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Digital leaders and the widening divide

This year’s Harvey Nash/KPMG CIO Survey shows a widening of the digital business divide, with companies that have already adopted digital technologies more likely to accelerate those investments than those still in the planning stage

The digital business divide that has been growing over the past several years is expected to accelerate as a result of Covid-19.

According to data from the 2020 Harvey Nash/KPMG CIO Survey, companies that had already made meaningful investments in digital technologies such as cloud, automation and artificial intelligence (AI) are poised to accelerate those investments in the coming year.

In contrast, companies that were in the early exploratory phases or had not yet started, are less likely to invest in the near term.

The end result will be a greater gap between the “digital haves” versus the “digital have nots”, creating a competitive chasm across sectors, countries and territories, and companies. Even more profound is the divide between the digital leaders and the rest of the pack, with the survey finding that those in the lead are 50% more likely to have significantly increased their technology spending due to the pandemic than their competitors.

Digital leaders – companies that are connected enterprises, with a digitally-enabled technology backbone – are more likely to demonstrate the most mature capabilities and outperform on the most meaningful business metrics. 

Efficiency

As measured by productivity and output, digital leaders are continuously optimising their operations. By architecting an integrated front, middle and back office, and sustainable, frictionless supply chains, these organisations differentiate by eliminating waste, increasing margins and rapidly generating a return on capital.

Often led by CIOs with deep experience in the business, these companies have invested heavily in cloud, automation, and integrated data management as core design principles.

Time to market

From ideation to delivery, digital leaders are simply better at putting new products and services into the hands of their customers. Organised around a strong product management discipline, digital leaders rely on the principles of modern delivery, scaling agile ways of working and streamlined governance; removing the divide between IT and the business by creating persistent multi-disciplinary teams.

“While the CIO Survey shows that board membership for the IT executive continues to decline, the influence they wield is at an all-time high. For many CIOs, exchanging a title for meaningful impact is the highest objective”
Steve Bates, KPMG

Digital leaders invest heavily in modern architectures, making use of reusable, composable structures that allow product teams to quickly respond to changing needs by using on-demand patterns and pre-defined templates.

Customer and employee experience

Digital leaders know that customers and employees alike already expect a consumer-grade digital experience in all aspects of their lives. Their investments in human-centred design, data analytics and augmentation are paying dividends through increased loyalty, lifetime value, retention and morale.

But the leaders are not going to stop there. The CIO Survey results show that they are going to increase their investments in core emerging technologies; doubling down on gaining knowledge about their customers and employees through machine learning and AI, being responsive and intelligent through augmentation, and becoming more trusted and secure by scaling blockchain.

Agility

Perhaps no word captures the nature of the digital leader more than “agile”: the ability to be constantly prepared for disruption, to be nimble enough to make precise moves in navigating change, all while remaining within your risk tolerance.

To enable these traits, digital leaders have re-imagined IT and the role it plays, including simplifying microservices and application programming interfaces (APIs); using low-code or no-code platforms to rapidly create new applications; and re-inventing the data ecosystem to catch signals of change earlier by making data accessible, intelligent and credible, coming from both internal and external data sources.

CIO influence

Every sector has its share of digital leaders – pathfinder companies that set the standard for performance and innovation. However, becoming world class does not correlate to simply spending more money than your competitors.

CIOs who help their organisation achieve these business results are among the most important advisors across the C-suite. While the CIO Survey shows that board membership for the IT executive continues to decline, the influence they wield is at an all-time high. For many CIOs, exchanging a title for meaningful impact is the highest objective.

Through a focused effort to change enterprise culture, skills, ways of working, and employee value proposition, CIOs at leading organisations are moving the needle to attract and retain the best talent and helping to ignite ideas that win in the market.

For the others, despite Covid-19 pressures, they simply need to do everything they can to catch up. While access to capital and resources will vary for every company, the danger is that the gap will soon become simply too wide to bridge – and the difference in experience doing business with, or working for, a digital leader compared to another organisation will become almost painfully apparent.


The 2020 Harvey Nash/KPMG CIO Survey was launched today. To register for a copy of the report, click here.

 

 

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