CIOs in CEE Preparing for Digital Transformation - More than 50% will increase their IT budgets in 2016 in CEE region, according to the latest IDC survey
Executing change and transformation and improving business processes represents the top strategic priorities of CIOs in Central and Eastern Europe (CEE), according to an International Data Corporation (IDC) survey conducted among chief information officers attending IDC's 2016 CIO Summit in Vienna at the end of April. As the survey makes clear, CIOs are gearing up to drive their organizations’ digital transformation (DX) in the coming year.
All the elements for underpinning digital transformation are in place: investment priorities are geared to new technologies, budgets have been assigned, and – perhaps most importantly – more than 70% of CIOs see their role as shifting from that of an operational officer to DX officer/agent of innovation. More than 50% of CIOs in CEE will increase their IT budgets this year to reflect the need for DX spending.
Strategic IT Priorities — Change and Transformation
Already in 2016, 68% of specific IT purchases are initiated by Lobs, and business managers play a leading role in 54% of the IT projects. The increasing influence of business over IT strategy and investment agendas is resulting in the need to transform IT to become more agile and business driven. CIOs are ready to take the challenge and are preparing to embrace DX, even if the direction and the trajectory of the journey ahead is not yet precisely defined.
The strategic focus of the CIOs in 2016 is centered on driving the future business success of the company (change and transformation, improving and redesigning business processes, improving customer experience, new innovations), while the priorities of an IT department typically aimed at supportive roles (reducing IT costs, ensuring operational continuity, improving cost efficiency) are gradually left behind.
“CIOs are focusing on delivering business value with IT through transformation, innovation, and customer centricity. These are three defining characteristics of any digital transformation strategy that aims to disrupt or significantly transform current processes, products/services, and business models,” notes Zoltán Komáromi, co-head of research for IDC in CEE. “Not surprisingly, seven out of ten CIOs see their roles evolving to become digital transformation officers or chief innovation officers.”
Top 3 Investment Areas for CEE Leaders
The top investment areas in 2016 are related to leveraging enterprise data as a core asset of competitiveness, the use of digital channels such as the web and mobile apps, and the unavoidable investments in security and datacenters (42%, 46%, and 50% of the surveyed companies listed these as part of their top five investment areas, respectively). These solution areas are profiting from a redistribution of investment from IT infrastructure, particularly client and network infrastructure.
The focus in application investments is shifting from ERP and back-office processes towards the front end, as mobile applications, CRM, and SFA represented the areas with the greatest surge in the number of companies planning to invest significantly in them in 2016 versus 2015.
Perceptions of IT Trends — Green Light for Some, Yellow for Others
The underlying technologies of digital transformation, such as Big Data/analytics, mobile apps, security, private cloud, and industry platforms as a service are increasingly perceived as the most strategic emerging IT trends by CIOs in CEE. Likewise, smart operations, the Internet of things (IoT), and enterprise social collaboration clearly resonate with a sizable proportion of the CIO community.
However, quite a few of the technologies from the forefront of the current technology innovation wave, such as artificial intelligence, augmented reality, software-defined everything and 3D printing still have to demonstrate their business value to convince CIOs of large enterprises in CEE.
Budgets and the Role of IT in 2016
This year, CIOs appear to be equipped with larger budgets to drive change and reposition IT within their organizations, with 53% of companies expecting to spend more on IT than in 2015. Based on response patterns in our survey, it is safe to assume that expanded budgets will primarily be used for digital transformation and the closer alignment of business and IT, a reflection of the strengthening position of IT within the organization.
Some organizations, however, will face a double challenge: flat or decreasing financial resources coupled with rising expectations from lines of business. C-level managers in such companies regard IT as a strategic investment area, but not one that is decisive in terms of achieving business goals and competitive success. The onus on CIOs in such organizations is thus to demonstrate IT's ability to deliver greater business value.
IDC's CIO Summit in Vienna, April 20–22, 2016
IDC's 4th annual Vienna CIO Summit will host about 250 people, 130 of whom will be CIOs. Quite appropriately, the theme of this year’s Summit is “Rise of the Disruptive CIO”, and the more than two days of intensive networking, one-on-one meetings, small group talks, inspiring keynotes, and thought-provoking panel discussions will be underlined by a focus on the changing role and agendas of progressive decision-makers across the region.
IDC CIO Survey 2016 reveals current priorities and the changing role of the CIO