Tech-Savvy CEOs

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Published on Friday, 24 May 2013 16:00

 

A large number of Asia Pacific CEOs see their organisations as ‘pioneers’ or ‘fast followers’ in adopting business- and IT-led innovation, says Gartner. The desire and intent to leverage technology better is tempered by some headwinds, as CEOs acknowledge they have IT departments that are still struggling with getting the basics right.

         CEO

“It is interesting that the Asia Pacific region, long seen anecdotally as more conservative in leveraging technology and driving innovation, has overtaken the global average of CEOs (26 percent) who describe their company cultures as being pioneering in the adoption of innovation,” says Gartner vice president Partha Iyengar.

 

“This means a larger number of CEOs than we would anecdotally expect are willing to take risks in the adoption of technology to get first-mover advantage. Half of them are focusing on creating a ‘digital strategy’ for their enterprises.”

 

Focus on Growth

Gartner's 2013 CEO survey paints a picture of a region that is focused and optimistic about growth prospects, even in light of uncertain economic conditions. An overwhelming 69 percent of CEOs say their plans for investment and growth in 2013 and 2014 are fairly clear and strong despite uncertain economic conditions. CEOs are targeting different customer requirements, new technology-driven capabilities and new geographies. Increasing investment areas in 2013 are product enhancement, IT and marketing.

 

There is also an expectation of an expanded role for IT in supporting this growth. CEOs foresee an 11 percent increase in the presence of the CIO role within their enterprises by the end of 2014. This is accompanied by an almost identical drop (12 percent) in the “head of IT” title within enterprises, possibly signifying that CEOs intend to elevate this role to full CxO status, with a seat at the executive table. Additionally, 31 percent of CEOs see themselves taking on a more direct role in technology-related issues, in addition to the CIO.

The Tech-Savvy CEO

According to the survey, 70 percent of Asia Pacific CEOs believe they have a good understanding of IT-related management issues. “This is also surprisingly high,” says Iyengar. “It bodes well for CIOs in their quest to increase the strategic impact IT has within the enterprise. However, it could also be a dangerous situation for CIOs who do not have strong business leadership credentials. Technology-savvy CEOs will be quite impatient to see their CIOs deliver IT-driven business impact, and will not hesitate to make personnel changes if they are unable to do so.

 

Top Macro Concerns

An overwhelming majority of CEOs believe that climate change is a real threat. Interestingly, Asia/Pacific CEOs are more concerned than Europeans (79 percent) or North Americans (64 percent) — even though one can argue that today's damage to the environment is primarily accelerating because of the strong economic and industrial growth in the emerging and newly emerging markets in the region. Another significant area of concern for CEOs is that the advanced economies (Europe especially) are entering another major recession. Oil scarcity, weak IP protection and the lack of sufficient skilled resources are also especially concerning for CEOs in the region, given the strong focus on new product enhancement and geographical expansion.

 

Perceptions of IT

CEOs expect their CIOs to deliver higher levels of business value. However, 55 percent of CEOs see the biggest challenge faced by their CIOs as getting the basics right. “This is a scary message in that, even as they expect IT to deliver differentiated business value, they believe that IT is still struggling with the fundamentals. Only when IT has achieved stability in the foundational elements – that is, mastering the basics – will CIOs have earned a seat at the business table to focus on delivering higher levels of business value”

 

An additional concern for CIOs is that CEOs believe 16 percent of IT investments are wasted. “While this is not necessarily a terrible number in the context of the increasing scale and complexity of IT initiatives, it should still be an area of focus for CIOs to address and reduce,” adds Iyengar. “Considering that IT investments are typically made to improve the performance of other business areas such as sales, marketing, supply chain and so on, any wasted IT investments affect them as well.”

---Gartner