Only 35 percent of board directors on track to reach digital transformation goals: Gartner

Over one third (35 percent) of board directors say that they have achieved or are on track to achieving digital transformation goals according to new research from Gartner.

Counteracting that, close to 90 percent of board directors say that digital business is embedded in all growth strategies, according to new research from Gartner.

Jorge Lopez, distinguished VP analyst at Gartner said boards of directors have reached a point where digital business strategy and overall business strategy are one and the same.

He said, “While CIOs have made significant progress leveraging technology for operational excellence, this is not enough to realise the strategic business benefits that boards of directors are looking for from digital investments.

“As enterprises increasingly operate in a world of constant disruption, the most future-savvy boards are considering how upheavals and risks can serve as a source of opportunity. CEOs and CIOs will need to adopt this mindset as technology plays an ever-expanding role in driving business success.”

Boards of directors cited CEOs as the primary leader responsible for driving digital business initiatives within the enterprise, selected by 28 percent of respondents. This is ahead of the CTO and CIO, cited as the primary digital leader by 19 percent and 14 percent of board directors, respectively.

Partha Iyengar, distinguished VP Analyst at Gartner said, “Historically, boards have looked to IT to lead a digital business.

“Yet given the macro and strategic benefits boards are now expecting from digital business, they now rightly expect to hold the CEO directly accountable for its success, similar to the accountability that CEOs have for enterprise revenue or growth.”

Boards are looking to invest in breakthrough technologies like AI and machine learning to drive business success. According to the research, 40 percent of board directors consider artificial intelligence (AI) and machine learning technologies to be imperative to digital business success in their organisation.

Board directors cited software enhancement as their second-highest priority among breakthrough technologies.

Lopez said, “Boards are seeking to modernise and enhance bedrock such as enterprise resource planning (ERP) and customer relationship management (CRM) tools.

“In practice they are often complex and rigid, when enterprises need agility and change.”

Risk-taking is a key component of digital acceleration. The survey found that 64 percent of board directors are planning to increase their risk appetite through 2024, climbing seven percentage points from the previous year’s survey findings.

Lopez explained that boards recognise that decision making in a turbulent business environment requires a higher level of risk.

He said, “This risk-taking ability is critical to competing at the speed of innovation.”

Many board of directors are also expanding their vision for digital business success to focus on a ‘digital economic architecture,’ with 71 percent of board directors reporting that they are pursuing or plan to pursue such an economic structure this year.

A digital economic architecture is the approach that non-digital enterprises can use to achieve similar economic benefits – including growth, profitability, market cap and brand value – as digital giants have achieved via their ‘born digital’ business models.