CIOs are soon going to be an endangered species in the new digital business era, said Partha Iyengar, vice president and head of research, Gartner India. He was addressing the media persons at the Gartner Symposium/IT Expo 2014 in Goa.
“The CIOs’ role is increasingly threatened by digital business units that are acting as independent technology startups. Many of today’s digital businesses do not see CIOs as a credible business leader,” Iyengar said. He added that if CIOs continue to remain in their “tech cocoons,” business units are likely to bypass them. In a few years, the CMO is likely to have a bigger IT budget than the CIO.
Peter Sondergaard, senior vice president and global head of research, Gartner, said that only 15 percent of CEOs see CIOs as leaders of digital transformation. Besides, there is a dramatic shift in IT spending power. Sondergaard added that there is a shift of demand and control away from IT and toward digital business units closer to the customer.
“Thirty-eight percent of the total IT spend is outside of IT already, with a disproportionate amount in digital. By 2017, it will be over 50 percent,” Sondergaard said. “Digital startups sit inside your own organization, in your marketing department, in HR, in logistics, and in sales. Your business units are acting as technology startups.”
Gartner estimates that 50 percent of all technology sales people are actively selling direct to business units, not IT departments. Millions of sales people and hundreds of thousands of resellers and channel partners are looking for new money flows in the fluid digital world, and they are finding eager buyers.
The analysts also emphasized how the transformation to digital era is transforming the IT industry. “The impact that the digital business economy is having on the IT industry is dramatic. Since 2013 650 million new physical objects have come online. 3D printers became a billion dollar market; 10 percent of automobiles became connected; and the number of chief data officers and chief digital officer positions have doubled. In 2015, all of these things will double again,” said Sondergaard.
Gartner defines digital business as new business designs that blend the virtual world and the physical worlds, changing how processes and industries work through the Internet of Things.
The research agency believes that digital businesses will impact jobs in different ways. By 2018, digital businesses will require 50 percent fewer business process workers. However, by 2018 digital business will drive a 500 percent boost in digital jobs.
Three years from now, the hottest skills that a CIO must look out for will be smart machines, robotics, automated judgment and ethics. Iyengar said, “The new digital startups in your business units are thirsting for data analysts, software developers and cloud vendor management staff, and they are often hiring them fast than IT. They may be experimenting with smart machines, seeking technology expertise IT often doesn't have.”
“You must build talent for the digital organization of 2020 now. Not just the digital technology organization, but the whole enterprise. Talent is the key to digital leadership. Build credibility and build the two-speed organization,” he added.