EMEA Organizations Are Vulnerable If Business Conditions Turn
Even as digitalization is becoming pervasive among EMEA organizations, they remain vulnerable to turns, forces that create uncertainty and pressure for their CIOs, according to Gartner. 90% of EMEA organizations have faced a turn in the last four years, according to Gartner’s annual global survey of CIOs. With 2020 likely to be more volatile than 2019, CIOs must help their organizations acquire the capabilities needed to win when the next turn arrives.
“Simply being digital isn’t really going to cut it anymore. Forty-one percent of EMEA CIOs are already running mature digital businesses, up from 35% last year. It’s the coming turns that are the problem, not digitalization,” said Andy Rowsell-Jones, vice president and distinguished analyst at Gartner. “No one is immune from economic, geopolitical, technical or societal turns, which are likely to be more common in 2020 and beyond. These turns can take different forms and can disrupt an organization’s abilities in many ways.”
The nature and severity of the turns reported by CIOs varied widely. In EMEA, they included adverse regulatory intervention (41% of CIO respondents), organizational disruption (40%) and severe operating cost pressure (40%). Turns also weaken an organization’s ability to build its “fitness” muscles. 34% of EMEA CIOs said they were behind in the race to attract the right talent, 30% were suffering slowed or negative IT budget growth, and 32% said funding for new business initiatives had dried up.
In the global survey, Gartner separated CIO respondents’ organizations that had suffered a severe turn into two groups, “fit” and “fragile”, based on business outcomes. Gartner looked at over 50 organizational performance attributes to determine what differentiated the two groups. Results were bundled into three themes, alignment, anticipation and adaptability, which indicated simple shifts in leadership priorities.
The differences between fit and fragile organizations do not end with leadership attitudes. Internal institutions and process matter too. The survey found that 53% of global fit organizations are likely to have a flexible IT funding model to respond to changes, compared to 43% in EMEA. In addition, having a clear and consistent overall business strategy ranks as one of the most distinctive traits of fit organizations. 67% of the global fit CIOs said their organization excels at this; so, too, did 63% of EMEA CIOs.
A robust relationship with the CEO is also a strong differentiator. A strong CEO relationship helps CIOs learn about a change in business strategy as it occurs. In EMEA, 43% of CIOs are reporting directly to their CEOs. This demonstrates that EMEA CIOs are aligning their purpose and direction with business executives. Fit IT leaders use IT to gain competitive advantage and help organizations anticipate changes ahead of time. Similar to the global fit CIOs, a large percentage of EMEA CIOs have already deployed or will deploy cybersecurity, robotic process automation (RPA) and AI in the next 12 months.