2 in 5 CEOs kick off digital transformation
An unsettled global political environment has not shifted CEOs' focus on profits and growth, cited as the top priority for 58% of CEOs in 2017, up from 42% in 2016.
Based on a survey of 388 CEOs by Gartner, product improvement and technology are the biggest-rising priorities for CEOs this year.
"IT-related priorities, cited by 31% of CEOs, have never been this high in the history of the CEO survey," said Mark Raskino, VP and Gartner Fellow. "Almost twice as many CEOs are intent on building up in-house technology and digital capabilities as those plan on outsourcing it — 57% and 29%, respectively.”
Gartner refers to this trend as the reinternalization of IT — bringing information technology capability back toward the core of the enterprise because of its renewed importance to competitive advantage.
Also, while the idea of shifting toward digital business was speculative for most CEOs a few years ago, it has become a reality for many in 2017.
Nearly half (47%) of CEOs are being challenged by the board of directors to make progress in digital business, and 56% said that their digital improvements have already improved profits.
"CEO understanding of the benefits of a digital business strategy is improving," said Raskino. "They are able to describe it more specifically. Although a significant number of CEOs still mention e-commerce or digital marketing, more of them align it to advanced business ideas, such as digital product and service innovation, the Internet of Things, or digital platforms and ecosystems."
Further, CEOs have also progressed in their digital business endeavors, with 20% now taking a "digital-first" approach to business change.
"This might mean, for example, creating the first version of a new business process or in the form of a mobile app," said Raskino. "Twenty-two percent are taking digital to the core of their enterprise models. That's where the product, service and business model are being changed and the new digital capabilities that support those are becoming core competencies."
Although more CEOs have digital ambitions, the survey revealed that nearly half of CEOs have no digital transformation success metric.
"For those who are quantifying progress, revenue is a top metric — 33% of CEOs define and measure their digital revenue," said Raskino.