CEO Concerns 2014 - Business Gets Digital

CEO Concerns 2014:
Business Gets Digital

Hung LeHong
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Find the right growth target

Seize fresh investment
Educate your executives
Lead
L d the
th digital
di it l charge
h
2014 Gartner, Inc. and/or its affiliates. All rights reserved.

Lead
L d the
th digital
di it l charge
h
What's Top of CEO "To Do" Lists?
IT Is Directly Visible in Top

g Business Priorities for 2014/15
Strategic
Growth
Cost management
Profit improvement
Priority
1st
2nd
3rd
4th
5th
IT related
Customer related
Workforce related
Product improvements
Financial
"What strategic business

priorities will your organization
address in the next 2 years?"
Efficiency & productivity

Innovation, R&D
GRC
0%
n = 410 CEOs and Sr. Business Executives
20%
40%
60%
80%
Top Business Priorities 2014 vs. 2013

Tuning Adjustments, Not Big Changes
64%
Growth
Cost management
22%
Profit improvement
22%
IT related
21%
20%
Customer related
17%
Workforce related
Product improvements
11%
Financial
10%
Efficiency and productivity
9%
Innovation, R&D
8%
Governance, risk & compliance
7%
Sum of top
3 priorities
2014
2013
CIO "Heavy Lifting" Contribution to the Leadership Team:

Structure Their Growth Focus, Then Link IT Directly
y to It
Info., analytics
and big data
4%
"Organic"
10%
Market
share
10%
New
locations
(various)
25%
E-commerce
5%
Mobile and
m-commerce
5%
Cloud
5%
Digital, social
and online
27%
Sales
revenue
17%
General IT
improvements
54%
U
p
Unspecified
21%
"New
markets"
17%
Growth Focus
Categorized
(f
(fuzzy
and
d overlapping
l
i
concepts)
IT Focus
Categorized
(fuzzy and
overlapping concepts)
Business Improvement Focus Differs Between

CIOs and CEOs. You Need to Discuss This!
"Please allocate 100
CEO
percentage points
Growth/
between the following
Effectiveness
five areas to show how
Innovation
22%
your organization's
25%
expected focus
20%
for 2014."
23%
A bit
less
f
focus
here
Efficiency
22%
Comparison between Gartner 2014 CEO & CIO surveys

CIO
Agility
15%
15%
26%
A bit
more
focus
h
here
Integrity 16%
16%
Get aligned!
Most Growth Constraints Are External Factors

But Your Response to Them Is a Differentiator
80% of job seeking professionals use
their mobile. Are you "m-hiring"?
Did you know
k
even spacecraft
ft are
being crowd-funded these days?
20%
Any product can be digitally
re-mastered.
re
mastered. Put more D in R&D!
16%
13%
Long tail.
Ask your CEO about YOUR
biggest growth constraint.
11% 11%
9%
6% 6%
n
= 410
CEOs
& Sr.its Business
Executives
2014
Gartner,
Inc. and/or
affiliates. All rights
reserved.
"What are the two

most significant
factors acting as
constraints on
your company's
growth?"
g
5% 5%
4% 4% 3% 3%
3% 3% 3% 3% 3%
External macro trends.

opportunity
Technology opportunity.
Ageing
creates
t iti
opportunities
for many
industries
Technology
+ digital is
3rd
27%
mostt
important
12%
10%
9%
11%
6% 6%
n
= 410
CEOs
and itsSr.
Business
2014
Gartner,
Inc. and/or
affiliates.
All rightsExecutives
reserved.
"What are the two

most important
external macro
trends shaping
your business
strategy?"
6% 5% 5%
5% 4% 4% 4% 4% 4% 4% 4% 3% 3% 3% 3%
5%

Lead
L d the
th digital
di it l charge
h
Your
business
leaders
are more
than ready
y
to place
digital
bets
bets.
Investment Intention Changes

g for 2014
Decrease
No change
Digital capabilities 9%
Increase
43%
48%
Information technology 13%
37%
51%
R&D & innovation 12%
41%
47%
Product enhancement 8%
49%
43%
Sales 7%
53%
40%
Risk mgmt., legal & compliance 9%

Marketing
14%
People & culture 9%

Supply chain 10%
C it l equipment
Capital
i
t
Business services
16%
20%
Property and facilities 13%
56%
53%
63%
35%
34%
28%
65%
25%
55%
30%
52%
66%
29%
21%
n = 152 CEOs
CEO & Sr.
S Business
B i
E
Executives
ti
"Compared to fiscal year 2013, how will your organization's investments

in the following business areas change in fiscal year 2014?"
Digital
business ...
product
innovation
Investment Increases
Ranking statements
Year to Year
Agreement
(production readiness)
2012
2013
2014
Rank
Sales
Product enhancement
IT
P d
Product
enhancement
h
S l
Sales
Digital capabilities
IT
IT
R&D and innovation
People and culture
People and culture
Product enhancement
Risk, legal, compliance
Marketing
Sales
Marketing
R&D and innovation
R&D and innovation
Marketing
Capital equipment
Supply chain
Capital equipment
Property and facilities
Capital equipment
Business services
Business services
Property and facilities
People and culture
10
Supply chain not asked

Digital capabilities not asked
Business services
Supply chain
11
Di it l capabilities
Digital
biliti nott asked
k d
P
Property
t and
d facilities
f iliti
12
"Compared to the current fiscal year how will your organization's

investments in the following business areas change next year?"
Top Technology Investments,

Next 5 Years
Less than 20%:
Digital marketing
38%
E commerce
E-commerce
34%
Customer experience mgmt.
34%
Business analytics
32%
Cloud business
27%
Big data & data science
24%
Enterprise mobility
23%
Supply chain & traceability
22%
M-commerce
20%
Product cost analytics
20%
Enhanced business reporting
20%
"Which 5 technology enabled

capabilities
p
will be the most important
p
areas of investment to improve your
business over the next 5 years?"
Multiple responses allowed
Social organization/
mass collaboration
Sustainability
Business process
outsourcing
(Dynamic) business
process management
Electronic service
enablement
Location intelligence
Mass customization
E-discovery
Sensor networks/
Internet of Things
Pay as you go
Additive manufacturing
Gamification
Robot staffing
Neurobusiness
19%
19%
18%
17%
15%
11%
10%
9%
8%
8%
4%
4%
4%
2%

Lead
L d the
th digital
di it l charge
h
What is the real meaning of

"digital"
business?
What Digital Business Means to CEOs
What do you mean when you

think about "digital business"
i th
in
the context
t t off your
business and industry?
Gartner
CEO
senior
business
survey 2014. Large Cos., WW, n = 410.
2014 Gartner,
Inc. &
and/or
its affiliates.
All rightsexec.
reserved.
E-business +
D-business
Targeted
Marketing, Ecommerce,
brand
ebusiness
awareness
awareness
Online
customer
selfservice
Geographic
reach
Direct
selling
Security,
safety
Talent
finding
Mobilemarketing&selling
Multichannel
Digitalizedvaluechain
g
Customerintimacy
Distributionof
products,services
Gartner CEO and

senior business
executive survey
2014. Large
companies,
worldwide, 4Q
2013. n = 410.
Lagging
Product
advances
Virtual,
weightless
business
Cost
reduction
Media
Media,
content
Analytics&
decisioning
B2B
collaboration
Online/webbased,
general
What the
Wh
h term
"digital business"
means to CEOs
20th
Businessgrowth
Competitiveadvantage
Businessmodelchange
Automation
&productivity
Speed,
convenience
Paperless
information
flow
GeneraluseofIT,
computers
Communication
frequency,
scope
Irrelevant/
nothoughts
Improvement
2014 Gartner, Inc. and/or its affiliates. All rightsvs.analogue
reserved.
Mobile
devices,
general
Vague
Leading
M2M,
Internet
ofThings
Information
flowrelated
Cloud
computing
Digital
isdigital
C-business
Socialmedia
Enterprise
useofdigital
eratech.
Big
data
Whatt do
Wh
d you mean
when you think about
"digital business" in
the context of your
business & industry?
Management Teams Must Focus More on

Information as a Corporate Asset
We measure the
benefits that
each type of
information
asset generates
for us
33%
Our information
assets are well
cataloged
(inventoried)
and defined
22%
We quantify the
financial value of
our information
ou
o at o
assets, as if they
were a balance
sheet asset
24%
We do
not regard
i f
information
ti
as a kind
of asset
11%
"To what extent does your organization treat

information itself as a kind of corporate asset?"
Data is
the oil
of the
21st
century
y
010011010001110101
We directly
monetize
information
assets by
bartering with
them or selling
them outright
10%
Which companies do
CEOs most admire ...
for competing
with tech.?
Watch and Learn From the Top 15

1
5=
6=
3
7=
4=
"Which 'non-tech.' company do you

most admire for its ability to apply
IT-related or digital
g
business capabilities
p
for competitive advantage?"
Gartner CEO and senior business executive survey 2014 Large companies, worldwide, 4Q 2013. n = 410.
Admired Company Examples: Deep

Investment-led, Strategic Innovations
Business Sphere
"By eliminating the delay
of manually collecting and
aggregating data, this
patent-pending BI system
i
improves
productivity
d ti it and
d
collaboration, simplifies
work processes, reduces
decision-making cycle time,
and enables P&G to focus
on consumer innovation."
Drive thru. click & collect
Warehouse robots
Is one reason Tesco,

achieved $730 million in
online sales in the six weeks
to 4 January 2014, up 14%
on the
th previous
i
year. T
Tesco
took more than 3 million
online grocery orders, up
11%, and 1.5 million nonfood orders
orders, a rise of 25%
25%.
Drones might come

one day. But during
2013 Amazon
installed over 1,300
fl
floor
roving
i robots
b t
from Kiva Systems
a company it bought
in 2012. Subsidiary
Zappos has been
using them for years.
Lead
L d the
th digital
di it l charge
h
How Will Digital Tools and Culture

Change the Nature of Leadership?
Tag cloud generated from survey response data using Tagul.com.

License paid.
Impact of the Digital Age on CEO's

y
Leadership Style
No change
of style
14%
Style dinosaurs linked to

underperforming firms
No
answer
4%
55%
More
Communication
14%
More
Transparent
& Accountable
7%
Better informed
6%
29%
More
Impersonal,
Less Face to
Face
6%
16%
Long tail
of other
responses
41%
"What is the most significant way (if at all) that the digital age
has changed your leadership style over the last 5 years?"
Customer
interaction
4%
Decision
process-related
5%
Digital Business Innovation Is a Team

Game but CIO's Are No. 1 in Responsibility
CIO
CMO
B i
Business
U
Unitit L
Leaders
d
17%
19%
CTO
Chief Digital Officer
25%
19%
29%
Head of Innovation
20%
26%
Head of Sales
20%
27%
Head of Risk Management
21%
Chief Data Officer

Chief Counsel
Other Role
20%
26%
5% 1%
13%
7.3
4% 2%
5% 1%
23%
17%
7.4
1%
1%
1%
3% 3% 1%
"How
How will you allocate relative responsibility for leading digital innovation and
change over the next 2 years? (allocate 100 leadership points between roles)"
77
7.7
3% 3%
5% 3%
Chief Strategy Officer
8.4
8.0
4% 2%
30%
14%
92
9.2
5% 2%
32%
14.8
9.5
8% 3%
30%
18%
8%
9% 2%
28%
25%
16%
12%
31%
20%
CFO
COO
37%
70
7.0
1 to 9 points
6.6
10 to 24
4.6
25 to 49
38
3.8
50+
3.2
2.2
Avg.
Avg
points
Recommendations
CIOs
your business
Find the right growth target.

Discuss with CEO,, CFO and strategy
gy
head.
Seize fresh investment.

Change the tune. Propose business
investments including acquisitions
and new products.
Educate
Ed
t your executives.
ti
Offer digital tours. Drip feed content
into CEO, board and leadership
team meetings.
g
Lead the digital charge.

To lead the digital
g
industrial revolution
Start setting the digital business agenda,

increase the sense of urgency. Ask for
forgiveness not permission.
Recommended Gartner Research

CEOs and CIOs Must Co-Design the C-Suite for
Digital Leadership
Mark Raskino, Dave Aron and others (G00258536)
The Gartner Travel Guide to the First Digital Decade
L W
Lee
Weldon,
ld
JJeffrey
ff
Cole
C l and
d others
th
(G00255443)
CEO Advisory: Three Changes You Can Make to the
Way IT Innovation Is Framed
Mark Raskino and Jackie Fenn (G00250367)
The Digital Edge, Exploiting Information
and
d Technology
T h l
for
f Business
B i
Advantage
Ad
t
Mark McDonald and Andy Rowsell-Jones
(2012 e-book)
For more information, stop by Gartner Research Zone.
Methodology Record
Gartner conducted this research September to December, 2013 in order to examine CEO and senior
business executive views on current business issues as well as some areas of technology agenda
impact.
p
410 business leaders were q
qualified and surveyed.
y
The bulk of the research was achieved
online (368), an additional 20 surveys were conducted via telephone interview, and paper-based
documents. All respondents were screened for active employment in organizations greater than
$250M in annual revenue, excluding technology vendors.
The sample
p mix is as follows:
CEOs = 227 responses
CFOs = 93 responses
COOs = 31 responses
Chairman, President, BOD, or other C-level = 59 responses
B region:
By
i
North America = 154 responses
Europe = 114 responses
APAC = 117 responses
p
Brazil = 10 responses
South Africa = 8 responses
Middle East = 6 responses
The survey was developed collaboratively by a team of Gartner analysts who examine IT's role in
business and was reviewed
reviewed, tested and administered by Gartner's
Gartner s Research Data Analytics (RDA)
team. The results of this study are representative of the respondent base and not necessarily business
as a whole.
Survey Respondent Regions & Countries

28%
Europe
38%
N. America
1%
M. East
29%
APAC
2%
Brazil
2%
S. Africa
Responding countries
Survey Respondent Roles

CEO
55%
Other
14%
President, Owner,
President
Owner Sole Proprietor
Chairman
Board of Directors
Other C-level Executive
University Chancellor/President
COO
8%
CFO
23%

Survey Respondent Industries

Manufacturing
23%
Banking
22%
Business services
11%
Retail
Transportation
Other
Media
Utilities
Education
3%
44%
37%
5%
5%
%
4%
3%
2% 3%
Value chain position:
5%
3%
3%
13%
6%
4%
2%
Primary industry
56%
4%
Healthcare providers
23%
8%
6%
Natural resources
Wholesale trade
9%
5%
Multiple responses
11%
9%
Insurance
25%
B2B
B2B2C
B2C
Multiple responses allowed
Survey Respondent Company Size

Annual revenue:
$250M to
<$500M
13%
Number of employees:
$500M to
<$1B
19%
$10B or more
29%
$1B to <$10B
37%
MEAN = $12.6B

<1,000
25%
,
or
10,000
more
27%
1,000 to
9,999
48%
MEAN = 5,423 employees

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CEO Concerns 2014:

Business Gets Digital

Find the right growth target

2014 Gartner, Inc. and/or its affiliates. All rights reserved.

Find the right growth target

2014 Gartner, Inc. and/or its affiliates. All rights reserved.

What's Top of CEO "To Do" Lists?

2014 Gartner, Inc. and/or its affiliates. All rights reserved.

IT Is Directly Visible in Top

"What strategic business

Efficiency & productivity

Top Business Priorities 2014 vs. 2013

Efficiency and productivity

Governance, risk & compliance

2014 Gartner, Inc. and/or its affiliates. All rights reserved.

CIO "Heavy Lifting" Contribution to the Leadership Team:

2014 Gartner, Inc. and/or its affiliates. All rights reserved.

Business Improvement Focus Differs Between

Comparison between Gartner 2014 CEO & CIO surveys

Most Growth Constraints Are External Factors

"What are the two

External macro trends.

"What are the two

Find the right growth target

Seize fresh investment

2014 Gartner, Inc. and/or its affiliates. All rights reserved.

Investment Intention Changes

Information technology 13%

R&D & innovation 12%

Risk mgmt., legal & compliance 9%

People & culture 9%

Property and facilities 13%

"Compared to fiscal year 2013, how will your organization's investments

R&D and innovation

People and culture

People and culture

Risk, legal, compliance

Risk, legal, compliance

Risk, legal, compliance

R&D and innovation

R&D and innovation

Property and facilities

Property and facilities

People and culture

Supply chain not asked

n = 410 CEOs and Sr. Business Executives

"Compared to the current fiscal year how will your organization's

Top Technology Investments,

Customer experience mgmt.

Big data & data science

Supply chain & traceability

Product cost analytics

Enhanced business reporting

n = 410 CEOs and Sr. Business Executives

"Which 5 technology enabled

Find the right growth target

Seize fresh investment

Educate your executives

2014 Gartner, Inc. and/or its affiliates. All rights reserved.

What is the real meaning of

2014 Gartner, Inc. and/or its affiliates. All rights reserved.

What Digital Business Means to CEOs

What do you mean when you