelona the organisation also highlighted diversity as a key area for where CIOs could respond to their biggest challenges and gain a competitive advantage.
Gartner analyst Don Scheibenreif said: "True leaders create team diversity and establish cognitive diversity in their team. Cognitive diversity in a team pushes new thinking and creates breakthrough results that are a critical part of a business leader's strategy."
Vice president and Gartner fellow Debra Logan said that diversity was a CIO's secret weapon in war for talent and that organisations suffered from group-think and "chronic sameness" which affected their ability to innovate and drive better performance.
"Cultural rigidity is your worst enemy," she said. "The industry has a gender imbalance and an age imbalance and it is difficult to innovate without diversity - the business case has been put forward in other realms and IT needs to be building its business case for diversity."