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CIOs in Africa play a central role in defining new business models

September 19, 2018 • General

Tomas Nielsen, research director at Gartner.

Tomas Nielsen, research director at Gartner

Digital business is maturing and forcing organisations to change their business models and look to IT to help.

Half of the CIOs in Africa said their organisation has changed or is in the process of changing their business models, and the CIO will have a pivotal role to play, according Gartner, Inc.’s annual CIO survey.

The survey found that 63 per cent of CIO respondents in Africa are taking a lead role or are heavily involved in the decision to change business models.

The survey also revealed that IT has a paramount role to play in the change. “For 90 per cent of CIOs in Africa IT is very or extremely important to business model change,” said Tomas Nielsen, research director at Gartner.

Gartner analysts presented these findings during Gartner Symposium/ITxpo, which is taking place in Cape Town through Wednesday. The 2019 Gartner CIO Agenda Survey gathered data from more than 3,000 CIO respondents in 89 countries and all major industries, representing approximately $15 trillion in revenue/public-sector budgets and $284 billion in IT spending. Sixty-two CIOs from Africa were surveyed, representing $4.4 billion in IT spending.

The Need for a New Foundation

The shift in business and operating models means that CIOs must secure a new foundation for IT. Globally 33 per cent of organisations are scaling and harvesting the results of digital business, while in Africa only 21 per cent of CIOs are at that stage.

“African CIOs are still catching up on their digital business efforts compared with their CIO peers globally,” said Mr Nielsen. “More than half of CIOs in Africa are showing an interest or at the designing stage, while the majority of the top global performers are scaling their digital initiatives, optimising them or seeking new opportunities.

CIOs in Africa have some inroads to make in order to compete with their global peers. To help them move their digital initiatives from tentative experiment to massive scale they need to adopt a new secure foundation for their IT efforts.

Mr Nielsen recommends CIOs in Africa focus on three elements:

Secure customer centricity: Don’t rush into the goal of “digital first”, instead, focus on creating continuous experience across the customer life cycle. Then ensure that cybersecurity programmes become digital business enablers, rather than obstacles to innovation. Finally measure what matters. For 36 per cent of CIOs in Africa, the impact on consumer engagement was their top KPI to measure digital investments.

Resourced product management: This is where CIOs shift from a project to a product approach to digital business. A product-centric approach reduces friction in the delivery of driving quicker business outcomes as well as improving customer satisfaction and employee engagement, and enables high flexibility. That flexibility is crucial to the implementation of digital business value propositions.

Business enabling technologies: The choices a CIO makes about technology are essential to the success of digital business. In this situation, CIOs supports the change in business and operating models by adopting game changer technologies, Artificial intelligence (AI) being one of them.

IT Budgets Are Rising in 2019

Digital was ranked among the No. 1 business priority by CIOs in Africa. Thirty per cent of CIOs in Africa placed digital as their No. 1 business priority for the remainder of this year and next year. Business growth (23 per cent of CIOs) was named as the No. 2 business priority. “This ranking shows that CIOs in Africa are making digital an integral part of their business strategy and planning,” said Mr Nielsen. “They clearly want digital fuelled growth in 2019.”

Mr Nielsen added: “Digital is not nice to have, it’s mandatory. The investment in digital is increasing, and digital continues to gain currency across the economy in Africa.”

The financial outlook for IT in Africa is also promising. CIOs in Africa expect their enterprise IT budget to increase 4.3 per cent, on average in 2019. This is up from an average of 3.1 per cent last year. While the choice of technologies has not changed year over year, the spending amount for each has greatly increased. CIOs in Africa expect to spend the highest amount of new or additional funding in 2019 on business intelligence and analytics (57 per cent of respondents), cybersecurity (46 per cent of respondents) and digital business initiatives (39 per cent of respondents).

The survey also showed that cybersecurity is becoming a Board of Directors issue. Forty-eight per cent of CIOs in Africa are accountable for cybersecurity, while it is the responsibility of 20 per cent of the Board of Directors in Africa. “Cybersecurity is one of our hygiene factors,” said Mr Nielsen. “It has to work. CIOs get no thanks when it does, and when it fails spectacularly enough, they can lose their jobs.” Cybersecurity has already been deployed by 49 per cent of CIO respondents in Africa and 33 per cent of them will deploy it in the next 12 months.

While cybersecurity is the top digital technology deployment among CIOs in Africa, disruptive technologies are reaching a tipping point. Conversational platforms were ranked in the No. 2 position with 15 per cent of CIOs in Africa who have already deployed it and 13 per cent who will deploy it in the next 12 months. This signals consumer-driven advances in customer channels. AI was ranked third and AI is used in connection with cybersecurity. “For a quarter of CIOs in Africa they will use their AI-based applications for fraud analysis on transactional data,” said Mr Nielsen.

“In 2019 the journey into digitalisation will accelerate and it is critical that CIOs master new abilities to anticipate and prepare the needed changes that result from the scaling of their digital business initiatives,” said Mr Nielsen.

Edited by Neo Sesinye
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