Forward-looking CIOs are prioritizing the democratization of digital delivery across the enterprise to equip and empower CXOs or business leaders. The aim of this franchise model is to share tech leadership, co-own business and tech outcomes and co-deliver those solutions in a ‘fusion’ or agile team, while co-governing deployment to maintain safety.
According to Gartner’s 2024 CIO and Technology Executive Agenda, 16% of CIOs are already on that journey and 5% are in piloting efforts but not fully bought in, while 55% are ‘factory operators’, meaning the CIO’s team remains at the core of traditional IT function.
This goal of democratized tech leadership is shared by CXOs, who have high digital leadership ambitions and want to co-lead digital delivery. According to the survey, 80% believe digital leadership is part of their job and 86% strongly agree that they should be responsible for fostering technology-enabled innovation in their organization, although managing technology risks is not as much of a priority, with 58% believing their role is to limit cybersecurity and data vulnerabilities.
Gartner’s 2023 Strengthening CXO Digital Leadership survey found that on average, CXOs dedicate 21% of staff from their business areas to building, implementing or managing technology. However, CXOs don’t rate themselves highly in terms of digital competency and largely, are not ready to work with CIOs.
This is an area where system integrators like HCLTech can help improve digital or tech competencies in business areas through consulting services.
The most advanced organizations, when it comes to tech democratization, have digitally competent CEOs or CXOs who co-lead with IT.
Technology spending priorities
The aim of democratizing digital across business and IT is reflected by US CIO’s technology spending priorities.
In 2024, according to the same CIO survey, artificial intelligence and machine learning top the tech spending goals for 58% of CIOs, while low-code/no-code platform development is a focus for 49%. This suggests that CIOs are investing in technology that can be utilized outside of the IT department. Generative AI (GenAI) is a priority for 46%, but CIOs haven’t yet established their top use cases for this headline technology.
Low-code/no-code and GenAI will make the shift of technology from IT to business resources not just more possible but inevitable. Operating models must evolve in this environment and the balance of teams will change depending on platform or function.
Investments in cybersecurity (80%), business intelligence/analytics (78%), cloud platforms (73%) and AI and machine learning (73%) will increase. Interestingly, 43% will decrease investments in legacy infrastructure and data center technologies, which suggests US CIOs are closing on site data centers and are nearing the end of migrating data centers to the cloud. This is freeing up resources to invest in newer technologies and ushers in an era of innovation in cloud.
Shifting outcomes
With high inflation at the time of the survey, it is not surprising to see a reordering of the top outcomes or goals from a US CIO perspective. Growth was the number one priority, but factors such as global headwinds, ongoing supply chain challenges and talent shortcomings are driving cost optimization urgency.
In terms of meeting CEO or CXO expectations, US CIOs are behind with front office facing activities, such as asset utilization, revenue generation, customer experience (42%) and improving margins (42%). However, they are ahead of CEO expectations when it comes to compliance and minimizing risks and accelerating corporate development.
US CIOs have reported customer experience (CX) as a top priority for digital investments. Yet outcomes are failing to meet expectations, which suggests a lack of clarity of measurable business outcomes for why they should be improving CX.
Based on the report, it’s evident that IT continues to do their best work on internal initiatives, but too often, they are not a strategic partner for market facing initiatives. CX programs represent a perfect opportunity to align business and IT resources to collectively assess and address underperforming digital investments.
Closing the business and IT divide
The divide between business and IT remains a persistent challenge in the enterprise. However, certain factors are bridging the gap and leading to increased synergy between business and IT.
CXOs want change and over the last decade there has been an increase in technology investment from the business.
This has led to the rise of what Gartner calls the digital vanguard — CXOs who co-lead and co-resource digital delivery teams end-to-end with CIOs. According to the Strengthening CXO Digital Leadership survey, CXOs are twice as likely to hit their outcome targets from digital investments compared to other CXOs who avoid collaboration with IT.
Additionally, generational change is taking place in the workforce, with Gen Z and Millennials becoming managers. This will bridge the gap and this next generation of leaders will need to focus on outcome-driven metrics and shared business and IT outcomes, and accountability, to accelerate change.
Gartner’s CIO survey reveals that 63% of enterprise-wide digital initiatives meet or exceed outcome targets when CIOs embrace democratization and eliminate the business-IT divide by setting up franchise or co-lead models, compared to 43% for CIOs who take a more traditional approach.
For forward-looking organizations wanting to embrace a future of digital delivery and innovation, it’s clear that CIOs need to embrace a co-ownership, co-delivery and co-governance model that democratizes technology across the enterprise.
