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 01, 2020

Organizations around the world are facing heightened pressure to accelerate their digital transformation, as their customers, competitors, and business stakeholders all recognize doing so is no longer a company strategy, but a matter of survival. At the same time, these organizations are experiencing an equally difficult counter-pressure resulting from this transformation: complex multicloud environments and a growing inability to manage them ...

November 30, 2020

The "New Normal" in IT — the fact that most DevOps personnel work from home (WFH) now — is here to stay. What started out as a reaction to the COVID-19 pandemic is now a way of life. Many experts agree that development teams will not be going back to the office any time soon, even if the public health concerns are abated. How should DevOps and development adapt to the new normal? That is the question DEVOPSdigest posed to the development community. DevOps industry experts — from analysts and consultants to community leaders and the top vendors — offer their best recommendations for how development organizations can react to this new environment ...

November 24, 2020

Shoppers are heading into Black Friday with high expectations for digital experiences and are only willing to experience a service interruption of five minutes or less to get the best deal, according to the 2020 Black Friday and Cyber Monday eCommerce Trends Study, from xMatters ...

November 23, 2020

Digital Experience Monitoring (DEM) has become significant to businesses more than ever. Global events like Covid continue to disrupt best practices within IT to support business. The pandemic has already forced millions of employees to WFH and adopt a hybrid workspace. Network connectivity and cloud application issues in these environments will continue to impact productivity and slow progress. Even so, transparent migration and deployment of on-premise workloads across multi-cloud providers, by their very nature are complex ...

November 20, 2020

APMdigest posed the following question to the IT Operations community: How should ITOps adapt to the new normal? In response, industry experts offered their best recommendations for how ITOps can adapt to this new remote work environment. Part 5, the final installment in the series, covers open source and emerging technologies ...

November 19, 2020

APMdigest posed the following question to the IT Operations community: How should ITOps adapt to the new normal? In response, industry experts offered their best recommendations for how ITOps can adapt to this new remote work environment. Part 4 covers monitoring and visibility ...

November 18, 2020

APMdigest posed the following question to the IT Operations community: How should ITOps adapt to the new normal? In response, industry experts offered their best recommendations for how ITOps can adapt to this new remote work environment. Part 3 covers automation ...

November 17, 2020

APMdigest posed the following question to the IT Operations community: How should ITOps adapt to the new normal? In response, industry experts offered their best recommendations for how ITOps can adapt to this new remote work environment. Part 2 covers communication and collaboration ...

November 16, 2020

The "New Normal" in IT — the fact that most IT Operations personnel work from home (WFH) today — is here to stay. What started out as a reaction to the COVID-19 pandemic is now a way of life. Many experts agree that IT teams will not be going back to the office any time soon, even if the public health concerns are abated. How should ITOPs adapt to the new normal? That is the question APMdigest posed to the IT industry. ITOps experts — from analysts and consultants to the top vendors — offer their best recommendations for how ITOps can react to this new environment ...

November 12, 2020

The pandemic effectively "shocked" enterprises into pushing the gas on tech initiatives that, on the one hand, support a more flexible, decentralized workforce, but that were by-and-large already on the roadmap, regardless of whether businesses had been planning to support widespread work-from-home or not ...