Gartner Says Digital Disruptors Are Impacting All Industries

Digital disruptors are emerging in all industries, and the need for CIOs to embrace digital transformation is urgent, according to Gartner. In fact, once digital revenue for a sector hits 20 percent of total revenue, digital transformation can’t be stopped. Digital disruption has been seen in industries such as in books, clothing, and it’s beginning in other industries such as traditional grocery markets.

"Digital disruptors are doing two things: finding new opportunities, and attacking the weakness of incumbents. They serve unmet customer demand. They find ways to use excess capacity in the supply chain, exploit new platforms for awareness and marketing, and they also capitalize on new distribution channels," said Peter Sondergaard, executive vice president and global head of Research at Gartner. "Digital also exposes the weaknesses of incumbents.

However, Sondergaard said the incumbents are not sitting still. Many large, established companies are trying to rise above the competition. To better understand best in class practices, it’s important to develop enterprise-wide digital key performance indicators (KPIs). "Digital KPIs will become your enterprise compass, built into the performance objectives of every leader in the organization. These digital KPIs must measure leading, not lagging, indicators," Sondergaard said. "The large ecosystem players measure themselves by the number of registered partners in their ecosystem. You might measure how many ecosystems you participate in, and the conversion rates in each. Digital allows for deeper, outcome-driven measures, and they apply to all industries.

Gartner data shows that two-thirds of all business leaders believe that their companies must pick up the pace of digitalization to remain competitive. The new breed of CEO believes their companies must use technology to gain a competitive advantage. "That puts CIOs in the spotlight. You play a part in the digital transformation," Sondergaard added. "But it does not mean the exact same thing to every CIO. To meet the digital challenge, you must understand both what will be expected of you, and what you truly aspire to be.

Within the enterprise, on any given day, and with any given partner, the leadership the CIO provides may vary. There are three situational roles for the CIO that include: a partner CIO; a builder CIO; or a pioneer CIO. The IT Partner CIO is expected to operate in a more transactional way, with a focus on managing services, core IT, value for money, while also preparing for digital. The Digital Builder CIO  is designing and enabling new products and services, and working with others across the enterprise. The Digital Pioneer CIO is acting an entrepreneur, leveraging technologies to build new capabilities, new business models, and new revenue streams to achieve digital value and scale.

Looking ahead to 2018 and beyond, Gartner anticipates three high demand skills: Artificial Intelligence (AI), Digital Security and Internet of Things (IoT). "We believe that AI will be critical to solving both digital security and IoT challenges," Sondergaard said. "It will be an essential defense, creating a continuously adaptive risk and trust response. So, prioritize your investment in AI, beginning at the top with AI capable leaders.

Many enterprises will not be able to hire the people necessary in AI and security to drive digital transformation. There is a shortage of qualified candidates in these fields. CIOs will need to partner with their human resources organization to find a solution, and that will include leveraging AI.