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Born to be digital - how leading CIOs are preparing for digital transformation

A core set of digital technologies - mobile, social, the cloud and data - are transforming companies at both an operational and a strategic level. For leading CIOs, these present a major opportunity to expand their role. Learn more by exploring the CIO program report “Born to be digital”.

Born to be digital - how leading CIOs are preparing for digital transformation

  1. 1. Born to be digital How leading CIOs are preparing for a digital transformation
  2. 2. 2 | Born to be digital Are you ‘born to be digital’? Across a range of industries and geographies, digital technologies are transforming the way companies and their customers interact. At the same time, these technologies are releasing a wave of IT-led innovation, and creating new revenue and cost-saving opportunities. This seems like a natural process within internet companies, which are born digital, but the digital transformation is now spreading rapidly to enable organizations of all shapes and sizes to reinvent themselves. Dealing with the challenge of digital change requires an end-to-end response, building a comprehensive digital strategy, and rethinking the business and operating models. CIOs need to ask themselves, What will it take to stand out?
  3. 3. Digital-ready CIOs are typically more able to: ►► Reframe their thinking and present a positive story to the rest of the business about the future that technology can deliver ►► Proactively seek to create value, with strong engagement across everything from product innovation and operational agility to supporting decision-making ►► Carefully manage expectations, walking a fine line between keeping their businesses excited about the potential of IT, and keeping a realistic sense of what’s possible ►► Remain eager to keep developing their skills and capabilities Source: Born to be digital: how leading CIOs are preparing for a digital transformation, EY, 2014 In return, these CIOs reap the rewards: ►► Seventy-one percent of digital-ready CIOs strongly agree that their standing within the business has materially improved over the past three years, compared with just 54% of CIOs in IT-intensive industries overall ►► They are seen to hold better career prospects and are more highly regarded in the business ►► Sixty percent are able to influence broader company strategy, compared with only 45% of their traditional CIO peers ►► They are more satisfied in their job and how it is perceived externally Proactive and positive: how digital-ready CIOs make their mark Born to be digital | 3
  4. 4. Digital-ready CIOs vs. IT-intensive industry CIOs — distinctive traits Digital-ready CIOs have a strategic vision of how technology will transform the business — and know how to implement it By definition, all digital-ready CIOs have a clear vision about the future of their businesses. They have a powerful sense of how and where digital can transform product development or sales and marketing and open up new lines of revenue. Digital-ready CIOs place more importance on the close understanding of their market or industry (70% compared with 52% of IT-intensive industry CIOs). But digital-ready CIOs work hard to tell that story in comparison to IT-intensive industry CIOs in general. Eighty-seven percent of digital-ready CIOs focus on making the case for IT’s role in business transformation to the executive management team, compared with only 72% of IT-intensive industry CIOs. The digital-ready CIO also has the ability to deliver on their vision, drawing on: ►►An intimate knowledge of the firm’s business architecture ►►An ability to manage and drive complex implementation programs It would be easy to assume that CIOs in any IT-intensive industry — defined as spending above-average amounts on IT — would stand out. But this is not the case. Our research shows that truly digital-ready CIOs differentiate themselves in six distinct ways, and we profile the first three of these here. For more information visit ey.com/born-digital. IT-intensive Digital-ready CIOs industry CIOs Discussing IT's role in business transformation Discussing IT budgetary issues and infrastructure management 72% 73% 55% Providing facts as basis for strategic decisions 87% 78% 70% 5 Top three engagement areas with the executive management board 4 | Born to be digital
  5. 5. “ If you want to run the operations yourself, that is a huge management demand, so it will affect your abilities on strategy and innovation. You cannot do both.” Bruno Ménard, CIO, Sanofi Digital-ready CIOs move beyond operations and infrastructure Digital-ready CIOs do more to move beyond operations and infrastructure issues. They see these as foundational elements that should be run as efficiently as possible, freeing up their time for the more strategic aspects of their role. Many noted that traditional IT leaders appear to be no more than infrastructure managers. Instead, digital-ready CIOs have been placing more attention on other issues, such as enhancing business processes and preparing their organizations for change. Even so, they do not forget the operational elements — understanding that smooth operational running is what allows them to broaden their focus. IT-intensive industry CIOs Digital-ready CIOs 60% 45% Satisfaction with their ability to influence broader company strategy Born to be digital | 5
  6. 6. “ Digital-ready CIOs need to be Digital-ready CIOs are courageous risk-takers more innovative and risk-taking. But it’s a real change from the traditional way of doing things, where you argue for budgets, and fill in capital request forms with a business case and so on.” Tom Velema, EMEIA IT Advisory Leader, EY Finally, digital-ready CIOs must be brave enough to take a bet on emerging technologies. This involves a willingness to risk failure — an understanding that not all digital projects will deliver as hoped. CIOs must experiment widely to identify the biggest opportunities for the future. Tight budgetary pressures are often cited by CIOs as the reason why a new project can’t push ahead. But digital-ready CIOs are more often willing to find ways to turn such pressures to their advantage. While nearly all CIOs have these concerns, digital-ready CIOs are more willing to embrace risks. Equally, digital-ready CIOs place no greater emphasis on IT budgets and spending than IT-intensive IT-intensive industry CIOs Digital-ready CIOs 81% 64% 11 Bringing innovation to both the business model and the development of new products or services industry CIOs. Instead they recognize that their value is best realized by focussing on business enabling elements and identifying where operational IT savings can best be reinvested to innovate the business. 6 | Born to be digital About this report
  7. 7. Born to be digital | 7 EY’s Born to be digital: how leading CIOs are preparing for a digital transformation, published in spring 2014, surveyed over 180 CIOs, chief technology officers and subject matter experts from a range of industries that use information technology (IT) intensively. For the report, we spoke to representatives of industries with the highest average spend on IT as a percentage of total revenue. We selected businesses that spend a substantial portion of their budgets on IT because they are also likely to be investing in digital technologies. Through this, we strove to identify how the skills, approach and mindset of a traditional CIO1 would have to change with the digital transformation. Born to be digital spanned key global markets and focused primarily on large firms: 27% had annual revenues between US$500m and US$1b, and the rest were larger, including 20% with revenues of at least US$10b. From this sample, we identified and profiled a subset of CIOs in IT-intensive industries who focus the majority of their time on the most strategic elements of their jobs. We called these the “digital-ready” CIOs. This extract highlights just a few key findings from the full study. Download our executive briefing or a copy of the full report here: ey.com/born-digital. Born to be digital explores four core themes: Setting the scene: the rise of the digital business The DNA of the IT-intensive industry CIO About this report A mindset for change: six traits of the digital-ready CIO Are you born to be digital? Self-assessment for the leading CIO 1. “Traditional CIOs” or “typical CIOs” refers to CIOs in non IT-intensive industries as questioned for The DNA of the CIO, EY, 2012. This research is focused on the sectors identified as being most IT-intensive, in terms of annual spending on IT as a percentage of revenue. Those sectors include technology (including hardware, software and other IT services), financial services, life sciences, telecommunications, online and e-commerce. Visit www.ey.com/born-digital for further reading.
  8. 8. EY | Assurance | Tax | Transactions | Advisory About EY EY is a global leader in assurance, tax, transaction and advisory services. The insights and quality services we deliver help build trust and confidence in the capital markets and in economies the world over. We develop outstanding leaders who team to deliver on our promises to all of our stakeholders. In so doing, we play a critical role in building a better working world for our people, for our clients and for our communities. EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. For more information about our organization, please visit ey.com. © 2014 EYGM Limited. All Rights Reserved. EYG no. AU2717 EMEIA MAS. 1001338 ED None In line with EY’s commitment to minimize its impact on the environment, this document has been printed on paper with a high recycled content. This material has been prepared for general informational purposes only and is not intended to be relied upon as accounting, tax, or other professional advice. Please refer to your advisors for specific advice. The views of third parties set out in this publication are not necessarily the views of the global EY organization or its member firms. Moreover, they should be seen in the context of the time they were made. ey.com

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