Gartner: Digital KPIs Are Crucial to Measuring Success
October 04, 2017
Share this

Digital disruptors are emerging in all industries, and the need for CIOs to embrace digital transformation is urgent, according to Gartner, Inc. 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.

Peter Sondergaard, EVP and Global Head of Research at Gartner explained that digital disruptors are doing two things: finding new opportunities, and attacking the weakness of incumbents.

"Digital disruptors 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," Sondergaard said. "Digital also exposes the weaknesses of incumbents."

Measure Success with Digital KPIs

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."

Get Digital to Stay Competitive

The new breed of CEO believes their companies must use technology to gain a competitive advantage.

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 said. "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."

Three Situational Roles for the CIO

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.

"The digital value may be either optimization – just efficiency – or full transformation in the form of growth. It is best used to invent something entirely new," Sondergaard said. "This is critical because if your organization is not creating new digital business models, or new ways to engage constituents or customers, you are falling behind."

Sondergaard pointed out that scale does not merely mean getting bigger. The largest organizations are not the only ones that will win. In the emerging world of interconnected platforms and ecosystems, smaller organizations can very rapidly compete with the largest.

Having the Talent to Succeed

Looking ahead to 2018 and beyond, Gartner anticipates three high demand skills:

■ Artificial Intelligence (AI)

■ Digital Security

■ 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.

"CEOs who are making a priority of digital are challenging their Chief Human Resources Officers with creating an appealing digital workplace environment that will attract and retain the best people," Sondergaard concluded. "The solution for CIOs and their HR partners is AI. About 10 percent of CIOs are now using AI in the recruitment and talent management process. It will help you find people, and it will help you develop your people. It allows you to combine the best capabilities of humans with the best capabilities of machine learning systems."

Share this

The Latest

December 15, 2017

CIOs around the globe are more determined than ever to achieve digital transformation within their organizations despite setbacks, according to a survey by Logicalis ...

December 14, 2017

The Spiceworks 2018 IT Career Outlook found that 32 percent of IT professionals plan to search for or take an IT job with a new employer in the next 12 months ...

December 12, 2017

Downtime and security risks were present in each cloud environment tested, according to 2016 Private Cloud Resiliency Benchmarks, a report from Continuity Software ...

December 11, 2017

Companies that empower employees with the applications they want and need, and make them readily accessible — anytime, anywhere, on any device — can benefit from measurable gains at the individual and organizational level, according to a survey, The Impact of the Digital Workforce: A New Equilibrium of the Digitally Transformed Enterprise, conducted by VMware ...

December 08, 2017

Metrics-oriented thinking is key to continuous improvement – and a core tenant of any agile or DevOps philosophy. Metrics are factual and once agreed upon, these facts are used to drive discussions and methods. They also allow for a collaborative effort to execute decisions that contribute towards business outcomes ...

December 06, 2017

The recent outage of the University of Cambridge website hosting Stephen Hawking's doctoral thesis is a prime example of what happens when niche websites become exposed to mainstream levels of traffic ...

December 05, 2017

Even as many organizations continue to adopt multi-cloud technologies as part of their dramatic transformation, the mainframe remains a relevant and growing data center hub for many, according to BMC's 12th annual Mainframe Research Report ...

December 04, 2017

Banks are laying the foundation for the digitization of their businesses and anticipate emerging technologies -- from IoT to biometric authentications and blockchain -- to make a substantial imprint on the industry within five years, according to a recent survey of banking professionals commissioned by VMware ...

December 01, 2017

A recent blog on APMdigest — Protecting Network Performance is as Essential as Securing the Network — mentions that performance issues and outages are possible when security tools (like an IPS, WAF, etc.) are inserted inline. However, one easy way to mitigate this concern is to deploy a bypass switch before the inline tool ...

November 30, 2017

While self-service and self-help IT are in common practice, about half of organizations surveyed are still struggling with full deployment and realizing its value, according to a new report by Ivanti and the Service Desk Institute ...