The pressure is on CIOs and IT leaders to get more value from their technology investments faster as they face economic pressures, ongoing supply chain issues and an IT talent gap, according to a new Gartner survey.
The analyst firm’s survey of global CIOs and technology executives finds that IT budgets are expected to increase 5.1% on average in 2023, but that is lower than the projected global inflation rate of 6.5%. Economic uncertainty, workforce issues and ongoing supply chain challenges are making their jobs even harder.
The bulk of the objectives for IT investments over the last two years were to improve operational excellence (53%) and customer or citizen experience (45%), while just 27% cited growing revenue as a primary objective. Similarly, just 22% said they wanted to improve cost efficiency with their technology investments.
CIOs are now being tasked with shifting their mindset and prioritizing digital initiatives with market-facing, growth impact, says Janelle Hill, distinguished VP analyst at Gartner.
“For some CIOs, this means stepping out of their comfort zone of internal back-office automation to instead focus on customer or constituent-facing initiatives,” Hill says.
However, Gartner says CIO’s future IT investments remain focused on optimization rather than growth, with top areas of increased investment for 2023 including cyber and information security (66%), business intelligence/data analytics (55%) and cloud platforms (50%). However, just 32% are increasing investment in artificial intelligence (AI) and 24% in hyperautomation.
Those CIOs that are focused on market-facing growth are more likely to leverage data, analytics and AI to detect emerging customer behavior or sentiment that represents a growth opportunity, Hill adds.
Gartner is also calling on IT leaders to reconcile siloed initiatives with a visual metrics hierarchy to communicate and demonstrate interdependencies across related digital initiatives. The firm’s study found that 95% of organizations struggle with developing a vision for digital change, largely due to competing expectations from different stakeholders.
To help accelerate delivery of IT investments, technology leaders need to be accountable and hold others accountable, according to Gartner. Hill uses the example of a digital investment designed to improve customer experience and profit margins. In this scenario, the CIO’s accountable partner would be the marketing or finance executives.
CIOs should connect with other leaders in their organization for each digital initiative to create metrics for that improvement and identify the chain of accountability.
Gartner also found that organizations have an over-dependence on IT staff for delivery of their tech investments, as 77% of CIOs said their IT staff is primarily responsible for providing innovation and collaboration tools, and just 18% said non-IT personnel provide those tools.
That mindset can impede agility, and CIOs must embrace democratized digital delivery by design to help accelerate that time to value. That strategy could include loaning IT staff to fusion teams that combine business experts, business technologists and IT that are focused on achieving digital business outcomes and opens the door to integrate business experts into a reciprocal IT-led fusion team.
CIOs continue to report challenges hiring and retaining IT talent needed to accelerate those digital initiatives, but some are looking at unconventional resources.
According to Gartner, 12% are using students through internships and relationships with schools, and 23% use gig workers.
“Talent shortages are among the greatest hindrances to digital,” says Sanchez Reina, VP analyst at Gartner. “CIOs are often limited by policies related to preferred providers or employment contracts. They must stress to business and HR leadership that engaging unconventional talent sources can help accelerate the realization of digital dividends.”
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