CIOs to Spend 28 Percent Budget on Digitization by 2018: Gartner

Gartner survey of more than 2,500 CIOs charts the rise of the digital ecosystem as analysts explore the Gartner 2017 CIO Agenda at Gartner Symposium/ITxpo 2016

As digitalization matures, enterprises are increasingly finding themselves part of a digital ecosystem — a grouping of enterprises, competitors, customers, regulators and other stakeholders that exchange information and interact electronically. Gartner’s annual global survey of CIOs showed that, despite only a modest increase in the enterprise IT budget (2.2 percent globally), spend on digitalization is on the rise.

Gartner analysts presented these findings during the sold-out Gartner Symposium/ITxpo, which is taking place here through Thursday. The 2017 Gartner CIO Agenda Survey gathered data from 2,598 CIO respondents in 93 countries and all major industries, representing approximately $9.4 trillion in revenue/public-sector budgets and $292 billion in IT spending. For the purposes of the survey, respondents were categorized as top, average and trailing performers in digitalization.

Data from the 2017 survey shows that CIOs are shifting their investment pattern in response to digital business, with average CIOs already spending 18 percent of their budget in support of digitalization, a figure set to increase to 28 percent by 2018. Top performing businesses (where digitalization is “fully baked” into their planning processes and business model) are already spending 34 percent of their IT budget on digital, and this is predicted to increase to 44 percent by 2018.

Survey responses also point to the fact that digital ecosystem membership increases with digital maturity. One of the differentiating factors of a high-performance digital business is the creation of and/or participation in a digital ecosystem. Deliberate, wide-ranging use of an ecosystem to co-create solutions and take advantage of distributed capabilities separates top performers from the rest of the pack. Seventy-nine percent of top performers indicate their participation in digital ecosystems compared with 49 percent and 24 percent for average and trailing performers, respectively.

Andy Rowsell-Jones, research vice president at Gartner said, “A digital ecosystem amplifies the reach of a company. It not only enables scalable connections between known partners and customers, but also provides a platform for unknown parties to connect with one another. Ecosystems blur industry boundaries and give rise to entirely new kinds of companies, products and services. To create digital ecosystem-ready leadership, business leaders must re-evaluate leadership priorities, engage stakeholders and involve them across digital initiatives. Leaders that are digital ecosystem-ready are panoramic thinkers. They look for opportunity in every direction, cultivate diverse partnerships, and question the value propositions and business models of the past.”

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