Executive Voices 6 mins read

3 IT trends CIOs need to care about in 2023

CIOs face uncertain times ahead. To weather the storm, they must act as strategic partners with businesses, leveraging technology to improve operations, shore up resilience, delight customers, and achieve sustainability goals.

Christophe Jacques Christophe Jacques

CIOs face a world of deglobalization, widening inequalities, and reshaping supply chains. Disruption and threats are increasing. These are all set to make 2023 a challenging year for IT leaders, but not without opportunities, as highlighted at the Gartner IT Symposium/Xpo 2022 in Barcelona earlier this month.

As Bernd Gross, CTO of Software AG, pointed out in his keynote at the event, the threat of economic downturn and societal and environmental pressures are forcing organizations to re-evaluate strategic plans. They are looking to increase their overall resilience to get through the next crisis that’s always just around the corner and, at the same time, grow. Not an easy balancing act. The CIO’s big challenge is how to turn these risks into serious business opportunities while handling unpredictability, resourcing pressures, and a challenging labor market.

To succeed in the foreseeable future, CIOs shouldn’t evaluate technology for technology’s sake. They must view technology investments through a lens of high financial returns. This means continuing the journey to becoming truly connected, including IoT and enterprise architectures, in order to improve efficiency, sustainability, and the user and customer experience.

“CIOs must prioritize digital initiatives with market-facing, growth impact,” explains Janelle Hill, Distinguished VP Analyst, Gartner. “For some CIOs, this means stepping out of their comfort zone of internal back-office automation to instead focus on customer or constituent-facing initiatives.”

Uncertainty should not be a barrier to digital transformation

Offsetting the risks and rewards of digital transformation during times of uncertainty isn’t easy. The journey becomes much more complex. However, companies can be successful by being committed to linking their IT strategies to tangible business outcomes. Figuring out how to deliver value while meeting KPIs and delighting customers is essential to thriving in the digital economy.

To manage budgets, CIOs must take proactive steps to keep costs under control and build efficiencies in the business. Under-investing in technology, however, will see enterprises failing to keep the lights on.

“To enhance their organization’s financial position during times of economic turbulence, CIOs and IT executives must look beyond cost savings to new forms of operational excellence while continuing to accelerate digital transformation,” explains Frances Karamouzis, Distinguished VP Analyst at Gartner.

Efficiency-driven digital investment budgets are safe

Despite what seems like a gloomy prognosis at first look, Gartner expects worldwide IT spending to grow 5.1% in 20231. This is on the back of enterprises forging ahead with digital business initiatives as a direct reaction to economic uncertainty.

“Companies will use digital technology primarily to reshape their revenue stream, adding new products and services, changing the cash flow of existing products and services, as well as changing the value proposition of existing products and services,” explains John-David Lovelock, Distinguished VP Analyst at Gartner.

Increasing spending, however, at a time when the world is in turmoil, dogged by conflicts, widespread inflation, and supply chain difficulties, means that CIOs must have a robust buy-in and be adhered to faithfully.

CIOs must consider the following 3 points when putting together their strategies in order to successfully lead their organizations through this period of uncertainty and disruption.

1. Technology must demonstrate business value

It’s tough times ahead for IT spending, and CIOs will be called on to demonstrate the business value of their choices. Unfortunately, according to Gartner, many digital investments are still not meeting senior leaders’ expectations for value. Presenting tangible results, however, is a major challenge for CIOs, especially in an economic downturn.

CEOs expect digital technology to speed up growth faster than previously possible2. These “digital dividends,” as Gartner calls them, are created by intensifying the physical world with advanced digital technologies, such as rapid and direct interaction channels through mobile apps and services.

To achieve this, a solid digital strategy that will deliver on CEO expectations is key. Prioritizing the right digital initiatives, business outcome-driven metrics, and creative thinking to fill the talent gaps — such as non-traditional talent pools — and talent teams fusing business with IT is recommended by Gartner. These unconventional talents will bring distinctive thinking, diversity, equality, inclusion, and a pipeline for future hires.

At the same time, IT leaders and CIOs must work together to accelerate time to value and drive both top-down and bottom-up business growth3.

2. Data-driven decision making: The secret sauce for business success

Data now permeates every part of our global economy. As such, data has become crucial for enterprises to gain a competitive advantage, both over established competitors and new arrivals.

To harness the power of data, CIOs must look to build adaptive systems as technology progresses. This includes leveraging AI, machine learning, and data analytics to analyze emerging customer behaviors.

Gartner predicts that by 2023, more than one-third of large organizations will have analysts practicing the discipline of decision intelligence, which includes decision modeling. Gartner further predicts that by 2025, 95% of decisions that currently use data will be at least partially automated.

Data-driven decision-making processes, however, don’t arise on their own. CIOs need a strategic approach to ensure the quality of their smart decision-making. This requires setting goals and expectations and aligning them with business outcomes by searching out what Gartner refers to as an organization’s “most precious monetizable asset” (data) and working with business leaders to find relevant business cases to gain rapid competitive advantage.

Incorporating the right skills is paramount. Gartner predicts that by 2025, for organizations to remain competitive, analytical and soft skills will be most in demand in the data and analytics skills market4.

3. Making sustainability the default of choice

Sustainability cuts across all the strategic technology trends for 2023. This is highlighted by a recent Gartner survey5, where CEOs reported that environmental and social changes are now a top three priority for investors, just after profit and revenue.

Delivering sustainable technologies in 2023 will not be enough though. Every technological investment will need to be weighed against its environmental impact. Technology will need to be carefully matched against both business objectives and sustainability.

“Sustainable technology is increasingly important operationally — for optimizing costs, energy performance, and asset utilization, for instance — but it also drives ESG outcomes like improving wellness and providing the traceability needed to ensure responsible business practices,” says Gartner Principal Analyst Autumn Stanish. “Sustainable technology also facilitates new business models and tech-enabled products to better serve customers.”6

CIOs must work to build a sustainable technology framework that enhances the energy and material efficiency of IT services and enable enterprise sustainability via technologies such as traceability and renewable energy — at the same time deploying IT solutions and services to help customers achieve their own sustainability goals.

Disruptive times ahead

2023 is not going to be an easy ride. As well as trimming operational spending, CIOs will need to focus their strategies on adaptability, sustainability, and resilience. But these challenges come with an opportunity for IT leaders to put technology at the forefront of the business.