Gartner - 2013 CIO Agenda Report

Gartner Executive Programs
Hunting and Harvesting in a Digital World: The 2013 CIO Agenda
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Executive summary ITs aspirations require addressing current realities CIOs need a new agenda for digital business and beyond CIOs must hunt and harvest IT must set aside old rules and adopt new tools The 2013 CIO Agenda Appendix: Additional data, demographics Further reading
January 2013
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FoRewoRd
CIOs face a complex future, caught between current IT operations and digital opportunities. On average, CIOs report that their enterprises realize only 43% of technologys business potential. That number must improve if companies are to realize value from IT in a digital world. The CIO agenda for 2013 involves adopting new approaches to hunting for innovations and opportunities that deliver digital value, while harvesting increased business performance from products, services and operations.
The 2013 CIO Agenda addresses the question, What are the opportunities and challenges facing CIOs in an increasingly digital world, and how are they addressing them? As an agenda, this report concentrates on discussing the results of this years CIO survey and the actions of leaders in the face of ongoing operations and emerging digital challenges. It raises more questions than it answers but in the process seeks to help CIOs evaluate their agendas for the coming year. The questions and answers establish the research agenda for 2013 and inform the direction of the Executive Programs reports outlined in the nal section of this report. Hunting and Harvesting in a Digital World: The 2013 CIO Agenda was written by Mark McDonald (group vice president and Gartner Fellow) and Dave Aron (vice president and Gartner Fellow).
Mark McDonald
Dave Aron
We would like to thank the many organizations and individuals that generously contributed their insights and experiences to the research, including: he 2,053 CIOs who responded to this years survey, representing more than $230 billion in CIO IT T budgets and covering 36 industries in 41 countries. T he contributors to our interviews and case studies: Tunde Coker, Access Bank (Nigeria); Mike Capone, ADP (U.S.); Saul Hernandez, Alpha Natural Resources (U.S.); Sabine Everaet, Coca-Cola Europe (France); Fredrik Karlsson, DeLaval (Sweden); Mike Bracken, Government Digital Service (U.K.); Claudio Laudeauzer, Grupo Fleury (Brazil); Joan Miller, Houses of Parliament (U.K.); Michael Hanken, Multiquip (U.S.); Marc Franciosa, Praxair (U.S.); Tony Bridgewater, Salmat (Australia); Sundi Balu, Telstra International Group (Hong Kong); and Scott Studham, University of Minnesota (U.S.). ther Gartner colleagues: Lisa Beck, Linda Cohen, Annemarie Earley, Sue Evans, Jolanta Gal, O Derek Galvin, Steven Lachowski, Bard Papegaaij, Claudia Ramos and Kevin Zhou. ther members of the CIO & executive leadership research group: Richard Hunter, Raymond O Laracuenta, Ken McGee, Leigh McMullen, Mark Raskino, Andrew Rowsell-Jones, Michael Smith, Lee Weldon and Colleen Young.
Hunting and Harvesting in a Digital World: The 2013 CIO Agenda 3
Executive summary
According to CIOs, the enterprise realizes only a fraction of technologys potential. Realizing the full potential of digital technology opportunities requires changing IT practices and tools. To hunt for digital innovations and opportunities, and consistently harvest value from products, services and operations, CIOs must set an agenda that leads to new attitudes, behaviors and roles.
ITs aspirations require addressing current realities

CIOs report that, on average, their enterprises realize only 43% of technologys potential. Volatility, uncertainty, change and other challenges erode business and IT capabilities, raising the stakes for the business and IT. Though exceptional companies exist, the vast majority of IT organizations need to address fundamental gaps in their performance relating to strategy, funding and skills. Only in this way can IT meet digital business expectations and its own aspirations.
CIOs need a new agenda for digital business and beyond

How technology will support growth and results is a fundamental question for the future. It is no longer sufcient to tend the IT garden and declare success. Digital technologies provide a platform to achieve results, but only if CIOs adopt new roles and behaviors to hunt for digital value. CIOs require a new agenda for digital business and beyond an agenda that secures ITs future strategic role, funding and skills.
CIOs must hunt and harvest

Traditionally, the CIO role concentrated on tending to IT operations. However, the world has changed and IT must adapt by extending its role in the enterprise. Hunting and harvesting entail new attitudes and responsibilities for IT that reect the realities of digital business. CIOs, therefore, have three tasks today: Tend to the legacy, hunt for new digital business opportunities, and harvest value from business process changes and extended products/services.
IT must set aside old rules and adopt new tools

In a world of change, it is concerning that a majority of CIOs, according to the survey, do not see ITs enterprise role changing over the next three years. IT rules regarding enablement, governance, alignment, organization, metrics, etc. created more than 20 years ago addressed automating and integrating business operations for cost reductions and efciency gains. IT needs new tools if it hopes to hunt for digital innovation and harvest raised business performance from products, services and operations. Without change, CIOs and IT consign themselves to tending a garden of legacy assets and responsibilities.
The 2013 CIO Agenda

The CIO agenda outlines the challenges for 2013 and the actions required for success. CIOs foresee a nite set of tasks that dene what they do new, undo, redo and choose not to do. These actions, and decisions not to act, reect the need to establish a new nancial, organizational and enterprise rationale for information technology.
1 ITs Aspirations Require Addressing Current Realities
In this years survey, CIOs reported that, on average, their enterprises realize only 43% of technologys potential. Volatility, uncertainty, change and other challenges erode business and IT capabilities, raising the stakes for the business and IT. Though exceptional companies exist, the vast majority of IT organizations need to address fundamental gaps in their performance relating to strategy, funding and skills. Only in this way can IT meet digital business expectations and its own aspirations.
The quiet IT crisis

CIOs and IT leaders always knew that doing the right thing required tending to IT by delivering costeffective quality services. They therefore managed cost, complexity and risk to enable business operations in a world of managed stability. However, the world outside of IT changed: Recession replaced growth, volatility replaced stability, dynamic change replaced predetermined plans, and frontofce digital technology became more important than back-ofce operational IT. These changes created a quiet crisis for IT, revealed in this years CIO survey. In a quiet crisis, many feel that something is not quite right, but few know how to lead the change. Demands have increased as the world grows more dynamic and digital. The harder CIOs work tending to current concerns, the less relevant IT becomes, with past core capabilities becoming future core rigidities. CIOs now know that the future rests not in repeating the past but in extending IT by hunting and harvesting in a digital world. That is what is different in 2013. Without change, IT faces a continuing quiet crisis as current practices and plans no longer meet future realities and expectations. CIOs have spent the last decade in a world of tight budgets, limited technology innovation, cost cutting, outsourcing and control. But digital technology changes ITs business and technical context. CIOs faced a similar situation when they set aside concerns regarding the Internet to concentrate on Y2K and IT. Now they need to reconsider their current focus on cost against increased demands for digital technology.
As shown in the gure below, the tension between cost and digital technology creates three interlocking issues that CIOs must address over the next three years: strategy, funding and skills.
Three interlocking issues determine ITs digital future
Strategy
Funding
Skills
The 2013 CIO Agenda concentrates on recognizing these challenges and developing plans to win in a digital world. Most CIOs cannot simply make the case for greater strategic involvement, funding and skills based on where IT is today. IT must go beyond its current focus on tending to current operations and systems to adopting new behaviors so that it can hunt for new digital innovations and opportunities, and harvest raised business performance from products, services and operations. CIOs who merely stick to their current job in this quiet crisis are setting themselves up to lose that job in the future. IT is not going away; it just needs to change not because it is wrong, but because the world has changed and enterprises are realizing only a fraction of technologys potential.
Realizing a fraction of technologys potential is no longer enough

CIOs responding to this years survey believe their enterprises realize an average of 43% of technologys potential (see gure below). Given this observation, asking whether IT can support the enterprise going forward is a legitimate question. The answer is yes, but to ll such a big gap, CIOs cannot merely work harder. Over the last 18 months, digital technologies including mobile, analytics, big data, social and cloud have reached a tipping point with business executives. There is no choice but to increase technologys potential in the enterprise, and this means evolving ITs strategies, priorities and plans beyond tending to the usual concerns.
Based on your judgment, how much of technologys potential would you say your enterprise has realized?
60% 51% 50%
Percentage of respondents
Average: 43%
40%
30%
25% 21%
20%
10%
0% Less than 50% 50% Greater than 50%
CIOs report that signicant challenges have limited their ability to realize more value and meet the demands of digital technologies, which have only amplied these limitations. While there are technological challenges outside of IT, many of the factors holding technology back lie squarely within ITs backyard: S urviving in an environment of limited budget increases keeps IT focused more on current operations and less on being strategically relevant. orking with a labor market that no longer delivers the required stream of skilled professionals limits W ITs capacity to take on new challenges and new digital technologies. etaining an inflexible organizational structure despite changing demands restricts ITs role and R adaptability. It is incumbent on CIOs to lead in the face of these factors, rather than muddle through with what they already have. Over the next three years, they cannot repeat a past of doing more with less if they expect to create value far into the future. The rest of this section quanties the factors and denes the requirements for realizing the full potential of IT.
Digital technologies create a new context for the business and IT At some level, every technology is a digital technology. In this report, digital technologies refer to a specic set of new technologies: those that create value by applying information rather than automating business transactions. Mobile, analytics, big data, social and cloud are the key digital technologies we discuss. Generating revenue and results through digital technologies denes a digital business, which goes beyond simply substituting digital resources for their physical counterparts an e-book for a book or an e-store for a brick-and-mortar store. Technology-oriented forms of digitization underplay the innovation and value-creation potential of digital technologies. Our focus, then, is on how digital technologies drive revenue and results rather than replace people and processes.
CIOs and their IT organizations are expected to survive in an environment with little if any real budget increases
CIO IT budgets the amount of money CIOs control within their own cost codes have been at to negative ever since the dot.com bust of 2002. For 2013, CIO IT budgets are projected to be slightly down, with a weighted global average decline of 0.5% compared to 2012 actual spending. Twenty-five percent of firms expect to cut their 2013 CIO IT budgets; 33% of firms expect an increase over 2012 actuals, with 42% predicting the same spending as in 2012. Declines in larger CIO IT budgets outweigh increases in smaller budgets, resulting in the overall decline in the global weighted CIO IT budget. On an unweighted basis, CIO budgets were at. The gure on page 10 shows IT budget trends over the past 10 years overall, a decade of devaluation in CIO IT spending.
Hunting and Harvesting in a Digital World: The 2013 CIO Agenda 9
CIO IT budget changes over the past 10 years

$113.45
$109.83 $106.53 $103.73 +2.5% $101.20 +1.2% $100 0.0% +2.7% +3.1% +3.3% +1.0% $104.27 $104.67
$104.15 $103.12
$104.14
+0.5%
2003
2004
2005
2006
2007
2008
-1.1%
2011
2012
Percentages represent the projected average weighted change in the CIO IT budget for the year. The dollar figure represents the dollar value change in the CIO IT budget between years, using 2003 as the base year.
2010
-0.5%
2013
-8.1%
2009
Based on this ow of money, IT cannot expect to secure additional funding without assuming new responsibilities or producing new results. Reacting to limited budgets by restructuring costs, outsourcing and doing more with less made sense from 2002 to 2011, when the supply of innovative technologies was scarce. But now CIOs need to make the case that mainstream emerging mobile, analytics, big data, social and cloud technologies justify revisiting IT budget and investment levels.
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The IT labor market is not delivering enough skilled professionals

CIOs have consistently reported a lack of skills as the single biggest factor limiting ITs success. In 2011, they found IT skill-building techniques such as mentoring inadequate; in 2010, they saw outsourcing or contracting as the most effective way to get needed skills. This years survey asked more broadly whether the IT labor market had the ability to supply the required skills. One in four CIOs believe that the IT labor market is working, in the sense that they can get the skills they need. Most of these CIOs lead smaller organizations that use less outsourcing. The remaining CIOs, as shown in the gure below, either see themselves getting the right skills in spite of the IT market (7%), have no opinion on the IT labor market (29%) or see the market as ineffective (18%).
The IT labor market works for one in four enterprises

Very effective/effective
20%
26%
IT labor market is effective Very ineffective/ineffective
29% No opinion
18%
7%
Strongly disagree/disagree
Strongly agree/agree
My IT organization has the right skills
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Digital technologies will only further challenge a weak IT labor market. Without the ability to readily build new skills internally, CIOs are vulnerable to skill shortages, especially as older IT professionals with expertise in those skills retire. Approaches to getting the right skills in IT require circumventing the limitations of the current labor market. This will be the topic of a 2013 Executive Programs report.
IT organizations are inexible

Consider how often the business reorganizes, and then consider how often IT reorganizes. Changes in strategy often bring changes in structure, except perhaps in IT, where 68% of CIOs believe that the current IT structure is sufcient to handle changes in strategy. The gure below suggests that CIOs build condence in their ability to deliver strategic change by changing priorities, thereby making strategic execution an issue of governance rather than structure.
How sensitive is the IT organization to changes in business strategy or priorities?

A change in business strategy requires changing the IT organization and structure. The IT organization will align resources and projects but not change its structure. 40% 11% The IT organization would change only if there is a significant structural change in the enterprise/business unit/government entity.
21%
6% The current IT organization can support foreseeable changes or business strategy without organizational change. 22% The IT organizational structure is independent of changes in business strategy.
CIOs must be able to change IT rather than just change IT priorities. A CIO overly condent in the stability of the IT organization contradicts the changing nature of technology innovation and the businesss requirements of IT. Given the changes on the horizon, CIOs should consider evolving their organizational structure not only to meet the requirements of new digital technologies, but also to adapt to business goals such as cost-effective growth in a globally competitive world.
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The importance of extending ITs performance prole

As we have seen, over the past 10 years, CIOs have led IT in an environment of economic uncertainty, global volatility and nancial constraints. Faced with tight budgets, limited resources and scarce skills, most CIOs have had little choice but to tend to their current responsibilities. But digital technologies, business demands for growth, and a rapidly changing enterprise landscape require CIOs and their IT organizations to extend their performance prole, adopting a broader range of behaviors to meet the challenges. The gure below illustrates three performance proles identied during analysis of responses to this years CIO survey, and the role of IT in each.
Extending ITs performance prole beyond tending, to hunting and harvesting for digital value
Tending Performance Performance Hunting Performance Harvesting
Time Working within existing constraints (supporting step change) Improving current operations and resources Generating value through optimization Upgrading existing capabilities and systems Concentrating on achieving the IT plan at cost and with quality
Time Searching for new innovations (the arrows) that expand business opportunities and strategy Disrupting markets with new digital innovations and offerings Generating value by extending the frontier of performance Implementing new digital solutions Concentrating on linking across the enterprise and creating new sources of value, results and revenue
Time Exploiting business capabilities to achieve consistent growth and performance Transforming business processes, products, services and operations Generating value by actively managing business results Creating new operations and sustaining performance levels Concentrating on achieving the business plan via changing business performance
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Tending, hunting and harvesting represent an expansion of the roles CIOs and IT organizations will play in the digital world. These expanded roles are not mutually exclusive, and an IT organization should not restrict itself to one role. CIOs should recognize ITs role in each situation and adapt the organization, skills and resources to respond to the roles business requirements. We dene the roles as follows: T ending involves managing ITs current operational and investment responsibilities within existing boundaries and constraints where the enterprise needs stability, cost management and quality of service. unting is used in situations where technology is out in front and involves scouting and nding H innovations and opportunities beyond enterprise boundaries. Some hunting projects will fail, but each helps the enterprise learn about digital technology and value. The result is an accelerating rate of performance as new technology and business solutions take the enterprise beyond current operations. arvesting is used throughout the enterprise as IT raises business performance by actively changing H business processes, extending products and services, and replicating best practices. Unlike tending, harvesting transforms IT, business processes and applications to produce additional results.
Tending, hunting and harvesting complete ITs business value spectrum

Realizing ITs business value requires creating the right combination of roles, resources and solutions. CIOs already have tools for managing resources and solutions. The run/grow/transform budget framework, for example, provides a resource view of ITs business value based on classifying investments. And the Gartner Pace-Layered Application StrategyTM classies IT solutions into systems of record, differentiation and innovation. Tending, hunting and harvesting complement this view, describing ITs different roles and responsibilities. Together, these views complete the spectrum for IT delivering business value according to role, budget and solution. Assuming an exclusive relationship between these views limits how IT creates business value. Savvy CIOs do not equate one view with another. For example, they do not harvest operational value by limiting themselves to run investments or to changing systems of record. How a CIO combines the tending, hunting and harvesting roles will shape the IT organizations performance prole and strategic relevance. Combining the roles is critical to giving IT, and ultimately the enterprise, greater adaptability and sustainability in turbulent times. Moreover, pursuing this kind of multi-thread strategy diversies executives options, enabling them to readily shift resources and priorities in response to changing conditions, rather than requiring one strategy to stop before another starts. The need for this degree of exibility will come into focus when a CIO considers the state of business strategies and priorities. Coca-Cola Europe is an example of an enterprise that excels at all three roles: actively tending, hunting and harvesting value in the digital world.
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Case Study
Coca-Cola Europe applies technology to create global enterprise value

The Coca-Cola Company is one of the worlds largest beverage companies, with 15 billion-dollar brands that include Coca-Cola, Diet Coke, Coca-Cola Zero, Fanta, Sprite, VitaminWater and Minute Maid. Consumers in 200 countries drink 1.8 billion servings of Coca-Cola brands a day. Based in Atlanta, Georgia, USA, the company had 2011 revenue of $46.5 billion and has 146,200 employees. With multiple ofces across Europe, Coca-Cola Europe proactively engages consumers through social media and mobile platforms. Data from these interactions feeds into one database that is analyzed to produce precision digital-marketing campaigns. According to CIO Sabine Everaet, Coca-Cola Europe has mandated that social engagement solutions and digital marketing be fully integrated into a database that is scalable across Europe to make the company even more relevant to consumers, increase cost-effectiveness and prevent duplication in different markets. Once this is scalable in all the countries, we can go beyond Europe, says Everaet. Europe is playing a leading role globally for Coca-Cola. Our purpose is to integrate everything we do in a single consumer database, to understand all the types of interactions we have with a single person. That is the core of our project. The two key capabilities built on top of the database are proactive consumer call centers called citizen interaction centers and precision marketing. To industrialize Coca-Cola Europes social media strategy, Everaet recruited people from a marketing agency and then piloted and established the Spanish interaction center. Fourteen university graduates skilled in social media staff the center, engaging consumers through multiple mobile and digital channels. Interaction center agents troll social media chatter for positive and negative information affecting the business such as the buzz around a new campaign running on YouTube or a debate about quality and ingredients. The agents adhere to company standards while using their own social listening tools obtained from the Internet. When they come across negative chatter, within 48 hours they mount a campaign to address the issue, and they make sure it is picked up. Data is collected at every consumer connection point so that subsequent connections reect consumers preferences and social behavior, enhancing their future experiences. After the interaction center was demonstrated to European and global leadership, they designated this model the leading social engagement platform for Coca-Cola worldwide.
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Case Study
Coca-Cola Europe applies technology to create global enterprise value (continued)

Based on the Spanish interaction center pilot, the company has been able to drive down interaction costs. From an average of 7,500 contacts per quarter, costing 9 (US$11.87) per interaction, this center has gone to 35 million social impressions per quarter, at a cost of 0.004 (US$0.005) per impression. Precision marketing, the second key capability built on Coca-Cola Europes consumer database, is fueled by data analysis and builds brand-relevant content for targeted communities. Everaet describes this marketing as contingent on truly understanding consumer proles and accurately segmenting them into communities. She notes that, in Europe alone, there could be 10,000 targeted communities. With this level of precision, the company can send consumers relevant content on any device and through any channel. Coca-Colas Facebook page, which has 56 million likes and much content that consumers build themselves, is an area Everaet expects to mine for insight into the behavior and preferences of specic consumers. Plans include the capability to socially augment the consumer data. The tools Coca-Cola has created are used for both marketing and public affairs. As Everaet explains, Corporate and brand-related communications are clearly merging. Whether the data comes through a brand communication, the interaction center, gaming, a blog or the Facebook page, were analyzing and using it to understand our consumers and promote our brands. Based on an interview with, and material from, Sabine Everaet, CIO, Coca-Cola Europe, October 2012. (See an expanded version of this case study on the Executive Programs website.)
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The 2013 CIO Agenda rationale

There are no simple answers to ITs quiet crisis, nor is there a single action that will address the strategic, funding and skills challenges. These are complex issues that require an understanding of the context facing CIOs and their IT organizations. The next three sections seek to provide this understanding. Then, in the nal section, we offer recommendations for your 2013 CIO Agenda. Looking at the context facing CIOs, the next section reflects the business, technology and CIO strategies and priorities reported in this years CIO survey. Based on that context, section 3 concentrates on the changed nature of the CIO role and what it means to the CIO to adopt hunting and harvesting behaviors. Section 4 looks at the IT organization and what is needed there to generate resources, skills and changes in ITs role. The nal section suggests how CIOs can best incorporate hunting and harvesting roles into their organizations. Throughout this report, we present brief case studies in which CIOs share their experiences on these issues. More detailed versions of these cases, and additional case studies on enterprises participating in our research, can be found on the Executive Programs website.
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2 CIOs Need a New Agenda for Digital Business and Beyond
How technology will support growth and results is a fundamental question for the future. It is no longer sufcient to tend the IT garden and declare success. Digital technologies provide a platform to achieve results, but only if CIOs adopt new roles and behaviors to hunt for digital value. CIOs require a new agenda for digital business and beyond an agenda that secures ITs future strategic role, funding and skills.
Business strategies require new behaviors to achieve enterprise growth, gain customers and expand technology
According to this years CIO survey, growth strategies dominate business strategic priorities, and for good reason. Even in good economic times, growth is challenging, so current economic, nancial and political uncertainty make it particularly vexing. The 2013 business priorities laid out in the gure opposite show that a focus on growth is a focus on a future where executives see a major role for customers and improvements in technology.
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2013 top 10 global business strategies

Business strategies Ranking Increasing enterprise growth Delivering operational results Reducing enterprise costs Attracting and retaining new customers Improving IT applications and infrastructure Creating new products or services Improving efficiency Attracting and retaining the workforce Implementing analytics and big data Improving business processes Expanding into new markets and geographies *Not an option that year Ranking of business strategies CIOs selected as one of their top 3 in 2013 2013 1 2 3 4 5 6 7 8 9 10 21 2012 1 5 3 2 * 4 6 8 * 13 10 2011 1 9 3 2 * 4 8 12 * 5 11 2010 * * 2 5 * 6 * 4 * 1 13 2009 * * 2 4 * 8 * 3 * 1 10
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The diversity and complexity of business priorities calling for growth, customer acquisition and technology adoption translate to IT playing a range of roles. The gure below offers a different view of business priorities, based on the tending, hunting and harvesting proles presented earlier.
CIOs face the same business strategies regardless of their preference to tend, hunt or harvest
Business strategies Ranking Increasing enterprise growth Delivering operational results Reducing enterprise costs Attracting and retaining new customers Improving IT applications and infrastructure Creating new products or services Improving efficiency Attracting and retaining the workforce Implementing analytics and big data Improving business processes Implementing enterprise strategy Ranking of business strategies CIOs selected as one of their top 3 in 2013 All CIOs 1 2 3 4 5 6 7 8 9 10 11 Tending 1 2 3 4 5 6 7 12 10 8 14 Hunting 1 5 4 3 2 6 7 15 8 10 9 Harvesting 1 2 3 4 5 6 7 15 8 10 9
As the gure shows, the priorities are important regardless of role, and therefore CIOs need to consider a multirole approach when working on business strategies. In other words, the tending, hunting and harvesting roles carry through to the diverse set of digital technologies that will dominate CIOs agendas in 2013.
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Digital technologies dominate the CIO agenda in 2013

Digital technologies what Gartner refers to as the Nexus of Forces dominate CIO technology priorities for 2013. The top 10 global technology priorities reect a greater emphasis on externally oriented digital technologies, as opposed to traditional IT/operationally oriented systems (see gure below). CIOs see themselves with a range of digital innovation tools, all of which rely on tending existing platforms in support of hunting for new digital opportunities and harvesting value from products, services and operations.
2013 top 10 global technologies

CIO technologies Ranking Analytics and business intelligence Mobile technologies Cloud computing (SaaS, IaaS, PaaS) Collaboration technologies (workflow) Legacy modernization IT management Customer relationship management Virtualization Security ERP applications *Not an option that year Ranking of technologies CIOs selected as one of their top 3 priorities in 2013 2013 1 2 3 4 5 6 7 8 9 10 2012 1 2 3 4 6 7 8 5 10 9 2011 5 3 1 8 7 4 18 2 12 13 2010 5 6 2 11 15 10 * 1 9 14 2009 1 12 16 5 4 * * 3 8 2
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CIOs see these technologies as disrupting business fundamentally over the next 10 years. When asked which digital technologies would be most disruptive, 70% of CIOs cited mobile technologies, followed by big data/analytics (58%), social media (54%) and public cloud (47%). The disruptiveness of each of these technologies is real, but CIOs see their greatest disruptive power coming in combination rather than in isolation. For example, the gure below shows the frequency with which CIOs see mobile, big data/analytics and social media technologies working together.
CIOs see digital technologies creating value in combination rather than in isolation
Mobile technologies Big data/analytics Social media
Mobile technologies
17% Only mobile technologies
18% Both mobile technologies and big data/analytics
17% Both mobile technologies and social media
Big data/analytics
11% Only big data/analytics
8% Both big data/analytics and social media
Social media
21% All three technologies together
8% Only social media
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Digital technologies have the potential to disrupt and transform any industry. Most of us think about the role of digital technologies in terms of information-based businesses, but what business today is not information-based? The following case study on DeLaval illustrates how a Swedish company is using technology to digitalize the business by hunting for information opportunities and harvesting value from the emerging digital platform. Case Study
DeLavals more productive and protable digital dairy farms

Swedens DeLaval operates in 100 countries and is one of the worlds largest developers, manufacturers and providers of dairy farming solutions, including equipment and complete systems for milk production and animal husbandry. With Tetra Pak and Sidel, DeLaval is part of the Tetra Laval Group. DeLaval had 2011 revenue of 955 million (US$1.3 billion) and employs 4,415. Historically, keeping track of cows for milk production, which encompasses their feeding, health and reproduction, was a process that farmers internalized. Today, DeLaval is digitalizing the dairy farm industry with improved process automation, sensor technology and decision tools that help farmers feed, monitor and maintain their animals while managing their farms for productivity and protability. As Business Manager Fredrik Karlsson explains, devices integrated into the production line measure the content and amount of milk each cow produces, recording this data into the on-farm system. Feed stations read RFID tags attached to the cows ears and dispense the correct amount of feed. At the same time, the system measures if the cow is eating as it should; if not, an alert is issued. Using the data and decision tools, a farmer can make adjustments to better manage the variable cost of feed, which of course impacts expenses and protability. DeLaval activity meters track the movement patterns of each cow, while sensors in milk-collecting devices measure hormones and enzymes to detect fertility and health issues. A bio model in the on-farm system analyzes the data to help farmers manage their herds reproduction and health more effectively. We are not only recording raw data, but analyzing it and providing useful and tangible tools for farmers to work with, says Karlsson. Karlsson adds that DeLavals digital dairy farm offers farmers higher yields and lower labor hours per cow/per year. Farmers can remotely monitor all activity from a mobile device and make data and reports accessible to productivity performance consultants such as veterinarians and nutritionists. The on-farm system can also connect with stakeholders such as investors and regulatory agencies.
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Case Study
DeLavals more productive and protable digital dairy farms (continued)

According to Karlsson, the next step in DeLavals development would be to provide investors and multifarm farmers with a reporting application that lets them monitor accumulated data and KPIs across all of their farms and drill down not only to a single farm but also to a particular cow. Both investors and farmers could use such a tool to benchmark an operations performance against peers. Our work on digitalization helps farmers lower the inputs into dairy farming and increase the yield of each cow, in an animal-friendly and sustainable manner, says Karlsson. Were making farms of any size more productive, saving them time and labor and increasing their protability. Based on an interview with, and material from, Fredrik Karlsson, business manager, DeLaval, October 2012. (See an expanded version of this case study on the Executive Programs website.)
CIOs plan to improve ITs ability to hunt for digital innovation while harvesting business value from current operations
As CIOs continue to amplify the enterprise with digital technologies while improving IT organizational structure, management and governance, 2013 promises to be a year of dual priorities. The CIO IT strategy rankings in the gure opposite reect the realities of dual business priorities and conrm the need to expand ITs ability to hunt for new opportunities and harvest current business value. CIOs recognize that ITs value contribution comes from delivering business solutions; they also recognize that the prioritization and delivery of specic results must change.
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2013 top 10 global CIO IT strategies reect the need for CIOs to tend, hunt and harvest simultaneously
CIO IT strategies Ranking Delivering business solutions Improving IT management and governance Improving the IT organization and workforce Reducing the cost of IT Consolidating IT operations and resources Expanding the use of information and analytics Implementing mobility solutions Implementing business process improvements Improving business alignment and relationship Developing or managing a flexible infrastructure *New response category Ranking of IT strategies CIOs selected as one of their top 3 in 2013 2013 1 2 3 4 5 6 7 8 9 10 2012 1 5 10 2 8 4 7 9 6 3 2011 2 4 6 3 5 7 18 8 10 1 2010 1 6 10 3 9 7 * 4 2 8 2009 3 4 8 2 9 10 * 5 1 11
The ability to make and keep multiple commitments is critical to digital innovation; it is equally critical for CIOs to deliver on their IT strategies. This requires executing a combined strategy based on tending, hunting and harvesting roles. How CIOs lead in changing ITs capabilities, capacities, and prioritization and execution of strategies will determine the future of their organizations. Praxair, a global industrial chemical and supply company, reects the depth of change required for IT to become a better hunter and harvester. Case Study
Praxair is creating an IT organization that hunts and harvests at a global level

U.S.-based Praxair is one of the largest industrial gas companies in the Americas. The company produces, sells and distributes atmospheric, process and specialty gases, as well as high-performance surface coatings. Praxair had 2011 revenue of $11 billion, employs 26,000 worldwide and operates in 50 countries.
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Case Study
Praxair is creating an IT organization that hunts and harvests at a global level (continued)
When Vice President and CIO Marc Franciosa joined Praxair, the IT organization was highly decentralized. He has restructured IT into business-facing teams that are based by geography and supported by centralized, global delivery engines embracing infrastructure, ERP, collaboration applications, the program ofce, strategy and security. The teams support both existing and growth markets. In geographies with static or declining growth, they drive productivity by restructuring and adding efficiencies; in new and growth markets, they often replicate productivity best practices but have leeway to be innovative. We help drive all these initiatives, explains Franciosa, but we really want them to be led by the business. Praxairs annual revenue has grown steadily since 2005 from about $7.5 billion to $11 billion. Precisely how does the IT organizational structure help support this? Franciosa studied the rigor, resources and lessons learned in Praxairs mature geographies to fully understand the business models and then used them to support high-growth environments. Replicating solutions is a big part of our success over the last couple of years, he says. Its allowed us to focus resources, concentrate a little less on cost constraints and drive growth in certain geographies. Franciosa adds that solutions dont just happen to be replicable theyre designed that way. For example, all business cases must have applicability outside their geography of origin. Moreover, to optimize a process and develop best-in-class metrics, the IT teams incorporate lean and value stream principles while working closely with business process owners. Thus, rather than go with a quick, local solution, they vet a project for global applicability. If the benets could extend beyond the original locale, the solution moves forward and is eventually replicated on a global scale.
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As an example of Praxairs replication thinking, Franciosa cites recent changes in Brazils medical oxygen regulations, which now include full traceability, lot and batch control, and serialized tracking akin to European regulations. We were able to accelerate implementation by using an existing European solution, he says. That gave us a huge competitive advantage over our local competitors, who had to meet changing compliance issues by starting from scratch. Still, Franciosas business-driven IT organization did not come easy. This was a huge cultural change for us, he says. Before his arrival, IT was organized into geographically dispersed teams that ran everything from strategy and ideation, to the solution-building process, to running and managing the solution. Now his business-facing IT teams focus on ideas and business strategy, and they use Praxairs internal global delivery engines to execute and run a solutions back-end aspects. Franciosa staffed many of the business-facing teams with people who had business process roles, or roles that would make it easy to tap into the business population. Because the teams center on business processes, priorities and strategy, they are less technical than is the norm in IT. Taking a different approach to talent sourcing, Franciosa partnered with HR to build solid talent pipelines. Rather than repeat a sourcing strategy in every country, they focused on a couple of key geographies. Global teams are a lot easier to staff in one geography than all over the world, says Franciosa. We take our talent-sourcing strategy very seriously and discuss it at every leadership meeting. Its not something that we only do once a year. Based on an interview with, and material from, Marc Franciosa, vice president and CIO, Praxair, September 2012. (See an expanded version of this case study on the Executive Programs website.)
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3 CIOs mUst HUNt aNd HaRVest
Traditionally, the CIO role has concentrated on tending to IT operations. However, the world has changed and IT must adapt by extending its role in the enterprise. Hunting and harvesting entail new attitudes and responsibilities for IT that reect the realities of digital business. CIOs, therefore, have three tasks today: Tend to the legacy, hunt for new digital business opportunities, and harvest value from business process changes and extended products/services.
From tending the garden to hunting and harvesting

The CIOs role has traditionally been to nurture IT services and their infrastructure in service of business processes, and then to execute discrete projects aimed at replacing legacy systems or fullling new needs identied by the business. The business value created from this paradigm is further automation, integration and standardization. This tending the back ofce approach leaves gaps in two areas: Proactively identifying business opportunities based on new digital capabilities and realities (hunting) Extending value from existing information and technology investments (harvesting) Taking on a greater hunting role benets the business in nding and acting on disruptive digital opportunities and threats early and often, as follows: R eimagining business models based on the Nexus of Forces (i.e., mobile, big data/analytics, social and cloud) C reating new digital edge capabilities using different combinations of physical and digital resources I dentifying threats from nontraditional areas based on digital capabilities (what American companies Borders and Kodak failed to do) xploiting trends to enrich the customer experience, serve customers better, target new customer E groups and enter or create completely new businesses based on digital capabilities
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Similarly, the value of harvesting comes from continually tuning existing digital assets, not just for improved IT efciency and effectiveness, but also to serve the evolving needs of the business and its customers.
Stepping outside the CIOs traditional comfort zone

As needs and opportunities evolve, more CIOs nd themselves leading in areas outside of traditional IT. In addition to their tending role, they are assuming responsibility for hunting for digital opportunities and harvesting value. Tellingly, 67% of CIOs today have signicant leadership responsibilities outside of IT, with only 33% having no other such responsibilities. This situation contrasts sharply with 2008, when almost half of CIOs had no responsibilities outside of IT (see gure below).
CIOS have multiple roles outside of IT

2013* Chief process officer Business strategy Customer service/call center Chief digital officer Shared-service options (beyond IT) Product development HR Finance Other No other responsibilities *Based on 497 responses 30% 27% 19% 18% 19% 15% 8% 7% 12% 33% 2008 30% 17% 9% N/A N/A 6% 5% 4% 10% 48%
CIO tenure with the enterprise is a signicant factor in gaining responsibilities outside of IT. The longer the tenure, including time not as a CIO, the more context and connections the CIO has for playing a broader role in the enterprise.
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Almost a fth of CIOs now act as their enterprises chief digital ofcer (CDO), leading digital commerce and channels. Though this nascent role varies in scope and style, it normally includes championing the digital vision for the business that is, ensuring that the business is evolving optimally in the new digital context. Mike Bracken left a CDO-like role at the Guardian Newspaper Group to become executive director of the U.K.s Government Digital Service, where he just spearheaded creation and publication of the governments digital strategy (see http://publications.cabinetofce.gov.uk/digital/). His role includes ensuring a holistic, cross-departmental digital strategy and helping accelerate the exploitation of digital trends for the benet of citizens and the functioning of government. Case Study
The U.K.s Government Digital Service goes digital by default

The Government Digital Service (GDS) of the U.K. was formed within the Cabinet Office in July 2011 and launched in December of that year in response to a report by Martha Lane Fox (appointed UK Digital Champion by the government in 2010). Tasked with transforming all government digital services, GDSs core purpose is to ensure that the government offers world-class digital products that meet peoples needs. As part of this mission, GDS supports a digital by default strategy for delivering government services and strives for the same digital experience that users have in their daily interactions with the giants of the Web. GDS Executive Director Mike Bracken is leading the government as a platform transformation, whereby citizens and government employees can quickly access government services and help evolve them to meet their needs. Bracken characterizes the change as follows: Digital services should be based on user needs. They are no longer part of the IT supply chain of public services. Instead, they are the public service for most users. That is the basis for the digitalby-default strategy. We are not transferring channels; we are recasting the use of technology in government services to gain the benets of digitalization. Digital by default means that we are not pursuing a multichannel strategy but creating digital services so good that all people who can use them will choose to use them. As part of this strategy, GDS has launched a unified government platform called GOV.UK (https://www. gov.uk/) that is open-source, mobile-friendly and platform-agnostic. Using HTML5, GOV.UK is scalable, hosted in the cloud and open to feedback. Bracken has found that proving the value of this digital strategy requires personal and team leadership. Drawing on his experience as director of digital development at Guardian News and Media, he is an active blogger (see mikebracken.com) and communicator regarding the strategy specically and digital technologies in general (each GDS project has its own blog, tumblr and/or social media profile). Concentrating on the top 25 government transactions by volume, he and his team have created a linked platform of government services based on a citizen perspective rather than the government structure.
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Most people who can use a digital service will choose that service if it is easy to use and can complete the transaction, Bracken says. This requires supporting the customers point of view and choices rather than relying on compliance through government monopoly power. Occasionally, Brackens team will develop and deliver a digital solution to government agencies to advance the digital-by-default strategy, but agencies always handle their mainstream applications and transactions. GDS concentrates instead on building digital solutions to support discrete citizen needs, and on integrating transactions with a bias toward supporting citizens in accessing information. The open-source architecture that GDS has created supports coordination across agencies and opens information to the public to foster development of future digital capabilities. With regard to information and openness, our long-term plan is to go wholesale, by which we mean exposing data and services to the public, explains Bracken. Noting that GDS is replicating its digitalteam model in other government agencies, he adds, Changing IT skills acts as a catalyst for strategic change. We need to bring the Web generation into government, and that means completely resetting the technology skills portfolio in government. Based on an interview with, and material from, Mike Bracken, executive director, Government Digital Service, U.K., September 2012. (See an expanded version of this case study on the Executive Programs website; see Brackens blog, titled Digital Transformation, at mikebracken.com.)
CIOs are becoming general managers

In accordance with the broadening scope of CIO activities, the CIO role is evolving, with 6% of CIOs now on their companys board of directors and 60% on the executive committee. The CIOs remuneration structure is almost indistinguishable from that of other CxOs (see gure below), and a third of CIOs are getting ready for their next role as a business executive.
CIO compensation structures mirror those of their C-level peers

Average CIO compensation structure Average C-level compensation structure
Salary 77% Corporate performance bonus 14% Departmental performance bonus 3% Stock/equity award 4% Other compensation 2%
Salary 72% Corporate performance bonus 17% Departmental performance bonus 5% Stock/equity award 5% Other compensation 1%
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The survey found that CIOs must address increasingly challenging business issues and the need to execute at speed. For example, in October 2011, Tunde Coker, CIO at Access Bank in Nigeria, had to integrate the technology and operations of Intercontinental Bank, a retail bank with 375 branches in Ghana, Nigeria and the U.K. over three times Accesss size. Working closely with Access Banks business change director, Coker achieved full IT integration by March 2012, running all key services off a single core banking platform, electronic channels and enterprise platforms. The 25 project teams that Coker managed handled everything from core banking to ATMs, payments, nancials and HR systems; simultaneously, they integrated staff and handled talent challenges in areas such as service management, core banking and data warehousing. Meanwhile, like other CIOs, Coker must deal with a changing world. He sees postmerger transaction volumes growing signicantly, and other needs, such as straight-through processing, social channels and big-data exploitation, on the horizon. Our two biggest challenges going forward are consistent stability and scalability, he says. (See the Access Bank case study on the Executive Programs website.)
Building the talent to hunt and harvest

Of course, adapting the CIO role is not the only skills challenge. The digital talent in the entire enterprise must evolve, too. CIOs feel that they have sufcient talent available in operational roles such as internal customer service and the help desk, IT nance and IT HR. However, they see a gap in key skills relating to digital technologies, such as enterprise architecture, business intelligence and analytics, security and risk management, and IT strategy and planning. For each of these skills, more than half of CIOs report a shortage of talent (see gure opposite).
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CIOs recognize the need to build talent in key areas

Enterprise architecture Business intelligence and analytics Security and risk management IT strategy and planning Application development Business process management Program and project management Business relationship management Infrastructure and operations Sourcing management Vendor management IT finance IT human resources Customer service/help desk 0% 25% 50% 75% 100% Skills gap has negative impact on business Skills gap has short-term impact on business Sufficient skills Do not know
Distribution of responses
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As CIOs and their enterprises take on more front-ofce digital challenges, other talent gaps will come more clearly into focus, such as digital design and social anthropology. CIOs must use a portfolio of approaches to address the talent issue. An increasing number see cloud strategies as a way to mitigate talent challenges, including Joan Miller of the U.K. Houses of Parliament. Case Study
Building the core of the business, and outsourcing to the cloud, at the U.K. Houses of Parliament
The Houses of Parliament of the U.K. consist of the House of Commons and House of Lords. Parliament examines government activities, makes new laws, approves taxation proposals and debates the issues of the day. The publicly elected Commons is responsible for nancial bills, such as proposed taxes. The Lords is an appointed house that complements the work of the Commons making laws, holding the government accountable and investigating policy issues. Parliaments IT strategy is to develop in-house skills for core business operations, outsource commodity business services to the cloud, and support mobility and BYOD (bring your own device). This is in line with a broader government initiative to increase accessibility and cost savings by making services digital by default. CIO Joan Miller focuses many of her IT resources on the parliamentary publication process a core business deliverable. Output from parliamentary meetings is published in documents distributed through digital media. Our strategy is to build a cadre of in-house developers of these systems to support a digital Parliament capability, says Miller. A major reason for keeping development of the publication systems in-house is that packaged software satisfying Parliaments unique demands has not been found. Security is a special concern, with measures being taken to ensure the integrity and validity of each authored document. As Miller explains, We need to control the words going into each document, and we need make sure we are the ones putting those words in there. Cloud sourcing is done to lower expenses while improving performance. With the cloud, says Miller, were buying resilience and better support and service. We dont have the scale in-house to provide the responsiveness our users demand in case of a system failure.
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She adds that the cloud boils down to a matter of cost, skills and staff. By outsourcing email and other generic services to the cloud, for example, Miller can not only improve service and support but also address the IT skills gap and retention issues. With the stiff competition in the IT labor market, she nds that people interested in parliamentary employment initially are quickly lured away by private companies willing to pay up to 30% more. Miller recognizes that CIOs and their IT organizations must become trusted business partners. Accordingly, Our IT strategy is based on facilitating mobility, connectivity and access to world knowledge for the Members of Parliament, she says. After the 2010 elections, her organization began deploying secure iPads and now supports BYOD for smartphones and tablets. With 50% of Parliament working almost exclusively in a mobile environment, Miller strongly believes that IT should provide the technical analysis, business advice and support mobile users need to securely access the data their jobs require. In recent years, Miller has attached business relationship managers to every department to improve business planning. Business units also manage IT projects with help from a business relationship manager, who handles scoping, planning and resourcing. Miller relies on secondments the temporary transfer of a worker to another position to bring people from other business units into IT. These individuals return to their BUs, Miller reports, as IT brand ambassadors. Based on an interview with, and material from, Joan Miller, CIO, Houses of Parliament, U.K., October 2012. (See an expanded version of this case study on the Executive Programs website.)
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4 IT Must Set Aside Old Rules and Adopt New Tools
In a world of change, it is concerning that a majority of CIOs, according to the survey, do not see ITs enterprise role changing over the next three years. IT rules regarding enablement, governance, alignment, organization, metrics, etc. created more than 20 years ago addressed automating and integrating business operations for cost reductions and efciency gains. IT needs new tools if it hopes to hunt for digital innovation and harvest raised business performance from products, services and operations. Without change, CIOs and IT consign themselves to tending a garden of legacy assets and responsibilities.
Business as usual keeps IT as usual

Rather than follow old rules, CIOs need to adopt new tools. There is no simple answer to why enterprises are leaving the full potential of technology on the table. The gure opposite, however, sheds some light by comparing CIOs at enterprises realizing different levels of technology potential. We nd it interesting that CIOs do not see enterprise demand for IT, the effectiveness of IT and enterprise strategy as major factors limiting technologys potential. As technology capability increases, so, too, does the criticality of an enterprises ability to adopt new technologies.
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Factors that keep the enterprise from realizing technologys full potential
Enterprise readiness for new technology Enterprise change management IT funding and budgets
IT skills and capabilities Enterprise realization of technologys potential Above 50% 50% Below 50%
Enterprise risk tolerance
Enterprise strategies Effectiveness of the IT organization Enterprise demand for IT 0% 10% 20% 30% 40% 50% 60%
70%
80%
IT funding, skills and effectiveness, important as they are, become even more important as an enterprise gains from technology. And CIOs who adopt a hunting role are twice as likely to work in high-performing enterprises than their tending or harvesting peers. Note that CIOs cannot hunt for future value unless they effectively tend and harvest current operations. CIOs who reect on these issues in the context of the past decade will clearly see that they are real, and that the rules and tools used to address them have not been effective. If they had been effective, then the issues would not be so prevalent now. In benets realization, for example, CIOs reported in 2010 that the techniques they used most often were the least effective.
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This is no ones fault, but it is everyones responsibility to x. Repeating the patterns of the past will only sustain poor performance. Executives cannot and will not wait for IT to get into the game. This rest of this section, therefore, looks at areas where new rules are needed to raise the benets of technology to the enterprise.
CIOs need to improve their game when it comes to the customer experience and growth
CIOs know they need to tend to current operations. Knowing where to focus hunting and harvesting efforts, however, is an open-ended question. According to CIOs in the survey, hunting and harvesting activities need to concentrate on the customer experience and nding growth opportunities. The gure below shows CIO rankings of eight drivers of organizational innovation. The percentages reect the number of times CIOs ranked each driver No. 1 or No. 2.
The drivers of organizational innovation and IT plans

Growth and new business opportunities Customer experience and service Operational requirements (cost, quality, capacity, etc.) Information availability and application Product and service augmentation Business process management Technology capabilities and capacities Governance, risk and compliance capabilities 0% 5% 10% 15% 20% 25% 30% 35% 40%
Percentage of respondents ranking the item No. 1 or No. 2
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Business process change emerges as the primary means of delivering results in these areas. Eightyfour percent of CIOs see the role of business processes increasing over the next ve years, but the nature of that importance is changing. Mobile, big data and social technologies all create new judgment task types of work that do more than push information through a workow or process. These factors are changing the nature of operations and value creation. Thus, in many ways, business processes have become an enabler just like generic IT. The process is no longer an end in itself but a means to unlock growth and customer experience opportunities. In the future, CIOs indicate that business process skills will be more contextual, and applied rather than generic. CIOs should, therefore, consider building domain capability in sales, marketing, supply chain, etc., instead of discipline competency in general skills. Multiquip, a midsize manufacturer and distributor of construction equipment, illustrates the power of applying mobile technology and analytics to harvest new business opportunities. Case Study
Multiquip creates mobile capabilities with limited IT resources

Headquartered in Carson, California, USA, Multiquip (MQ) is a wholesale distributor and manufacturer of world-class light-to-medium construction equipment, power generators and lighting for multiple industries. With distribution partners in Asia, the U.K., Latin America and Europe, MQs products and solutions are available in 70 countries. The company employs more than 400 and had 2012 revenue of approximately $350 million. A continuing downturn in the construction industry prompted MQs executive management to demand better decision making to gain a small edge in a highly competitive industry. Vice President IT Michael Hanken, leader of an 11-person IT organization and a developer himself, notes that spreadsheets just werent cutting it anymore. So he piloted a mobile decision-making program. Designed to increase sales and attract new customers, the program was rapidly adopted by the sales organization. Piloting mobile apps to increase sales effectiveness is one of the programs areas of focus. Because MQ has a complex discount structure and lacked a good tool for instant pricing and product information checks, the vice president of sales thought the iPad might hold the solution. Hanken and another developer ran with the idea and piloted an iPad app at low cost and in under 10 weeks. The complex user interface (UI) of the rst iteration, however, disappointed the vice president of sales. With input from sales users, Hankens team streamlined the UI to give users much faster access to the information they needed. Sales users now welcome the easy-to-use app, which provides real-time data, including discounts and product information, from the SAP system.
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Case Study
Multiquip creates mobile capabilities with limited IT resources (continued)

Hanken is looking for outside partners to help with the pilots next phase, which includes customer-facing apps for the iPhone and Android operating systems. We have to partner with a third party because we dont have the experience to do otherwise, he explains. We need to get the cost structure right and then either train our own people or hire somebody to do it in-house, if that makes sense. He adds that you have to step back and ask yourself: What makes a great mobile experience? You dont often think along those lines as a developer. Hanken concedes that developing apps and interfaces for a mobile audience is radically different than big system or Web development; the sales force adopted the mobile apps readily and are eager to add new capabilities. The sales team can now work up almost instantaneous quotes on their mobile devices, and metrics to measure the success rates of quotes are being developed. Hanken advises other IT executives to trust the user community and actively seek their input, since they are the nal consumers. With MQs executive management seeing the positive enterprisewide impact of this approach to mobility including enhanced competitiveness, the potential to be rst to market, raised brand awareness for hard-to-reach end customers, and the chance to grow without additional costly product development or a radical new business strategy Hanken believes the company will increase its investment in the mobile strategy. MQ released the rst iOS and Android customer-facing application based on this strategy at a large trade show in December 2012, and according to Hanken, it generated excellent feedback. How does he see the companys mobile future? He wants MQ to be known not only for great technology but also as a company that is easy to do business with. We want to be the little Apple of the equipment industry, he says. Based on an interview with, and material from, Michael Hanken, vice president IT, Multiquip, September 2012. (See an expanded version of this case study on the Executive Programs website.)
Building skills requires breaking old HR management habits

Having the right skills in IT is essential to its effectiveness and success. Leaders in IT effectiveness report an average skill score of 75% versus an average 48% reported by all other respondents. In section 1, we pointed out that the IT labor market is not up to the challenges facing CIOs only 8% found the labor market very effective, but CIOs at these enterprises engage the IT labor market differently. The gure opposite illustrates the difference between this group and the rest of the responses.
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Effectively leveraging the IT labor market means doing things differently

Other practices (e.g., dedicated IT HR) Partnerships, temps crowdsourcing Offshore outsourcing Onshore/near-shore outsourcing Recruiting IT people from the business Paying above-average salaries Recruiting IT people from other companies Internal training programs 0% 10% 20% 30% 40% 50% 60% 70%
See IT labor market as very effective All other respondents
CIOs who make the labor market work for them, rather than just accepting what it offers, work in two very different types of IT shops. Midsize IT organizations (500 to 1,000 people) account for a disproportionate part of this group. They adopt new rules that push the limits of traditional HR and IT HR, going against the grain as follows: Building IT from within instead of hiring IT talent away from other IT organizations Paying above-average salaries to attract and recognize key IT personnel Limiting the use of offshore outsourcing Recruiting people from the business at a slightly higher pay rate Having a dedicated IT HR organization rather than relying on common HR services
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CIOs report that their enterprise HR organizations are not particularly effective in supporting ITs resource needs across all levels of IT labor market effectiveness. They see the main reasons as HRs lack of expertise in the specialized IT skill market and frequent denial of ITs authority to do its own hiring. With the IT labor market so complex, adopting new practices is the only alternative for CIOs. In 2013, Gartner Executive Programs plans to publish a detailed report on the need for, and nature of, IT labor market reform. To summarize, IT organizations planning to actively hunt for digital opportunities and harvest operational results both possible only via transformation require a continuous ow of IT skills and resources. Rather than treating this as an HR challenge, CIOs who use the IT labor market most effectively do not separate IT skills from business results; on the contrary, they see the two as integrally linked. The case study on ADP illustrates how IT skills can play a major role in creating new products and services. Case Study
ADP merges IT and product development to change the customer experience

The USAs ADP (Automatic Data Processing) is one of the largest providers of business outsourcing solutions including HR, payroll, tax and benets administration. The company serves 600,000 organizations in 125 countries, including 80% of the Fortune 500 and 90% of the Fortune 100. ADP had FY2012 revenue of $10.7 billion and employs 57,000. When CIO and Corporate Vice President Product Development Mike Capone arrived four years ago, he found customers frustrated because they were having a different user experience for each product. ADP has since merged its IT and product development organizations to provide a better user experience. The company is also following a new talent management strategy to staff the merged organization and plans to fuel business growth using predictive analytics and by increasing access through mobile technology. Capone feels that ADP could not meet clients demands in a highly available and exible manner if IT and product development were still separate. The mission is to provide a fully integrated product suite that delivers a unied client experience. To accomplish this, Capone uses an organizational matrix. For example, a senior leader aligned with the small-business market sits on the executive committees of the business units but reports directly to Capone. This helps ensure close market alignment while still maintaining a One ADP experience. At the other end of the spectrum, one leader oversees all mobile development, working closely with the market-aligned development heads to deliver one mobile application shared by all the companys product lines. Capone reports that shifting from siloed R&D to leveraging integrated platforms for product development has not only beneted the client experience but also increased ADPs cycle times and time-to-market. If an idea cannot be brought to market within six months, it is usually shelved. The new organizational structure has reduced development costs, and the savings are reinvested in R&D to spur even more innovation.
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The reorganization has also changed incentive structures and leadership practices. Critical measures that include revenue generation, protability and client retention have replaced the key project criteria of former times: being on schedule and on budget. There was a time when the business could have a terrible year and IT still got great bonuses, says Capone. That didnt make sense to me. We needed to be tied to the business and our clients, so that our success is their success. He adds that this required ADP to change its IT talent-sourcing strategy. Theres a huge talent war going on, continues Capone, so weve gotten more exible and creative with our compensation models. The company as a whole has adopted a more equity-based compensation structure, even below the VP level (yet above a certain salary), in part to compete with startups. Meanwhile, leveraging collaboration technologies has created agile and very talented product and IT development teams comprising geographically dispersed professionals. Capone had shifted the focus of his own talent searches from B2B knowledge to B2C experience and skills. Our traditional audience has always consisted of practitioners such as payroll managers, he says. Now we increasingly communicate directly with the employees of our clients, and they demand a very consumerized experience. From Capones perspective, perhaps the biggest benet of merging IT and product development has been the ability to use data and predictive analytics to see across the enterprise. The analytics help sell new products, according to Capone; while clients value their own data, they increasingly want to benchmark themselves against others. Capone measures his organization on how successful it is at driving positive outcomes for the rest of the business. Dont start with how much money or how many people you need, he cautions other CIOs. Start with a dialogue with the business about their desired outcomes. Then gure out how to get there, and measure yourself on that. Based on an interview with, and material from, Mike Capone, CIO and corporate vice president product development, ADP, September 2012. (See an expanded version of this case study on the Executive Programs website.)
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Without new approaches, ITs role remains static and less strategically relevant
The need for new approaches reects ITs changing role in a digital world. CIOs who have not accepted a new world for IT see the next three years largely as a repeat of the last three in terms of ITs role and leadership. The gure below summarizes how all CIOs expect ITs enterprise role to change over the next three years.
Only a third of CIOs see ITs role outside IT changing over the next three years
Participation increasing Business strategy formulation Business strategy execution Digital business and digital channels Business innovation Product or service design and development Business process analysis and management Enterprise change execution Enterprise program and project management Mergers and acquisitions Postmerger integration No change in participation Participation decreasing Does not apply Leadership role Last 3 Next 3 years years 14% 19% 18% 22% 14% 28% 26% 41% 8% 18% 26% 34% 32% 41% 25% 44% 38% 51% 12% 24%
41% 38% 29% 41% 35% 36% 29% 27% 18% 15%
54% 56% 50% 52% 52% 56% 62% 66% 47% 46%
3% 5% 8% 5% 6% 7% 8% 6% 6% 9%
2% 1% 13% 2% 7% 1% 1% 1% 29% 30%
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With about half of survey respondents indicating no change in ITs role, CIOs risk painting themselves and their IT organizations into a stable but subtly less relevant corner. Accepting the stability of ITs current role reects a view of CIOs as tending to their own responsibilities and working within their own authority. Without change, CIOs cannot hope to gain the funding or skills to contribute to digital strategies. Breaking out of this role into greater involvement with the enterprise means adding hunting and harvesting behaviors to IT. The gure opposite and the other gures in this section identify growth opportunities in business innovation, strategy execution and business process management. These are the areas where CIOs should concentrate on acquiring new tools and skills. CIOs need to nd a new role in strategy formulation, mainly because peers view IT as a means of execution as opposed to a source of strategic value. Adopting new tools and setting aside old rules admittedly require uncomfortable changes, but these should nevertheless set the tone for the 2013 CIO Agenda. The reports nal section takes a comprehensive look at that agenda, recognizing that CIOs not only need to adopt new techniques, strategies and plans, but also must change or abandon other areas of interest to tend, hunt and harvest in a digital world.
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5 The 2013 CIO Agenda
The CIO agenda outlines the challenges for 2013 and the actions required for success. CIOs foresee a nite set of tasks that dene what they do new, undo, redo and choose not to do. These actions, and decisions not to act, reect the need to establish a new nancial, organizational and enterprise rationale for information technology.
CIOs anticipate signicant change over the next three years

In the crush of current responsibilities and challenges, it is easy to lose sight of broader trends and transformations. CIOs are in the midst of several signicant and structural changes in IT over the next three years. The gure opposite reects timelines for these transformations in the nature of the IT organization, in enterprise technology and in the enterprise itself.
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CIOs see signicant change for IT

2016 IT is no longer treated exclusively as a cost center 26% 33% 12% 29%
The enterprise goes 100% with laptop and mobile computing 8% 38% 17% 37%
The IT organization is replaced with a different construct 6% 40% 25% 29%
The enterprise stops providing personal technology devices 6% 32% 7% 55%
Applications make significant autonomous decisions 7% 24% 13% 56%
All critical applications and operations are sourced via the cloud 3% 25% 27% 45%
Business units develop, provision and operate technology 11% 8% 7% 74%
Already there
By 2016
By 2020
Do not know when
According to CIOs, IT has come a long way: Almost a third of CIOs work in enterprises where IT is no longer treated as a cost center, with a majority expected by 2016. Consumerization and mobility continue to drive IT change: 46% of enterprises expect to go 100% mobile/laptop by 2016. These changes, however, will not happen on their own; they require CIOs to address fundamental strategic, funding and skill issues.
47
The 2013 CIO Agenda must deal with three interlocking issues: IT strategy, funding and skills
ITs digital aspirations demand that ITs current realities be addressed. IT has emerged from a decade of managing cost, risk, security, quality of service, etc. The digital world facing CIOs in 2013, however, is radically different than the one they have known for the last 10 years. Actually, 2013 harks back to 1997, inasmuch as the broad-scale adoption of digital technologies presents many of the same challenges as the adoption of the Internet. Now, as then, CIOs and IT leaders confront a changing technology model that entails corresponding changes in IT strategy, funding and skills. Again, as shown in the gure below, these are interlocking issues that require a coordinated response to convince the enterprise and the IT organization that the future needs to be different from the past.
Three interlocking issues determine ITs digital future
Strategy
Funding
Skills
48
The new agenda that CIOs need for the age of digital business goes beyond tending to current concerns and embraces the following principles: E xpand the strategic digital roles of the CIO and IT to establish new sources of relevance in a world where marketing, sales and the customer experience garner more investment and innovation, as well as attrition. Increasing ITs digital strategic relevance establishes the rationale for more IT funding (if its not strategic, why expect a budget increase?). nvest in digital IT by recapitalizing IT budgets that have been optimized to provide stable operations I at the lowest possible cost. A decade of doing more with less gives the enterprise more of the same IT at a time when it needs to be digitally different. Increased funding in support of strategic digital projects redenes the context for IT skills and capabilities. B uild a digital IT organization by creating a cadre of new IT professionals, since a lack of skills is a CIOs Achilles heel, limiting the IT capacity and quality essential to digital results. Moreover, without the right skills, CIOs cannot deliver on strategic objectives or generate a return on increased IT investments. Despite condence in their ability to execute against business strategies and priorities, CIOs recognize that the role of IT must change in response to a changing world. This is the reason for extending ITs role beyond tending to todays operations, to hunting for digital innovations and harvesting current value to produce additional results.
Tending, hunting and harvesting represent an expanded role for IT in the digital world
ITs role in a digital world is broader than its past role of tending to current operations and applications and realizing only a fraction of technologys potential for the enterprise. CIOs who hope to extend ITs role in the digital world, however, must add new roles and behaviors. While CIOs must hunt and harvest in the future, they still must tend to current concerns. This is where changing and expanding business and IT leadership practices and tools come in. CIOs recognize that they must set aside old tools and adopt new rules. They cannot simply add more items to the agenda; there is not enough IT capacity to start new things without stopping others. All this sets the context for presenting the 2013 CIO Agenda not just as a set of recommendations, but as an integrated approach dening do new, undo, redo and dont do elements. The gure on page 50 describes each element its goals, requirements and actions.
49
A comprehensive CIO agenda describes leadership in terms of a range of actions and goals
Action Do new Goals and context Innovation rests in what you do new. Leaders exploit new digital technologies, creating the capabilities needed to meet growth and efficiency demands a digital edge. Efficiency comes from what you undo. Digital value will come from new connections in processes, structures and roles. Leadership requirements Adopting new business and technology practices driven by digital performance. Leadership actions Doing new things results in the innovation required to become a digital enterprise across your business model, products, services, customers and operations. Undoing the past is not a failure; rather, it recognizes change. Liberate resources trapped in legacy operations and assets, and reapply them toward growth and results. Redoing strategies, practices and metrics refreshes IT and reinvigorates its value potential. Recognize that new realities demand new leadership to drive excellence. Choose where to invest and how to implement. Dont dos must reflect the business strategy decided collaboratively, communicated broadly and integrated into governance.
Undo
Undoing historical and legacy commitments to create new business models in IT and the business.
Redo
Effectiveness rests in what you redo. Every business practice, solution and strategy requires revision and extension. Without both, ability becomes fragility and failure. Secure success by what you choose to not do. Success rarely lasts when you follow the pack, blindly apply best practices, attend to false signals or surf dead-end trends.
Redoing and upgrading practices and tools for the digital world to extend current strengths into the future.
Dont do
Stopping the use of practices that are no longer effective, liberating resources, time and attention for new challenges. (Do not assume that tomorrow you will need everything you have now.)
Recommendations to consider in evaluating the 2013 CIO Agenda

As we said at the outset, CIOs face a complex future, caught between current operations and future digital opportunities. Since creating a future for IT in a digital world requires doing new things, redoing past practices and undoing what is not working, the recommendations in the gure opposite address the critical issues of expanding the roles of the CIO and IT in digital strategy, investing in digital IT and building a digital organization. Use them to guide your 2013 CIO Agenda and future plans.
50
Recommendations for a CIOs 2013 agenda

Action Do new Expand the strategic digital role of the CIO and IT Concentrate digital technology on growth and customer experience transformation (hunt). Build a positive relationship with the marketing and sales organizations (harvest). Explore how digital technology drives business model innovation (hunt). Invest in digital IT Connect digital technology with changes in business performance such as revenue, customer engagement, etc. (harvest). Hunt for digital opportunities and innovations rather than waiting for the business to initiate new ideas (hunt). Concentrate on digital deployment and benefits realization to establish ITs digital business credibility (harvest). Dont plan future funding requirements based on past performance, which starves innovation opportunities (tend). Treat all IT projects and funding with equal importance (tend). Build a digital IT organization Actively build digital skills internally by accepting a learning curve on internal resources (harvest). Recruit domain-specific resources such as marketing, customer service, etc. (hunt). Demonstrate ITs digital relevance by highlighting ITs digital skills, capabilities, projects and success (harvest).
Undo
Undo the CIOs and ITs passive role in strategic planning (tend). Undo overly conservative approaches to risk management and the use of risk to stifle innovation and experimentation (tend). Use information and analytics to re-establish ITs relevance with front-office organizations (harvest). Reduce administrative barriers to accessing enterprise information across digital solutions (tend). Increase ITs direct exposure to customers to build contextual awareness and success stories (harvest). Dont assume that IT cannot change the status quo (tend). Dont accept that implementation, operations and management are ITs only roles in digital strategy execution (tend).
Undo technical silos in the IT organization (which limit flexibility) in favor of more-fluid project assignments (harvest).
Redo
Establish technology and Redo technology business and innovation as board-level investment cases to account for issues outside of the IT audit the top line and customer committee (hunt). impact (harvest). Base IT investment priorities and Re-engineer IT processes and practices to minimize timeschedules on time-to-market to-market (harvest). rather than resource availability Redefine the relationship with (hunt). HR to better account for unique IT jobs and skills (tend). Dont equate tending, hunting and harvesting roles with run/grow/transform budgeting (tend). Dont lose sight of current operations, costs and quality, as they are the foundation for relevance (tend). Dont assume that meeting digital technology requirements is as simple as reprioritizing IT projects and priorities (tend).
Dont do
51
CIO success requires working with an expanded and integrated set of tools. Tending, hunting and harvesting reect the range of IT activities and investments required to deliver on business priorities. CIOs must integrate these activities into an expanded view of the IT organization. The gure below illustrates the integration of these roles with IT investment plans based on the run/grow/transform framework.
Extend IT roles and integrate them with IT budgeting

Tending Run Operations, activities, resources and funding involved in current steady-state operations; these resources deliver quality of service at a managed cost. Hunting The resources required to operate an innovation and experimentation capability; these could be emergingtechnology labs, research, partnerships or innovation spaces and teams. The requirements and challenges that shape the innovation agenda for the enterprise, including the experiments, pilots and prototypes for exploring new solutions, products and offerings; these activities drive the pipeline of growth and performance transformation solutions. Scaling new ideas for the enterprise, customers and markets; these activities encompass the internal transformations required to incorporate innovation into core enterprise operations so that growth, value and customer experience goals can be met. Harvesting The resources and funding that support core transformational capabilities, such as enterprise PMO, Six Sigma or lean teams, deployment or benefits realization. Extending current applications, solutions and information to meet changing business strategies and needs; these activities comprise the majority of IT projects and investments that strengthen the businesss efficiency and effectiveness.
Grow
Investments required in support of demands for increased operational capacity (servers, storage, devices, etc.); these activities maintain and enhance systems that support future quality of service, capacity and compliance needs.
Transform
The resources and funding involved in changing the operational performance profile of IT; virtualization, application consolidation, standardization, etc., reflect transformation activities that raise technical performance.
Conducting the transformation program, marshaling associated resources, securing funding and building the business case; these are the resources and activities that change business processes and applications, and raise business performance.
52
Gartner Executive Programs research supports CIOs in their tending, hunting and harvesting activities. To provide additional support for the 2013 CIO Agenda, the gure below organizes certain existing Executive Programs reports into these three categories.
Gartner Executive Programs reports that support tending, hunting and harvesting
How to tend Managing Strategic Partnerships (June 2011) CIO Power Politics (Special Report 2011) Sustainable Enterprise Change (February 2012) Determining the Right Level of IT Operational Spending (October 2012) New Skills for the New IT (November 2011) The Customer Experience Is the Next Competitive Frontier (Late November 2012) Optimizing IT Assets: Is Cloud Computing the Answer? (February 2011) How to hunt Digitalizing the Business (April 2012) Business Model Innovation: Unleashing Digital Value Everywhere (July 2012) Masters of Innovation: What CIOs Can Learn From the Worlds Best Innovators (May 2011) The Game Changes in the Front Office (March 2012) Unlocking the Power of a Great Marketing-IT Relationship (August 2012) Selling Innovation to Senior Executives (November 2012) CIO Ambitions: Breaking Through the Silicon Ceiling (September 2012) How to harvest Capturing Business Value From Mass-Market Mobile Technologies (July/August 2011) Benefits Realization: The Gift That Keeps On Giving (September 2011) Restructuring Your Application Portfolio (May/June 2012) Business Capability Modeling Brings Clarity and Insight to Strategy and Execution (December 2012) Building the IT Brand: Impacting the Front Office and Beyond (October 2011)
53
The 2013 Executive Programs report agenda

The next three years (2013 to 2016) will be critical for the future of IT, and CIOs must lead ITs transformation for that future by building technology-based digital capabilities, roles and responsibilities. Rather than continuing past practices, CIOs must adapt and extend technology to gain the strategic relevance, funding and skills needed to be digitally relevant. Delivering on business priorities while addressing ITs quiet crisis requires more than moving money around, appearing to be more innovative, etc. How CIOs change themselves, their enterprise role and ITs abilities in the new and different digital world raises issues that demand answers. The 2013 Executive Programs Report Agenda, outlined in the figures opposite and on page 56, will provide support for CIOs and IT leaders, based on Gartner research, as they tend, hunt and harvest in a digital world.
54
The 2013 Executive Programs report agenda

Working title The Politics of Partnership Working description CIOs and IT executives strive to establish true partnerships with business peers but face a number of hurdles. Traditional practice suggests that performance builds partnership. The reality is more complex for the CIO, who needs relationships across a range of stakeholders and functions. What does being a partner mean for the CIO, and how can he or she build productive partner relationships? Innovation is hot, but what does it mean to be more innovative or to create a culture of innovation? Creating an enduring, sustainable innovation culture requires understanding the psychology of innovation at the corporate and personal levels. Understanding that culture is the focus of this report. Communicating ITs value and contribution has never been a great CIO strength. This report assembles the tools, techniques and case studies associated with building ITs identity in the enterprise. The success kit concentrates on creating cohesive marketing and communications strategies for building a strong IT brand focused on efficiency, effectiveness and agility. Leading IT requires a unique blend of organizational, project and technology management tasks. This report outlines the tools available to CIOs to improve and simplify the task of IT leadership, including governance, dashboards and other techniques. CIOs see skills as a critical issue for current and future success. However, the IT labor market is not working well enough to drive success. Acquiring, building and retaining skilled technology professionals are constant challenges that CIOs cannot tackle on their own. What are the changes necessary to get the IT labor market working efficiently and effectively? Culture is a powerful force, both organizationally and individually. Understanding the nature of cultural differences, the role of norms and the friction they create is the focus of this report. It features case studies on how executives surmount cultural differences, and it offers practices for integrating culture and organizations.
The Psychology of Innovation
The CIO Success Kit for IT Marketing
The IT Leaders Management Toolbox Reforming the IT Labor Market
Cracking Cultures A CIOs View
55
The 2013 Executive Programs report agenda (continued)

Working title End-to-End Business Process Management Working description Business processes define enterprise value creation and efficient operations. Technology in general and business process management technologies in particular provide the means to manage current performance and future flexibility This report concentrates on the intersection of BPM and IT, with a focus on identifying the return on investment for BPM. Information technology is changing dramatically and in ways not seen since the introduction of the Internet more than a decade ago. Understanding ITs future rests in part on understanding its past. This report looks at 10 years of CIO survey responses and the thoughts of CIOs on the future of technology in the enterprise and the organization we currently know as IT. As digital capabilities become more integral to all aspects of business, leading enterprises are creating digital business strategies in addition to, or sometimes instead of, IT strategies. This report outlines the scope of digital business strategies and the best practices for implementing them. Economic volatility and digital innovation change the nature of security and risk as enterprises look to be open and secure at the same time. Balancing these concerns requires new forms of leadership, since protecting customers, information, access and the enterprise cannot compromise future sources of innovation, results and revenue. It takes an ecosystem to deliver technology-intensive value in the digital world. Sourcing models originally created to manage cost and arbitrage global labor rates are giving way to new, more adaptive models. These models look at sourcing in a broader context, with an eye toward balancing current operational economics with future strategic opportunities. The ability of an enterprise to effectively execute its business strategy and the perceived value of the IT organization are highly correlated. This report examines how CIOs can help the enterprises they support improve strategy execution by integrating risk and performance management. The consumerization of technology is one of the most disruptive forces facing the CIO and IT, changing the nature of personal productivity and technology. BYOD was only the start. What does the future hold for a world where professionals have personal clouds, global mobility, individual social identities, etc.? This report looks at this post-consumer IT world.
IT 10 Years Back and 10 Years Ahead
From IT Strategy to Digital Business Strategy
Leading in an Environment of Tighter Security and Increasing Risk Adaptive Sourcing Models
Closing the Strategy Gap by Integrating Risk and Performance Management Post-Consumer IT
56
A nal word on the 2013 CIO Agenda

CIOs recognize that past stability is no guarantee of future success, particularly when the world has changed right from under IT. Adapting to and leading in the digital world requires doing things differently, yet in ways consistent with the demands of digital technologies. These demands shape ITs expansion beyond tending to current operations, to hunting for digital innovation and harvesting greater value from existing operations. All this sets the context for the 2013 CIO Agenda.
57
APPENDIX: ADDITIONAL DATA, DEMOGRAPHICS
Industry and regional CIO IT budget changes for 2013

2013 projected CIO IT budget change Industry Banking Communications and media Education Government Healthcare Insurance: healthcare payer Insurance: property and casualty Other Manufacturing and resources Retail Transportation Utilities Wholesale Geography North America Europe and Middle East Asia/Pacific Latin America Global -1.0% 0.4% -0.9% 1.6% -0.5% 0.0% 1.4% 2.6% -1.4% 0.0% 35% 32% 32% 35% 33% 41% 44% 43% 24% 42% 24% 24% 25% 41% 25% Weighted 0.3% -1.9% -1.0% 0.5% 0.3% -2.3% -0.1% -0.8% 0.5% -8.4% 8.4% -3.7% 5.6% Unweighted 2.4% 1.4% -0.3% 0.1% 2.7% 0.0% 0.9% 0.0% 1.7% 0.8% 5.6% -0.6% -14.1% Percentage of responses Increasing 39% 34% 24% 26% 41% 26% 40% 35% 37% 35% 49% 29% 31% No change Decreasing 41% 39% 54% 47% 38% 52% 36% 38% 41% 33% 34% 41% 36% 20% 27% 22% 27% 21% 22% 24% 27% 22% 32% 17% 30% 33%
Weighted CIO IT budget changes incorporate the size of the budget into the figure. Unweighted CIO IT budget changes are the average of each company regardless of budget size.
58
CIO IT budget projections by size of CIO IT budget

2013 projected CIO IT budget change Size of projected 2013 CIO IT budget < $5 million $5 million to < $10 million $10 million to < $25 million $25 million to < $50 million $50 million to < $100 million $100 million to < $250 million $250 million to < $500 million $500 million to < $1 billion > $1 billion Global Weighted -3.3% -1.3% 0.0% -0.5% 0.0% 0.3% 1.0% -1.6% -0.8% -0.5% Unweighted 0.7% 0.2% 1.7% 1.0% -1.0% 0.0% 3.0% -0.5% 0.4% 0.0% Percentage of responses Increasing 30% 36% 34% 31% 37% 34% 39% 30% 27% 33% No change Decreasing 44% 39% 42% 44% 36% 45% 34% 41% 46% 42% 26% 25% 24% 25% 27% 21% 27% 29% 27% 25%
Weighted CIO IT budget changes incorporate the size of the budget into the figure. Unweighted CIO IT budget changes are the average of each company regardless of budget size.
59
APPENDIX: ADDITIONAL DATA, DEMOGRAPHICS
Survey demographics: Geographic breakdown

5% 16% Percentage of respondents North America 44% EMEA 35% Asia/Pacific 16% Latin America 5%
44%
35%
Survey demographics: Company size by total revenue

10% 5% 7% 39% Percentage of respondents < $500 million 39% $500 million to $1 billion 15% $1 billion to $3 billion 21% $3 billion to $5 billion 7% $5 billion to $10 billion 8% > $10 billion 10%
21%
15%
60
FURtheR ReadiNg
Gartner Executive Programs reports

Aron, D., Business Model Innovation: Unleashing Digital Value Everywhere, G00235783, July 2012 Aron, D. and Smith, M., Benefits Realization: The Gift That Keeps On Giving, G00219567, September 2011 Colella, H. and Rowsell-Jones, A., Unlocking the Power of a Great Marketing-IT Relationship, G00236947, August 2012 Lehong, H. and McGee, K., Selling Innovation to Senior Executives, G00239148, November 2012 McDonald, M. and Aron, D., Amplifying the Enterprise: The 2012 CIO Agenda, G00230429, January 2012 McDonald, M., Rowsell-Jones, A. and Cole, J., Digitalizing the Business, G00233511, April 2012 McMullen, L. and Meehan, P., The Game Changes in the Front Office, G00232333, March 2012 Nunno, T. and Colella, H., CIO Power Politics, G00226256, Special Report 2011 Weldon, L., Burton, B. and Aron, D., Business Capability Modeling Brings Clarity and Insight to Strategy and Execution, G00246286, December 2012
Core research
Aron. D., Does Your Business Need a Chief Digital Officer? G00238298, 20 September 2012 Aron, D. and Raskino, M., A Comparison of the CEO and CIO Surveys Finds CIOs Must Elevate Their Focus, G00230121, 21 March 2012 Howard, C. et al., The Nexus of Forces: Social, Mobile, Cloud and Information, G00234840, 14 June 2012 McGee, K., Meeting the Information Needs of Enterprise Executives in 2023, G00239549, 12 November 2012 Prentice, S., The Future of the Internet: Understanding and Using the Trilemma Construct for Scenario Planning, G00234521, 13 August 2012 Raskino, M. and Lopez, J., CEO Survey 2012: The Year of Living Hesitantly, G00230141, 21 March 2012 Raskino, M. and Mahoney, J., CIO New Years Resolutions, 2013, G00246796, 11 December 2012 Van Decker, J., Top 10 Findings From Gartners Financial Executives International CFO Technology Study, G00234215, 16 May 2012
61
FURtheR ReaDING
Books
Bradley, A. and McDonald, M., The Social Organization: How to Use Social Media to Tap the Collective Genius of Customers and Employees, Cambridge, MA: Harvard Business Review Press, 2011 Brynjolffson, E. and McAfee, A., Race Against the Machine: How the Digital Revolution Is Accelerating Innovation, Driving Productivity, and Irreversibly Transforming Employment and the Economy, Kindle Edition, Seattle, WA: Amazon Digital Services, 2011 McDonald, M. and Rowsell-Jones, A., The Digital Edge: Exploiting Information and Technology for Business Advantage, Gartner eBooks, 2012 Waller, G., Hallenbeck, G. and Rubenstruck, K., The CIO Edge: Seven Leadership Skills You Need to Drive Results, Cambridge, MA: Harvard Business Review Press, 2010
62
GARTNER EXECUTIVE PROgRAMS REpORTS

Business Capability Modeling Brings Clarity and Insight to Strategy and Execution December 2012 The Customer Experience Is the Next Competitive Frontier Late November 2012 Selling Innovation to Senior Executives November 2012 Determining the Right Level of IT Operational Spending October 2012 CIO Ambitions: Breaking Through the Silicon Ceiling September 2012 Unlocking the Power of a Great Marketing-IT Relationship August 2012 Business Model Innovation: Unleashing Digital Value Everywhere July 2012 Restructuring Your Application Portfolio May/June 2012 Digitalizing the Business April 2012 The Game Changes in the Front Ofce March 2012 Sustainable Enterprise Change February 2012 Amplifying the Enterprise: The 2012 CIO Agenda January 2012 Apple: At the Vanguard of Change? December 2011 New Skills for the New IT November 2011 Building the IT Brand: Impacting the Front Ofce and Beyond October 2011 CIO Power Politics Special Report 2011 Benets Realization: The Gift That Keeps On Giving September 2011 Capturing Business Value From Mass-Market Mobile Technologies July/August 2011
GARTNER HEADQUARTERS Corporate Headquarters 56 Top Gallant Road Stamford, CT 06902-7700 USA +1 203 964 0096 Europe Headquarters Tamesis The Glanty Egham Surrey, TW20 9AW UNITED KINGDOM +44 1784 431611 Asia/Pacic Headquarters Gartner Australasia Pty. Ltd. Level 9, 141 Walker Street North Sydney New South Wales 2060 AUSTRALIA +61 2 9459 4600 Japan Headquarters Gartner Japan, Ltd. Atago Green Hills MORI Tower, 5F 2-5-1 Atago, Minato-ku Tokyo 105-6205, JAPAN +81 3 6430 1800 Latin America Headquarters Gartner do Brasil Av. Das Naes Unidas 12.551, 25 andar World Trade Center, Brooklin Novo So Paulo 04573-903 BRAZIL + 55 11 3043 7544
January 2013
Entire contents 2013 Gartner, Inc. and/or its afliates. All rights reserved. Reproduction of this publication in any form without prior written permission is forbidden. The information contained herein has been obtained from sources believed to be reliable. Gartner disclaims all warranties as to the accuracy, completeness or adequacy of such information. Gartner shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof. The reader assumes sole responsibility for the selection of these materials to achieve its intended results. The opinions expressed herein are subject to change without notice. 2013 Gartner, Inc. and/or its afliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. or its afliates. ITxpo is a trademark of Gartner, Inc. or its afliates. GARTNEREXECUTIVEPROGRAMS20130115

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Gartner Executive Programs

Hunting and Harvesting in a Digital World: The 2013 CIO Agenda

Gartner Executive Programs

aBoUt gaRtNeR eXecUtiVe pRogRams

Hunting and Harvesting in a Digital World: The 2013 CIO Agenda

Gartner Executive Programs

Gartner Executive Programs

ITs aspirations require addressing current realities

CIOs need a new agenda for digital business and beyond

CIOs must hunt and harvest

IT must set aside old rules and adopt new tools

The 2013 CIO Agenda

Hunting and Harvesting in a Digital World: The 2013 CIO Agenda

1 ITs Aspirations Require Addressing Current Realities

The quiet IT crisis

Gartner Executive Programs

Three interlocking issues determine ITs digital future

Hunting and Harvesting in a Digital World: The 2013 CIO Agenda

1 ITs Aspirations Require Addressing Current Realities

Realizing a fraction of technologys potential is no longer enough

0% Less than 50% 50% Greater than 50%

Gartner Executive Programs

1 ITs Aspirations Require Addressing Current Realities

CIO IT budget changes over the past 10 years

Gartner Executive Programs

The IT labor market is not delivering enough skilled professionals

The IT labor market works for one in four enterprises

IT labor market is effective Very ineffective/ineffective

My IT organization has the right skills

Hunting and Harvesting in a Digital World: The 2013 CIO Agenda

1 ITs Aspirations Require Addressing Current Realities

IT organizations are inexible

How sensitive is the IT organization to changes in business strategy or priorities?

The importance of extending ITs performance prole

Hunting and Harvesting in a Digital World: The 2013 CIO Agenda

1 ITs Aspirations Require Addressing Current Realities

Tending, hunting and harvesting complete ITs business value spectrum

Gartner Executive Programs

Coca-Cola Europe applies technology to create global enterprise value

Hunting and Harvesting in a Digital World: The 2013 CIO Agenda

1 ITs Aspirations Require Addressing Current Realities

Coca-Cola Europe applies technology to create global enterprise value (continued)

Gartner Executive Programs

The 2013 CIO Agenda rationale

Hunting and Harvesting in a Digital World: The 2013 CIO Agenda

2 CIOs Need a New Agenda for Digital Business and Beyond

Gartner Executive Programs

2013 top 10 global business strategies

Hunting and Harvesting in a Digital World: The 2013 CIO Agenda

2 CIOs Need a New Agenda for Digital Business and Beyond

Gartner Executive Programs

Digital technologies dominate the CIO agenda in 2013

2013 top 10 global technologies

Hunting and Harvesting in a Digital World: The 2013 CIO Agenda

2 CIOs Need a New Agenda for Digital Business and Beyond

17% Only mobile technologies

18% Both mobile technologies and big data/analytics

17% Both mobile technologies and social media

11% Only big data/analytics

8% Both big data/analytics and social media

21% All three technologies together

8% Only social media

Gartner Executive Programs

DeLavals more productive and protable digital dairy farms