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Gartner: Digital KPIs Are Crucial to Measuring Success

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."

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Gartner: Digital KPIs Are Crucial to Measuring Success

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."

The Latest

An overwhelming majority of IT leaders (95%) believe the upcoming wave of AI-powered digital transformation is set to be the most impactful and intensive seen thus far, according to The Science of Productivity: AI, Adoption, And Employee Experience, a new report from Nexthink ...

Overall outage frequency and the general level of reported severity continue to decline, according to the Outage Analysis 2025 from Uptime Institute. However, cyber security incidents are on the rise and often have severe, lasting impacts ...

In March, New Relic published the State of Observability for Media and Entertainment Report to share insights, data, and analysis into the adoption and business value of observability across the media and entertainment industry. Here are six key takeaways from the report ...

Regardless of their scale, business decisions often take time, effort, and a lot of back-and-forth discussion to reach any sort of actionable conclusion ... Any means of streamlining this process and getting from complex problems to optimal solutions more efficiently and reliably is key. How can organizations optimize their decision-making to save time and reduce excess effort from those involved? ...

As enterprises accelerate their cloud adoption strategies, CIOs are routinely exceeding their cloud budgets — a concern that's about to face additional pressure from an unexpected direction: uncertainty over semiconductor tariffs. The CIO Cloud Trends Survey & Report from Azul reveals the extent continued cloud investment despite cost overruns, and how organizations are attempting to bring spending under control ...

Image
Azul

According to Auvik's 2025 IT Trends Report, 60% of IT professionals feel at least moderately burned out on the job, with 43% stating that their workload is contributing to work stress. At the same time, many IT professionals are naming AI and machine learning as key areas they'd most like to upskill ...

Businesses that face downtime or outages risk financial and reputational damage, as well as reducing partner, shareholder, and customer trust. One of the major challenges that enterprises face is implementing a robust business continuity plan. What's the solution? The answer may lie in disaster recovery tactics such as truly immutable storage and regular disaster recovery testing ...

IT spending is expected to jump nearly 10% in 2025, and organizations are now facing pressure to manage costs without slowing down critical functions like observability. To meet the challenge, leaders are turning to smarter, more cost effective business strategies. Enter stage right: OpenTelemetry, the missing piece of the puzzle that is no longer just an option but rather a strategic advantage ...

Amidst the threat of cyberhacks and data breaches, companies install several security measures to keep their business safely afloat. These measures aim to protect businesses, employees, and crucial data. Yet, employees perceive them as burdensome. Frustrated with complex logins, slow access, and constant security checks, workers decide to completely bypass all security set-ups ...

Image
Cloudbrink's Personal SASE services provide last-mile acceleration and reduction in latency

In MEAN TIME TO INSIGHT Episode 13, Shamus McGillicuddy, VP of Research, Network Infrastructure and Operations, at EMA discusses hybrid multi-cloud networking strategy ...