The uncertainty of 2020 and the uneven recovery of 2021 have made clear the critical nature of secure digital revenue streams, and have put the CIO front and center when it comes to making sure the business has the digital capabilities it needs to survive.
“Organizational Agility: The Roadmap to Digital Acceleration” is a global report based on a survey of 1,024 C-suite executives and their direct reports from 14 countries and 12 industries. The report shows that IT and operations leaders are focused on data, processes, and productivity to enable agility at scale and drive digital acceleration. Like many CEOs, these leaders said data access drives productivity—unlike finance and HR heads, who pointed first to decision making.
The role of the CIO is of paramount importance during the “Great Acceleration” of digital transformation.
Four key findings emerged across all industries and roles:
Digital revenues dominate (and are accelerating). More than one-third of firms now expect that 75% or more of their revenue will come from digital within three years—more than three times as many firms as 2019.
Smart technology is driving digital growth. Organizations that are deploying artificial intelligence (AI), machine learning (ML), or robotic process automation (RPA) are more than twice as likely to report high levels of digital revenue as those that have made little or no progress.
Changing tools is easier than changing minds and habits. While more than half of organizations (56%) said their technology is compatible with digital transformation goals, just 16% said the same about their company’s culture. Adopting new technology to streamline workflows and help employees in their day-to-day roles is critical for boosting technology return on investment.
Agility builds resilience. One-third of leaders agreed that faster digital growth improves organizational resilience. For example, companies that rapidly responded to the pandemic are more likely to have embedded agile capabilities such as data accessibility and cross-functional collaboration.
The survey found that IT and operations leaders are prioritizing a corporate transition to a tech-savvy environment. IT leaders understand their role in leading this effort. The skill sets most valuable to the IT world are smart technologies (33%) and advanced analytics and data visualization (30%). Enabling data accessibility requires the technical skills of the IT and operations teams. Among firms reporting complete data accessibility, 53% said cybersecurity, privacy, and compliance enable that access.
Because 2020 left most of the business world panicking, it made IT and operations leaders understand the critical nature of secure digital revenue streams, according to our report. Now, 36% of firms think that 75% to 100% of their revenue will come from digital sales within the next three years. That’s three times as many firms as in 2019.
CIOs, COOs, and other IT and operations leaders play a crucial role in planning and implementing the right technologies. It would be impossible to sustain and grow digital revenue streams without the right knowledge, experience, and skill sets. IT and operations leaders also realize that integrating revenue-driven decisions into technology strategy can improve the organization's bottom line and overall efficiency.
To safeguard this shift toward digital revenue, 30% of all respondents said they will need to increase investment in technology to augment the workforce to ensure resilience in a future crisis.
When asked which capabilities make their digital transformations smoother, 45% of IT and operations leaders pointed to their cybersecurity, privacy, and/or compliance policies as best aligned with their objectives. Interestingly, only 16% of those leaders thought their corporate culture was the area that aligned best with their company's digital transition goals. As the numbers illustrate, there is still a lot of resistance, despite the obvious need for deeper engagement with the digital world.
Smart technologies are essential to resilience and adaptability in the face of unpredictable crises, and they also help accelerate digital revenue after the crisis is over. CIOs with a strong technology vision who take responsibility for the value technology brings to the organization—and not just deployment logistics—will help position the organization to achieve outstanding results.
Digital growth requires digital skills. Nearly 80% of business leaders agreed that access to relevant data encourages employees at all levels to make decisions. To make that data useful, organizations can embed capabilities such as continuous planning and agile metrics in everyday work processes. CIOs can lead the charge by selecting solutions that give everyone the right insights at the right time.
The good news for the CIO is that among all respondents, a majority saw IT as the department best aligned with digital transformation goals. On the other hand, organizational culture was the business area viewed as least aligned with digital transformation. While culture is typically not IT’s remit, this finding points to a disconnect between perceptions that digital transformation is a technology play and the reality that it requires alignment across the business.
To address this, CIOs can start by looking for opportunities to shift culture within their own lines of business. For example, IT and operations leaders we surveyed said that a heavy reliance on IT is one of the barriers to timely and reliable self-service data access. Digitally savvy technology leaders are working to get their own departments out of the way of data democratization.
And how do you coach non-IT savvy employees to feel confident enough to utilize tech on their own? IT and operations teams pointed to data access as critical for continuous planning. Over half (56%) of IT and operations leaders surveyed advocated a combination of clean, accurate, reliable data—along with data analytics skills (54%)—as key to unlocking agility.
The global outlook shifted continually throughout 2020. This forced businesses to pivot quickly and repeatedly. However, only 43% of the firms we surveyed said they take a continuous approach to planning. Among those that do, 50% said real-time data access enables them to do so. IT and operations leaders pointed to data, processes, and productivity as keys to scalable agility, while finance and HR heads emphasized decision making first.
As Olli Hyyppä, CIO of NXP Semiconductors, put it, “We are taking our first steps in predictive analytics by looking at what's likely to happen and then looking at whether we can prevent something from happening. It requires a different mindset because until now, we've had a reactive one.”
Leveraging digital leads to more agile alignment among organizational metrics and objectives, and higher workforce capability. CIOs play a central role in organizational agility, with 53% of all respondents saying that highly integrated systems have been beneficial in driving an agile approach to measurement.
Interestingly, IT and operations leaders were considerably less likely than CEOs to agree that access to relevant data encourages employees at all levels to make decisions. Though almost 90% of CEOs said data access encouraged decision making, only 76% of CIOs and COOs agreed. It may be that IT and operations leaders have more visibility than CEOs into how people actually use data and the challenges they face. Their viewpoints should be included in conversations about enabling a data-driven culture.
The role of the CIO is of paramount importance during what some are calling the “Great Acceleration” of digital transformation. The technology leader’s realistic view of IT’s function within a company positions the CIO to be innovative and agile in their approaches to increasing digital revenue and making the most of smart technologies. Those who continually plan, make data-driven decisions, and focus on adaptability will be best poised to usher their organization toward a digital future.
Read the rest of the report (available to download here) to learn more about how organizations are relying on their CIOs to digitally accelerate growth and agility in an ever-changing world.