Gartner's global survey of 2,339 CIOs showed that issues experienced by CIOs are far from universal and real differences exist at both a regional and country level. The worldwide survey was conducted in the fourth quarter of 2013, representing more than $300 billion in CIO IT budgets in 77 countries.
The Gartner Executive Programs report "Taming the Digital Dragon: The 2014 CIO Agenda" represents the most comprehensive examination of CIO strategies and success behaviors. Economic conditions vary considerably. For example, on average, global IT budgets are flat—0.2% growth in 2013 to 2014—while CIOs in Latin America are looking at an average budget increase of 7.3%. This is typically in line with macroeconomic conditions.
"The CIO survey results clearly show that as digital opportunities and threats pervade every aspect of business and government, the IT and digital agenda for each country, industry and enterprise is becoming more unique," said Dave Aron, vice president and Gartner Fellow. "The way businesses and public-sector agencies use information and digital technologies are getting more entwined with their economic, regulatory and competitive contexts, as well as with the state of their business and digital maturity. This is a function of every aspect of every business becoming digital—every process, every employee, every business leader, every customer, every interaction, every moment. Just as our businesses are unique, our digital footprints are becoming all the more unique."
CIOs in North America report an IT budget increase of 1.8% for 2014—this means they may have more room to maneuver than their counterparts in EMEA, where the average IT budget is down 2.4%.
Sixty-two percent are expecting to change technology and sourcing strategies in the next 2-3 years; however, this is the lowest percentage in any of the major geographies. For example, 82% of CIOs in China expect to change their technology and sourcing approach in the next 2-3 years.
"North American CIOs should be careful not to become complacent, and they should instead keep a constant focus on optimizing their sourcing mix, especially to ensure there is enough innovation," said Aron.
In the use of the cloud, North American CIOs have a slightly larger focus on agility than their global counterparts and a slightly larger use of software as a service (SaaS), as opposed to infrastructure as a service (IaaS) or platform as a service (PaaS). However, only 26% reported they have made significant use of public cloud offerings, so the majority still needs to venture into significant public cloud usage.
CIOs in China reveal a higher business focus on growth and innovation, and a significantly higher IT budget increase of 13% this year, way above the global average of 0.2%. However, at least 45% of IT spending is outside the IT organization, compared with the global average of 26%. China appears bullish on digital and cloud, with 39% of CIO respondents from enterprises in China identifying a C-level digital leader, such as a chief digital officer (CDO) in their business, versus 7% globally.
Sixty-one percent reported that they have made a significant investment in public cloud, versus 25% globally.
U.K. and Ireland
Globally, 25% of CIOs have already made significant cloud investments. For Ireland and the U.K., the move toward the cloud is even more aggressive than the global average. In the U.K., for example, 28% report already making significant cloud investments.
Sixty-five percent in the U.K. and Ireland expect to increase their sourcing of IT in the near future. The desire to cut costs is traditionally one of the primary reasons behind this shift in sourcing strategy. However, there is also an increasing desire to achieve agility, as well through partnerships with external service providers.
"With 78% of CIOs expecting to change their sourcing approach in the next 2-3 years, a new set of capabilities will be required," said Mr. Aron. "CIOs must be able to partner with a broader range of IT suppliers, not only the big vendors, and move beyond IT contracts that constrain their ability to innovate and adapt in response to changing business expectations. This change will be especially challenging for the public sector in the U.K. and Ireland, as the current rules and regulations favor large suppliers and long-term contracts."
Most companies in Latin America are confident that they should take advantage of digital economy opportunities. Another relevant trend is that 25% of IT spend is outside of the IT budget (26% globally). For Brazil, it has reached 34%—meaning that business areas are increasingly driving budget decisions associated to their products and related IT support.
The survey also reveals growing digital confidence among CIOs in the region. While 42% think they don't have the IT skills and capabilities to meet digital challenges, in Latin America only 26% of IT organizations think they are not ready to "tame the digital dragon."