Gartner Survey: CEOs Place High Value on Tech, Digital

Susan Nunziata, Director of Editorial | 4/14/2014 | 15 comments

Susan Nunziata
If you're looking for more than conjecture to back up the point that IT is increasingly crucial to the business, you'll find what you need in the report "The Gartner CEO and Senior Executive Survey 2014 -- 'Risk-On' Attitudes Will Accelerate Digital Business."

The research firm's predictions on worldwide IT spending -- which Garter says is set to increase 3.2% in 2014 compared 2013 -- further bolsters the case.

Before we get into the IT spending predictions, though, let's unpack some of the results of the CEO study. What's most important in these survey results is the observations that the CEOs polled are shifting their perspectives toward growth and risk-taking after years of retrenchment driven by difficult economic times.

This is good news for CIOs and other IT leaders looking to play a role in developing their organization's go-forward strategy.

For its CEO report, released today, Gartner surveyed 410 senior business leaders between September 2013 and December 2013. Qualified organizations were those with annual revenue of $250 million or more. According to Gartner, respondents displayed "a bullish attitude toward technology-related business growth in 2014 and 2015."

Fully a third of respondents (33%) named growth as their top priority for 2014. "The next step will be for CEOs and CIOs to work together to match the use of modern technologies to the specific kind of growth that the business is trying to win," said Mark Raskino, vice president and Gartner Fellow in a prepared statement.

One point in the report that stands out is the fact that only 7% of respondents ranked IT as one of their top priorities this year. While that number may seem alarmingly low for those who live and breathe IT, Gartner's statement presents this as an important step forward. According to Raskino's statement:

This supports a broader observation that CEOs are taking a higher personal interest in applying technology more aggressively in their firms. Technology talk points are becoming far more visible in CEO results presentations, investor calls and business press interviews.

In fact, according to Gartner, a tendency for business executives to separate "technology" and "digital" in the enterprise somewhat skews the results. According to the Gartner report, if combined, they become the third-most-significant external trend shaping business strategies, according to the survey. "This level of engagement with technology has probably not been seen since the tail end of the 1990s," according to the report. "In the last decade of Gartner's CEO surveys, technology has always been visible, but not so far to the foreground as it is in 2014."

The distinction between "technology" and "digital" in the enterprise is an important one for CIOs and other IT leaders to pay close attention to. Traditionally, "digital" has been the domain of business units, as in setting an external customer-facing digital, web, or e-commerce strategy that, oftentimes, brings in IT only as an afterthought. Times are definitely changing, and smart IT leaders will step into the breach. According to Raskino's statement:

Looking at this five-year investment perspective of the majority of respondents something quickly becomes clear. Many business leaders are lagging behind in their understanding of what digital business means, and the disruptions that are only slightly ahead of them. One of the most important things the CIO can do over the next year or two is close the very big gap in understanding, by working on education for the board, executives, senior and middle management layers. A decade of believing that IT was a commodity function, to be mostly outsourced, has left many business leaders in a position of relative weakness. Their vision and knowledge of the changes that technology makes possible are not strong enough. Their abilities in making deep, technology-enabled business change happen are not well practiced.

So, where are the investments to be made?

According to the latest "Gartner Worldwide IT Spending Forecast," released April 3, global spending on IT is expected to reach $3.8 trillion in 2014, a 3.2% increase from 2013 spending. What's notable here is that the spending report focuses on what would fall into the traditional IT category – the one that most business executives are accustomed to viewing as the purview of CIOs -- as opposed to the "digital" category that Gartner identifies in its CEO report.

Table 1: Worldwide IT Spending Forecast (Billions of U.S. Dollars)

 Category    2013 Spending ($ millions)   2013 Growth (%)   2014 Spending ($ millions)   2014 Growth (%) 
Devices 660 -1.4 689 4.4
Data Center Systems 140 -0.2 143 2.3
Enterprise Software 299 4.9 320 6.9
IT Services 922 1.8 964 4.6
Telecom Services 1,633 -0.5 1,655 1.3
Overall IT 3,654 0.4 3,771 3.2
Source: Gartner (April 2014)

These IT spending predictions indicate to me that there's going to be a considerable period of catch-up before perception aligns with reality when it comes to how business leaders view IT. Influence on the digital technologies that are crucial to business strategy and revenue generation is as important for CIOs and IT leaders as the tried-and-true IT products, and it's time that business leaders recognize that and give them a chance to use their considerable knowledge and expertise to help shape outward-facing business technology strategies.

— Susan Nunziata, Circle me on Google+ Follow me on TwitterVisit my LinkedIn pageLike EnterpriseEfficiency on Facebook, Director of Editorial, EnterpriseEfficiency.com

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MDMConsult   Gartner Survey: CEOs Place High Value on Tech, Digital   4/23/2014 5:28:26 AM
Re: Technology- everyone loves it!
Growth and Technologies also is a key indicator where the rapid growth of mobile is maturing. Last year Android is said to have "come of age." Expectations for this year's growth is not for new mobile expectations, rather mobile will be focused on continuing to expand on its massive growth.
SunitaT   Gartner Survey: CEOs Place High Value on Tech, Digital   4/19/2014 12:11:38 PM
Re : Gartner Survey: CEOs Place High Value on Tech, Digital
Today it seems like all serious companies, right from the lowest bakeries to the largest multinational companies, are adopting the use of modern technology in different areas and stages of the business cycle and, if this report by Gartner is anything to go by, they are only likely to do so even more in the coming future. This trend has been driven by several factors but, in my opinion, there are some two factors that stand out from the rest. The first is the fact that the use of modern technology has cut down the costs of most companies to a fraction of what it was before. The second, of course, is the increase efficiency and effectiveness that the technology affords.
angelfuego   Gartner Survey: CEOs Place High Value on Tech, Digital   4/16/2014 9:57:22 PM
Re: Technology- everyone loves it!
Thanks for sharing the Gartner Survey. It is wise that the CEOs are prioritizing technology and reflecting it in their budget. It sounds wise and practical to me. It would be foolish not to put a high value on technology.
angelfuego   Gartner Survey: CEOs Place High Value on Tech, Digital   4/16/2014 9:53:00 PM
Re: Technology- everyone loves it!
@Gigi, I agree. Technology costs need to be incorporated in the budget. I would put equipment, security, consultants, IT salaries, programs, etc. under this umbrella.
angelfuego   Gartner Survey: CEOs Place High Value on Tech, Digital   4/16/2014 9:50:45 PM
Re: Technology- everyone loves it!
I can't think of any business that couldn't benefit from utilizing modern technology. It is important for businesses to stay current on the latest trends in technology, so they can adopt one that maximizes the benefits it can provide to the business.
Anand   Gartner Survey: CEOs Place High Value on Tech, Digital   4/16/2014 2:33:14 PM
Re: Technology- everyone loves it!
@Zaius, I totally agree with you. It is impossible to ignore the benefits that every business stands to gain by adopting the use of modern technology in all areas of its operation and, in particular, the use of modern digital technology. This report by Gartner simply quantifies what everyone who has been following the current trends among business leaders should have seen coming right from the beginning of this decade. Indeed, it is difficult to see how this trend is going to change or even digresss slightly anytime in the near future.
jastro   Gartner Survey: CEOs Place High Value on Tech, Digital   4/16/2014 11:15:38 AM
Re: CEOs Place High Value on Tech, Digital
@susan – thanks for deconstructing this Gartner report. I'm trying to make sense out of these two findings, i.e., what did the other two-thirds of the respondents say, if they didn't name growth? And it would appear that IT is not really a growth area for this year, so where are their efforts going?

>> Fully a third of respondents (33%) named growth as their top priority for 2014.

>> One point in the report that stands out is the fact that only 7% of respondents ranked IT as one of their top priorities this year.
Gigi   Gartner Survey: CEOs Place High Value on Tech, Digital   4/16/2014 2:14:58 AM
Gigi
Re: Technology- everyone loves it!
"Nowadays, almost every businesses, companies or organizations heavily depend on technology to operate. So technology spending should take priority in their budget."

HH, no doubt about that. Automation and digitalization can increase the IT spending and may be later it can reduce the manpower cost too.
Zaius   Gartner Survey: CEOs Place High Value on Tech, Digital   4/15/2014 11:53:28 PM
Re: Technology- everyone loves it!
@HH: every company depend on it, but many decision makers become 'stingy' when spending money on it. The CEO's in this Gartner survey is from companis that are significantly large in size. On an average company, CEO's tend to cut on tech budget since the feel things are rolling fine -though it is a bit generalized comment.
Hospice_Houngbo   Gartner Survey: CEOs Place High Value on Tech, Digital   4/15/2014 9:33:07 PM
Re: Technology- everyone loves it!
@Zaius: Nowadays, almost every businesses, companies or organizations heavily depend on technology to operate. So technology spending should take priority in their budget.
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