Digital Leadership: Are CIOs Up To The Challenge?

Timo Elliott

Part 1 in the 3-part Digital Leadership Series

Digital business transformation has shifted from “nice to have” to “must have.” According to a recent SAP Digital Transformation Executive Study conducted with Oxford Economics that surveyed over 3,100 executives across a wide range of industries, 84% of companies globally say digital transformation is important or critically important to their survival in next five years.

Leaders in digital transformation – the “Top 100” – are seeing real results in terms of superior revenue and profit growth, increased value across their IT investments, and increased value in terms of how they are organized, managed, and interact with their partners and suppliers. For example:

  • 85% of the Top 100 companies state that digital transformation has increased their market share compared to 39% of non-leaders.
  • 80% of the Top 100 say that digital transformation efforts have increased their profitability compared to 53% for everyone else.
  • Leaders in digital transformation are expected to realize 23% higher revenue growth rates over their peers for the next two years.

But leaders in digital transformation are a minority today. Only 3% of those surveyed have actually gone enterprise-wide with their digital transformation efforts. Challenges abound – from figuring out how to digitize IT and digitally interact with customers to integrating new digital services with existing products and solutions. In addition, companies typically have to invest in a new computing infrastructure that’s built on mobile, cloud, Big Data, and analytics and accelerated by the Internet of Things (IoT), advances in machine learning, and innovations like blockchain. These disruptive technologies give companies the ability to radically change business models and create new products and services. But firms are already struggling to renovate and simplify existing complex IT environments, making adoption of new technologies a challenge.

What sets leaders in digital transformation apart?

While there’s debate about whether or not companies need a dedicated chief digital officer (CDO) to lead their digital transformation – or if CIOs can step up to this challenge, titles, in the end, make little difference. SAP’s survey indicates that effective leaders in this area:

  • View unifying their cultures with a digital mindset as being the foundational element that allows them to avoid the classic approach: making piecemeal changes in individual areas over time as resources, culture, and organizational politics permit
  • Are committed to making more organizational changes than their peers in the coming years (83% of leaders vs. 44% of other respondents). This will allow them to continue to widen the gap between them and their competitors.
  • Ensure that their firm’s digital transformation extends throughout their internal organization and beyond to customers, suppliers, partners, and processes. In other words, they take an enterprise approach to transformation, rather than focusing on small “islands” of transformation.

The next big question, then, is how can you successfully drive digital transformation? In my next blog, I’ll share a useful framework from IDC, complete with role-specific scorecards – one for CIOs and one for CDOs.

For more insight on IT leadership, see Chief Digital Officer: Not Just A One-Hit Wonder?


Timo Elliott

About Timo Elliott

Timo Elliott is an Innovation Evangelist for SAP and a passionate advocate of innovation, digital business, analytics, and artificial intelligence.