Three CEO concerns CIOs must address

Gartner has identified reglobalization, economic slowdown and ‘digital dithering’ as the top three concerns for CEOs in 2019.

CIOs need to understand these concerns and address them in their strategic planning over the next 12-18 months.

Kristian Steenstrup, distinguished analyst and Gartner Fellow, said that with business conditions declining, CEOs are looking for ways to sustain growth in revenue.

“Many boards are asking CEOs to get more returns from digital to counterbalance other difficult business issues,” Steenstrup said. “CEOs think it’s time for digital initiatives to show value. They have been investing in digital for many years, and now expect it to ‘grow up’ and start delivering at scale. If CIOs understand what their CEO needs to achieve, they can shift their agenda to support them.”

Steenstrup warned that deeper changes to business models, rules of competition, products and services are coming.

“Organizations must avoid falling into short term dependency on tactical digital results at the expense of longer-term structural changes, such as mergers and acquisitions and company reorganizations,” he said.

According to Gartner, the three top concerns of CEOs and the implications for CIOs are:

1.Reglobalization

Globalization is under pressure, facing major shifts and challenges as governments around the world reassess trade relationships and the rules of trade. Reglobalization is a new topology of globalisation, with societies rethinking relationships and boundaries.

In the Gartner 2019 CEO Survey, 23% of CEOs said that new international trade tariffs, quotas and other controls would have a significant impact on their business in the next three years, and a further 58% said they have “general concerns” about it.

In the Gartner 2019 CEO Survey, 23% of CEOs said that new international trade tariffs, quotas and other controls would have a significant impact on their business in the next three years, and a further 58% said they have “general concerns” about it.

“CIOs must play the role of the trusted ally to the CEO if they’re going to navigate their organization through these geopolitical shifts,” said Steenstrup.

CIOs should focus on guiding their organizations using geo-flexibility. This can be achieved by applying data science to stay ahead of competitors by identifying the best geographic business locations and flows; deploying cloud-based capabilities to be geographically agile in their operations; and exploiting geographic moves as opportunities to accelerate digital business transformation.

2.Economic Slowdown
Economic indicators have been causing increasing concern for CEOs throughout 2019, particularly inverted yield curves, reduced earnings growth, lower trade volumes and reduced confidence indexes.

“CIOs can support their CEOs by being a rounded business contributor to the overall discussion, assisting as an analytical and diagnostic thinker, as well as project manager,” Steenstrup said.

CIOs can help CEOs by challenging tired/traditional measures of productivity that are delivering diminishing returns; identifying new keys to productivity to drive the organization’s digitally shifting business model; and applying digital and IT innovation to create productivity breakthroughs.

3.Digital Dithering
Many CEOs have not committed as deeply as they should to digitalization, despite its ability to deliver on their growth priority. Many are uncomfortable in an area that is not their area of specialty and in which they feel exposed. Others hesitate due to the cost and the deep changes required.

“We are seeing softening perspectives on digital amongst CEOs,” said Mr. Steenstrup. “What they shouldn’t do is give up on digital transformation through this trough of disillusionment, as they will regret it in three-to-five years. Some companies may not survive; while others will fall behind and find it very hard to catch up.”

CIOs can help their CEOs secure their organization’s long-term digital vision by crafting a three-horizon digital strategy, which addresses what digital will look like next year, in five years and in 10 years.

The strategy must overtly show how today’s progress secures future options, and focus on differentiating, enduring capabilities and long-range measures.

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