Gartner tips rise of the chief digital officer

Gartner has urged Australian chief information officers to rethink their roles in the face of a new ‘chief digital officer’ position, expected to emerge in one in four organisations by 2015.

Peter Sondergaard's avatar kicks off his keynote presentation at the 2012 Gartner Symposium.

Analysts told this week’s Gartner Symposium that the industry faced a “nexus of disruptive forces” that would transform today’s workplaces and business models.

As cloud, mobile, social and data analytics technologies pervaded organisations, “every budget is an IT budget”, Gartner senior vice president Peter Sondergaard predicted.

“Digitisation of the enterprise is commencing as a result of the nexus [of those four technology trends],” Sondergaard said.

“Therefore, organisations will create the role of a chief digital officer as part of business unit leadership; a new seat at the executive table.

“They will be responsible for the digital business strategy.

“You will have to focus on how this changes your relationship with business unit managers, how governance of information and technology changes and whether we are on the verge of creating the next generation of integration problems.”

Gartner has described the chief digital officer as the executive responsible for customer-facing technologies and the digital head office, while the CIO oversees backoffice IT.

The city of Brisbane appointed its first chief digital officer in July, as part of a 19-year Economic Development Plan that kicked off this year. (pdf)

ASX-listed Westfield Group created its chief digital officer role in May, appointing Kevin McKenzie to lead its online and digital media strategy from an innovation lab in San Francisco.

But the chief digital officer role was still in its early days, Gartner vice president Dave Aron said, noting that the title was sometimes attributed to marketing executives in “a very limited and limiting view of the role”.

“In general, still probably only 5 percent of companies globally have chief digital officers,” Aron told iTnews at the Symposium this week.

“As far as I know, it’s very early stages for everyone but maybe even earlier in Australia.”

Innovating for a digital enterprise

Aron urged CIOs at the symposium to make a “thoughtful decision … on who takes leadership” for technology in a digital enterprise.

He expected some CIOs to absorb new responsibilities – such as for digital business strategies, digital products and integration – under a “CIO++” role.

Other CIOs might focus on backoffice technologies and lose responsibility for “game-changing IT” and related buying decisions, which would fall under the remit of a chief digital officer.

The chief digital officer could be paid “a lot more” than the CIO in initial years, as they faced the challenge of championing digital front office and head office concepts to the business, Aron suggested.

“We don’t think that there’s a right answer but the wrong answer is not formally deciding [on a digital leadership model],” he told the symposium.

Regardless of the title of a digital innovation leader, Aron urged IT teams to move beyond being creators of products to participate in other aspects of the innovation loop.

The innovation loop included the ideation, creation, engagement, offering, monetisation and adaptation of offerings.

Aron said technologies like mobile channels and big data analytics could be applied to various steps in the loop, and urged CIOs to examine new technologies from the perspective of a wider business model, rather than through the lens of existing systems and processes.

Predictions for the new year

Gartner expected Australian IT spending to grow 3.2 percent to reach $75.5 billion in 2013 – slightly lower than its global growth rate forecast of 3.7 percent, but higher than the average growth rate forecast of 1.4 percent in Europe.

The wider Asia Pacific region was expected to account for $US743 billion ($713 billion) of IT spending in 2013, up 7.8 percent from this year.

Gartner expected the region to spend a total of $US229.7 billion on devices – including PCs, tablets, mobile phones and printers – up 12.5 percent from the current year.

Data centre systems would account for $US28.6 billion in spending (up 9.5 percent), while software spending would rise 11.9 percent to $US33.9 billion, Gartner said.

Meanwhile, Asia Pacific IT services spending would grow 7.5 percent to $US91.5 billion and telecommunications spending would grow 4.8 percent to $US359.4 billion in 2013.

By 2014, Gartner said IT hiring in major Western markets would “come predominantly from Asian-headquartered companies enjoying double-digit growth”.

Analysts forecast the creation of 4.4 million IT jobs across the globe to support big data by 2015, including 960,000 jobs in the Asia Pacific region, although two thirds of the roles would remain unfilled due to a skills shortage.

“This is a time of accelerating change, where your current IT architecture will be rendered obsolete,” Sondergaard said.

“You must lead through this change, selectively destroy low impact systems, and aggressively change your IT cost structure. This is the next age of computing.”