EMEA CIOs will have less funding for IT spending: Gartner

In 2023, EMEA CIOs expect their IT budgets to increase 4.4 percent, which is lower than the projected 6.5 percent global inflation rate. This means that CIOs in EMEA will have less funding available than last year, Gartner report.
Gartner analyst Daniel Sanchez-ReinaGartner analysts presented the survey findings during Gartner IT Symposium/Xpo, taking place in Barcelona.

The 2023 Gartner CIO and Technology Executive Survey gathered data from 2,203 CIO respondents in 81 countries and all major industries, representing approximately $15 trillion in revenue/public-sector budgets and $322 billion in IT spending. In EMEA, 780 CIOs participated in the survey from 51 countries and all major industries, representing nearly $5.9 trillion in revenue and $78 billion in IT spending.

“The pressure on CIOs to deliver digital dividends is higher than ever,” said Daniel Sanchez-Reina, VP Analyst at Gartner. “CEOs and boards anticipated that investments in digital assets, channels and digital business capabilities would accelerate growth beyond what was previously possible.

In EMEA, survey respondents ranked their executives’ objectives for digital technology investment over the last two years. The top two objectives were to improve operational excellence (53 percent) and improve customer or citizen experience (44 percent). In comparison, 29 percent cited growing revenue as a primary objective and 22 percent cited improving cost efficiency.

The survey revealed that EMEA CIOs’ business priorities for the remainder of 2022 and next year are growth and digital transformation. CIOs’ top areas of increased spending in 2023 include cyber and information security (70 percent), business intelligence/data analytics (53 percent) and cloud platforms (48 percent). However, 34 percent are hiking investment in artificial intelligence (AI) and 24 percent in hyperautomation.

94 percent of EMEA organizations struggle with developing a vision for digital change, often due to competing expectations from different stakeholders.

Chief marketing officer, chief sales officer, chief financial officer and other C-level executives are in the process of competing with each other in delivering their digital transformation, and this is consuming the CIO’s resources as there is no unified digital strategy.

The main drawback for this lack of digital vision is the inexistence of a common and quantified business objective across the entire organization. “For example, each business unit carries out their own initiatives to improve customer experience, however, they are not aligned to a common business result, such as increasing sales by a certain target,” said Sanchez-Reina.

The solution is for every single business unit to have their own metric that contributes to the same business result.

While strategic engagement of business unit leaders is necessary to accelerate digital initiatives, the survey exposed that the heavy burden of digital delivery is still not equally executed among IT and business departments. For example, only 32 percent of EMEA CIOs said that business functions participate in agile digital execution teams.

EMEA CIOs must embrace democratized digital delivery by design to accelerate time to value. Equipping and empowering those outside of IT – especially business technologists – to build digitalized capabilities, assets and channels can help achieve business goals faster.

Loaning IT staff to fusion teams that combine business experts, business technologists and IT staff will catalyze a team that is focused on achieving digital business outcomes, while also opening the way for reciprocity, such as integrating subject-matter experts from the business into an IT-led fusion team.

Many CIOs struggle to hire and retain IT talent to accelerate digital initiatives. The survey identified numerous sources of technology talent that are untapped. For example, only 12 percent of EMEA companies use students (through internships and relationships with schools) to help develop technological capabilities and only 24 percent use gig workers.

Talent shortages are among the greatest hindrances to digital. CIOs are often limited by policies related to preferred providers or employment contracts. They must stress to business and HR leadership that engaging unconventional talent sources can help accelerate the realization of digital dividends.

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