Gartner: Half of CEOs have no digital success metric

While the idea of shifting towards digital business was speculative for most CEOs a few years ago, it has become a reality for many in 2017, according to a recent survey of 388 CEOs* by Gartner.

Forty-seven percent of CEOs are being challenged by the board of directors to make progress in digital business, and 56 percent said that their digital improvements have already improved profits.

“CEO understanding of the benefits of a digital business strategy is improving,” says Mark Raskino, Vice President and Gartner Fellow. “They are able to describe it more specifically. Although a significant number of CEOs still mention e-commerce or digital marketing, more of them align it to advanced business ideas, such as digital product and service innovation, the Internet of Things, or digital platforms and ecosystems.”

The research finds that 20 percent of CEOs are now taking a “digital-first” approach to business change.

“This might mean, for example, creating the first version of a new business process in the form of a mobile app,” says Raskino. “Twenty-two percent are taking digital to the core of their enterprise models. That’s where the product, service and business model are being changed and the new digital capabilities that support those are becoming core competencies.”

Rising priorities

The research found that profits and growth remain the number-one business priority for 58 percent of CEOs. This is up from 42 percent in 2016.

Product improvement and technology are the biggest-rising priorities for CEOs in 2017.

“IT-related priorities, cited by 31 percent of CEOs, have never been this high in the history of the CEO survey,” comments Raskino. “Almost twice as many CEOs are intent on building up in-house technology and digital capabilities as those plan on outsourcing it (57 percent and 29 percent, respectively). We refer to this trend as the re-internalization of IT — bringing information technology capability back toward the core of the enterprise because of its renewed importance to competitive advantage. This is the building up of new-era technology skills and capabilities.”

Measuring it

Although more CEOs have digital ambitions, the survey revealed that nearly half of CEOs have no digital transformation success metric. For those who are quantifying progress, revenue is a top metric: Thirty-three percent of CEOs define and measure their digital revenue.

Raskino says, “CIOs should help CEOs set the success criteria for digital business. It starts by remembering that you cannot scale what you do not quantify, and you cannot quantify what you do not define. You should also ask yourself: What is ‘digital’ for us? What kind of growth do we seek? What’s the No. 1 metric and which KPIs must change?”

TM Forum recognizes that companies in the communications industry need an agreed roadmap that describes the journey to digital maturity, and a corresponding set of metrics to help measure their progress. We’re developing a Digital Maturity Model and Metrics (DMMM).

The first phase of the DMMM will be launched at TM Forum Live! in Nice, France next month.

The aim is that these tools will immediately benefit the communications industry, providing the common vocabulary and an objective way to assess a company’s current state on the journey to becoming a digitally mature organization.

Find out more about TM Forum’s Digital Maturity Model and Metrics

* Gartner conducted a survey of 388 CEOs and senior business leaders in user organizations worldwide in the fourth quarter of 2016. Most responding organizations were those with annual revenue of $1 billion.


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    Sarah is a freelance writer and editor with an interest in new technologies and how they impact our everyday lives.

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