• René Koets, Partner |

Digital leaders perform better: From market speed to customer trust

The digital leaders identified in this year’s Harvey Nash / KPMG CIO survey are putting clear water between themselves and their competitors. What are they doing differently and what might lie behind their success? We reveal how these leaders are outpacing their rivals in six key areas.

Now in its 21st year, the Harvey Nash / KPMG CIO Survey 2019 is the world’s largest technology leadership survey. With over 3,600 respondents from CIOs and technology executives across 108 countries, this year’s focus is on the definition and role of digital leaders. What makes them stand out from the IT crowd, and how do they use technology to deliver tangible business value?

A clear set of companies are differentiating themselves as digital leaders. How they are doing so is driven by a range of factors, including how balancing the risks of cyber security, data privacy and regulations, with the opportunities that disruptive technologies bring. And, crucially, how they work within their organizations to deliver real business results.

Interestingly, the companies that are winning are not simply asking IT to keep the lights on. Rather, their boardrooms acknowledge technology’s role in driving growth and reducing risk.

In short, digital leaders tend to be more effective at collaborating with other parts of the business to put technology in the hands of value creators. They also recognize the power of data, and have a relentless focus on speed and agility. We found that this makes their

  • time to market better;
  • customer and employee experience superior; and
  • operational efficiency higher.

Key conclusions

A new model of digital leadership: Digital leaders are the 30 percent of organizations that are very or extremely effective at using digital technology to advance their business strategy. They distinguish themselves in the way their boards and CEOs prioritize value creation over efficiencies; their technology leader / CIO is more likely to sit on the executive team.

Biggest budget increases for 15 years: We saw the largest proportion of organizations increasing their investment in technology this year. Even at enterprises that emphasize efficiency and saving money, investment is growing. The driving force behind much of this investment is cyber security, data analytics, AI / automation, and transformation.

It’s a time of massive change: Forty-four percent of organizations expect to fundamentally change their product/service offering or business model in the next three years. This is due mainly to digital disruption and the need to get closer to consumers. Transformation is becoming business as usual as enterprises look to stay ahead of the game.

Technology doesn’t stop evolving: Over three-quarters of organizations are investing in cloud computing, with almost half adopting it on a wide scale. At least one-fifth of organizations have at least small-scale implementation of internet of things, on-demand platforms, robotic process automation and artificial intelligence.

Up to one in five jobs will go to robots: Respondents expect AI and automation to replace around 10 percent of their company’s workforce within five years. For one-third of respondents, that figure rises to 20 percent. Over time, organizations that don’t invest in these areas can expect their cost base to be relatively higher than their AI-investing competitors. AI is expected to free up employees to perform work that requires more brainpower.

Relentless rise of cyber-crime levels out? We’ve been tracking the growth of cyber-crime for many years, nothing how confidence in dealing with the threat has been falling. We see the incidences leveling out for the first time this year, as confidence grows. The trend is subtle, but the size of our survey hints at it being more than a blip in the data.

The rise of business-managed IT: Almost two-thirds of organizations allow business-managed IT investment, and approximately one in ten actively encourage it. This requires a new relationship between business and IT. Those that get it right are likely to significantly outperform their competitors in a range of areas, from customer experience to time to market.

Ready for disruption: In 2019 so far, job fulfillment is up slightly, budgets have grown, and salaries have increased. But technology is disrupting the role. Executive board membership is down. An explosion in new job titles and roles has occurred, from Chief Digital Officer to Chief Data Officer and beyond. Successful leaders are swapping control for influence, and stepping up how they partner with the business.

Six key areas and questions aspiring digital leaders should ask themselves

  1. Market speed operating model: how well do we implement new technologies end-to-end across functions and geographies, and change ways of working to maximize the value from technology, including cross-functional teams (IT and business staff)?
  2. Dynamic investment: does my organization think like a venture capitalist? In other words, does it adopt a portfolio investment approach, leveraging lean financial processes and continuously fund technology?
  3. Modern delivery: does my business integrate core business systems with new digital solutions and bring a long-term product, rather than a short-term project, mindset to technology implementation?
  4. Flexible IT workforce: do I have a 360-degree view of the IT workforce, including business, technical and virtual skills, to create a flexible ecosystem of talent?
  5. Data as an asset: how well do we maximize value from the data we hold, and how effective are we at maintaining an enterprise-wide data management strategy?
  6. Customer trust: do we actively identify and manage the key security and privacy issues across technology development and operations, creating trust among customers?

Put simply, investing more money in IT is not enough on its own. I see this first-hand at many clients throughout Switzerland and beyond. The way the IT function operates must change significantly if IT is to play its full role in transforming the business and driving better performance across the board. This is something that digital leaders are already doing, and which will propel them further ahead of the competition.

Get the full Harvey Nash / KPMG CIO survey here.

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