2016 CIO Agenda: An India Perspective - Amazon S3...Understand the maturity and evolution of digital business through the lens of the Indian CIO. Discern how Indian CIOs are planning

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2016 CIO Agenda: An India PerspectivePublished: 19 February 2016

Analyst(s): Partha Iyengar

The 2016 Gartner CIO Survey reveals that CIOs in India grapple with theevolution of digital business within their enterprises, facing many personaland organizational hurdles in overcoming these challenges. Those that aresuccessful will emerge as strong business leaders within their organization.

Key Findings■ The digital-business-driven opportunities outlined in this research provide CIOs and IT in India a

unique opportunity to step out of the traditional back-office IT image, into a more visible andimpactful front-office IT role.

■ Projections for digital revenue growth in Indian enterprises over the next five years (44%)surpasses global projections.

■ Digital business pressure is being driven by the fact that 70% of the Indian population are"digital natives" under the age of 30.

■ Digital business works across the silos of the enterprise. This is especially difficult in India'straditional hierarchical, command-and-control-driven management structures, and requires asignificant amount of restructuring in how organizations function.

Recommendations■ Facilitate the creation of a common understanding, definition and semantics around digital

business within the enterprise.

■ Address the skills challenge aggressively within IT and the enterprise. Work with HR to adoptinnovative approaches to attracting and retaining the required talent.

■ Adopt bimodal, both as a means to position IT as a more effective business partner in the digitaljourney, and to drive broader innovation in the enterprise. Leverage bimodal concepts to investin and build out the foundational elements of IT, even as the business simultaneously demandstransformational capabilities from IT.

■ Focus on personal development as a priority — setting aside time to do this is a critical elementof personal and enterprise success. Part of the development required is to transform theleadership style from a "command-and-control" one to more participative and mentoring.

Table of Contents

Survey Objective.................................................................................................................................... 2

Data Insights.......................................................................................................................................... 3

Digitalization Is Intensifying: The Stakes Are Rising............................................................................3

A Skills and Talent Crisis Is the Biggest Challenge.............................................................................6

New Paradigms Must Be Embraced for Digital Business Success.................................................... 7

CIOs Have the Opportunity to Lead the Digital Charge................................................................... 11

CIOs Have to Invest in Self-Development to Be Successful............................................................ 13

Methodology.................................................................................................................................. 14

Gartner Recommended Reading.......................................................................................................... 14

List of Figures

Figure 1. Digital Revenue Growth, India vs. Global.................................................................................. 3

Figure 2. Top Three Digital Business Impacts, India vs. Global................................................................ 4

Figure 3. Priorities for IT Spending.......................................................................................................... 5

Figure 4. Barriers to Success in Achieving Objectives, Global................................................................. 6

Figure 5. Adopt a Platform-Based Approach to Organization Design (View 1)......................................... 8

Figure 6. Adopt a Platform-Based Approach to Organization Design (View 2)......................................... 8

Figure 7. The Bimodal Platform Is a "Platform of Platforms".................................................................. 10

Figure 8. Adopt the Ninja and Samurai Approach to Bimodal............................................................... 11

Figure 9. Enterprises With a CDO, India vs. Global............................................................................... 12

Figure 10. Additional Responsibilities/Roles Being Assigned to CIOs.................................................... 13

Figure 11. Number of Days CIOs in India Spent on Personal Development Last Year............................14

Survey ObjectiveThis document was revised on 29 February 2016. The document you are viewing is the correctedversion. For more information, see the Corrections page on gartner.com.

The 2016 Gartner CIO Survey is Gartner's annual analysis of the major priorities, business andtechnology trends impacting CIOs. This analysis uncovers core focus areas for CIOs in India as theyset their agendas for the coming year. The report uncovers the maturity of digital business,technology goals, challenges, organizational and leadership trends in Indian enterprises.

Two caveats of the survey approach should be highlighted here. One is the potential for "self-reporting" biases to affect results. The second is the fact that some of the data reported for Indiahad slightly less than the statistical validity threshold of 30 responses. The results for these charts

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should be interpreted as directional only. The sample size is indicated in each of the figures thatfollow.

The goal of this research is to:

■ Understand the maturity and evolution of digital business through the lens of the Indian CIO.

■ Discern how Indian CIOs are planning for the future.

■ Explore some of the business and technical drivers and inhibitors they are experiencing.

■ Provide insights and recommendation on next steps for Indian CIOs.

Data Insights

Digitalization Is Intensifying: The Stakes Are Rising

CIOs in India are more bullish in terms of the growth of digital business as measured in the rise ofdigital business revenue as compared to global projections (see Figure 1).

Figure 1. Digital Revenue Growth, India vs. Global

Sample size is less than 30; results are directional.

Source: Gartner (February 2016)

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This bears out a hypothesis within Gartner research that the digital business evolution and uptakeby enterprises is likely to be faster in India, due to a large population of digital natives and fewerlegacy inhibitors holding enterprises back. This also indicates that CIOs in India will likely have toevolve local best practices to deal with this unique set of factors.

As seen in Figure 2, the role of digital in driving new business channels is the predominant valueproposition (33%) cited by CIOs. The operational elements and benefits of digital, cited as theleading value proposition globally, is much lower in India (at 19%) and on par with othertransformational objectives like achieving tighter partnerships with stakeholders and creating newmarkets.

When we look at the digital impact area cited in their "top three" picks, engaging and empoweringemployees stands out among Indian CIOs. Given the demography in India, with most companieshaving an average employee age in the low 30s, this is not a surprise. Achieving digital success inthe marketplace has to go hand in hand with leveraging digital capabilities for employeeengagement within the enterprise (see "Delivering Business Value With a Digital Workplace").

Figure 2. Top Three Digital Business Impacts, India vs. Global



However, these aspirational projection needs are constrained by some of the core digitalinfrastructure challenges of years of underinvestment in IT and technology. Much of the world-leading budget growth in India over the past three years has gone into building out coreinfrastructure and foundational capabilities. This is slated to continue this year, with, as seen inFigure 3, BI/analytics, mobility and data center being among the top five areas of investment.


BI/analytics as the No. 1 area of investment seemingly augurs well for the "forward looking" anddigitally focused nature of the investment. The reality, however, as evidenced by inquiries anddiscussions with Indian CIOs, indicates that much of this investment is still in building out thefoundational BI capabilities.

Digitalization/digital marketing figures as the third priority for Indian CIOs compared to the fifthpriority globally. This is an indication of the pressure Indian CIOs are under to address some of thecore business issues arising from or enabling digital business, and more specifically the need tocommunicate very differently with the massive "digital native" customer and prospect base.

The difficulty for most Indian CIOs is to deal with the challenge of investing for transformationaldigital capabilities even as they continue to deal with foundational "renovating the core"investments. Balancing resources, including scarce skills, across these two imperatives will be a keydeterminant of moving the enterprise' digital business strategy forward. Creating an organizationalstructure (for example, appointing a COO of IT who focuses on the foundational elements) thathelps with this challenge is also an imperative.

Figure 3. Priorities for IT Spending



A Skills and Talent Crisis Is the Biggest Challenge

As seen in Figure 4, globally, skills is the biggest challenge cited by CIOs. While the number ofrespondents from India for this question were too low to even cite the data, anecdotally, this is anissue that resonates strongly with Indian CIOs, as well. Even as India continues to be seen as the"outsourcing capital" of the world due to the success of the IT services providers, Indian enterprisesstruggle with access to the skills needed to address digital business.

Figure 4. Barriers to Success in Achieving Objectives, Global

n = 555


The reasons for this are not difficult to identify. The first is the fact that Indian IT services providerstend to be the biggest — and most sought after — employers of IT talent. They are followed by adeep nine-level "food chain of IT employment," where the global technology providers based inIndia come next in the hierarchy, and are also large employers. A recent phenomenon in India sees aspate of technology and e-commerce startups attracting some of the best talent across the leadingcampuses in India. All this leaves mainstream Indian end-user enterprises struggling to attract andretain the best talent.

Another major skills challenge is that Indian talent is still very technically focused, whereas digitalbusiness skills put a premium on business and domain knowledge, as well as even scarcer softskills. The recognition that these skills are critical for India is just now starting to sink in. Theapproaches to address this issue are not easy, though. They range from a "boil the ocean" revampof the educational system, to more near-term changes in training approaches and budgets to focuson domain and soft skills, as opposed to the traditional "fixation" on technical training.

Enterprises should also revamp their IT recruitment efforts to focus on a broader set ofbackgrounds, away from an over-reliance on just engineering talent. This diverse workforce —


including, for example, liberal arts majors and accounting graduates — will contribute toaccelerating the creation of some of the needed soft skills as well as placing more of an emphasison domain knowledge, by "diluting" the technical obsession of pure engineering talent.

Availability of budget is on par with access to skills as a barrier to success. This will require CIOs towork on appropriate governance mechanisms and approaches to demonstrate the business valueof proposed IT and digital-business-related investments to convince an often skeptical managementteam. In many instances, the digital-business-focused budgets are being moved to the businessdepartments themselves and out of the purview of IT. It is unclear from the survey results whetherthis is part of the challenge being identified by Indian CIOs when they cite budget as a barrier. Evenif it is, it should not be viewed as a barrier, but as an opportunity to facilitate the use of thesebusiness-driven budgets to drive enterprise success in digital business. IT can and should be aneffective partner in this journey, regardless of where the budgets reside.

New Paradigms Must Be Embraced for Digital Business Success

The fact that digital business requires an integrated enterprise effort — as opposed to the traditionalsilos that enterprises operate in — requires a very different paradigm for success.

This is especially a challenge in India given the strong hierarchical, command-and-controlmanagement philosophy and structures that are deeply embedded in Indian enterprises.

Indian CIOs will have to — with the sponsorship of (enlightened) CEOs and business management— work that much harder to use the "platform philosophy" outlined here as a logical,nonthreatening, manner in which to achieve the required cross-enterprise collaboration. While"enterprise design is not the traditional purview of CIOs, the fact that enabling the platform-centricapproaches discussed below requires a strong technology underpinning and capability, coupledwith the unique cross-organization view of the CIO, makes this a potentially strong area ofcontribution for the CIO.

We characterize this new paradigm as adopting a "platform-based" approach to organizationdesign, structuring and processes (see Figures 5 and 6).


Figure 5. Adopt a Platform-Based Approach to Organization Design (View 1)


Figure 6. Adopt a Platform-Based Approach to Organization Design (View 2)



There are a few key characteristics of platforms as depicted above that are critical to success in thedynamic, ecosystem-driven reality of digital business. These are:

Multidisciplinary by design:

Recognizing that digital business requires a multifaceted approach from the ground up, embeddingthis capability in each of the platform layers depicted in Figure 6 allows the enterprise to respondwith greater agility and higher quality to many of the unanticipated opportunities and challenges thatare an inherent part of digital business. In India, CIOs should pursue an approach that draws fromand evolving the fairly popular matrix project structure within IT into a more broad-based andpermanent enterprisewide construct.

Dynamically connected and reconfigurable:

Traditional organizational dynamics, governance and associated politics make response to change(internal or external) a major rearchitecting exercise. Adopting a platform approach with ability to"morph" dynamically as a fundamental operating principle, makes for a powerful capability andingredient for success in digital business. Indian enterprises, with their strong sense of hierarchy, willbe especially challenged by this issue. It will require top-management-driven enterprise culturetransformation and a strong change management effort to achieve this. Flattening the organizationalhierarchy (as Infosys has recently announced) is another mechanism to simplify the challenge.

Semiporous boundaries:

This is a recognition of the fact that digital business issues don't start and stop at neatorganizational silo boundaries. An enterprise set up to follow the traditional partitioned structure,where each silo completes its "function" and throws the result over the wall for the next function todo its job, is by definition suboptimal in a digital business world. The platforms need to allow for alevel of semiporous behavior at the boundaries so that issues can be effectively addressed — forexample, separate customer support functions for online sales and in-store sales, resulting incustomer dissatisfaction when their issues transcend channels and cannot be addressed in a singleinteraction. Indian enterprises, which are typically extremely process-bound, will have to invest inprocess redesign to allow for this porosity.

Continually sensing, learning and reconfiguring:

Digital business will increasingly morph into an algorithm-driven and smart-machine-controlledworld, fueled by massive amounts of real-time decision-driving data and events. An enterprise thatdoes not have the ability to continually and seamlessly learn from each event or patterns discernedwith each set of data analysis, and adapt will rapidly become uncompetitive. Indian CIOs will haveto accelerate their efforts at moving into true predictive analytics and also an informationarchitecture that drives real-time data-driven decision making, either manual or, more likely,algorithm-driven.


While all the platforms depicted in Figure 6 are equally important, another enabling platform —bimodal — is becoming a mission-critical element of digital business success (see Figure 7). Thebimodal approach enables some of the platform elements discussed above, and more specificallyallows the enterprise to, simultaneously, consistently and as a core competence, exploit well-understood capabilities in a predictable fashion while having the ability to address not-so-well-understood business opportunities and drive innovation through an exploratory process.

Figure 7. The Bimodal Platform Is a "Platform of Platforms"


As Figure 8 depicts, this is akin to the very different but extremely complementary capabilities thatthe samurai and ninjas brought to the Japanese feudal lords in ancient times. Both had specificcapabilities uniquely suited to the outcomes they had to deliver, but they had to work in concert.


Figure 8. Adopt the Ninja and Samurai Approach to Bimodal


CIOs Have the Opportunity to Lead the Digital Charge

India is ahead of global trends in the appointment of chief digital officers (CDOs), with more thandouble the number of Indian enterprises planning to appoint a CDO as compared to enterprisesglobally (see Figure 9). One explanation of this somewhat surprising trend is that CEOs clearly seethe digital business imperatives for the enterprise, but are constrained in addressing theopportunities due to the strong hierarchical nature of Indian enterprises. Appointing a CDO with thecharter and organizational authority to cut across the silos and hierarchy is a way to address thiscultural issue.


Figure 9. Enterprises With a CDO, India vs. Global


This does not (and should not) remove the CIO from the hot seat. Even in enterprises that haveCDOs, the best recipe for success as a CIO is to create strong partnerships with the CDO, and withother technology-influencing power centers that will undoubtedly be a reality in the digital businessworld. Those that approach this as a "turf play" are likely to lose credibility and respect within theenterprise.

CEOs are giving CIOs an adequate platform to project their individual and department capabilitiesas a key competence in the digital business initiatives of the enterprise (see Figure 10). The set ofadditional responsibilities CIOs are being given (with, interestingly, the CDO role being at the top)indicates that CIOs are key drivers of digital business capabilities within the enterprise — in manyinstances, even more so than their global peers. As an added indication of this increasing powerand influence CIOs have within the enterprise, 59% of Indian CIOs report having a partneringrelationship and 28% the coveted "trusted ally" relationship with their CEO.


Figure 10. Additional Responsibilities/Roles Being Assigned to CIOs



CIOs Have to Invest in Self-Development to Be Successful

It has never been a better time to be a CIO in India — unless you are a CIO who does not yet havethe required business comfort, credibility and respect. Indian CIOs who are among the 15% with a"transactional" relationship with their CEO and other business stakeholders will potentially have avery difficult time.

Regardless of which category you are in, investing time in fairly extensive personal transformation ishighly recommended. Use as a benchmark the average time spent by CIOs of roughly 15 days peryear (see Figure 11). If you are currently a transactional CIO, you may need much closer to the 30-plus days planned by 17% of CIOs (see "New CIO Responsibilities in a Digital Business World" and"Leading From the Heart: Why Emotional Intelligence Is Crucial for CIOs").


Figure 11. Number of Days CIOs in India Spent on Personal Development Last Year



Methodology

The 2016 Gartner CIO Survey gathered data from 2,944 CIO respondents in 84 countries and allmajor industries, representing approximately $11 trillion in revenue/public-sector budgets and $250billion in IT spending. For this report, we analyzed data collected from the Indian CIOs. Thiscomprised 76 CIOs, which is 2.6% of the total respondent base representing $610 billion of revenueand $8 billion of IT spend.

Gartner Recommended ReadingSome documents may not be available as part of your current Gartner subscription.

"Building the Digital Platform: The 2016 CIO Agenda"

"Navigate Your Way to Digital Business Transformation With These Resources"

"Delivering Business Value With a Digital Workplace"

"A Bimodal Enterprise Needs Three Subcultures"

"Techquisitions: An Uncommon Approach Some CEOs Use for Digital Business Acceleration"


"Ten Practices CIOs Can Use to Find the People and the Ideas They Need"

"New CIO Responsibilities in a Digital Business World"

"Leading From the Heart: Why Emotional Intelligence Is Crucial for CIOs"

Evidence

This research is based on data findings from the 2016 Gartner CIO Survey. The original survey datawas collected online from 2,944 members of Gartner Executive Programs and other IT leadersbetween 4 May 2015 and 24 July 2015.

More on This Topic

This is part of an in-depth collection of research. See the collection:

■ 2016 CIO Agenda: Global Perspectives on Building the Digital Platform


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2016 CIO Agenda: An India Perspective - Amazon S3...Understand the maturity and evolution of digital business through the lens of the Indian CIO. Discern how Indian CIOs are planning