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Trump-Brexit Effect Speeds up Digital Transformation

Political uncertainty across the globe is giving digital a renewed impetus and accelerating the rate of digital transformation, with businesses keen to acquire the necessary agility that will enable them to respond to volatile and changing situations. And they are dipping into corporate coffers and making long-term investments in order to achieve such digital-enabled resilience, finds a new CIO survey.

The Harvey Nash/KPMG CIO Survey 2017 found the number of organizations with enterprise-wide digital strategies has increased by 52 percent over the past two years chiefly in response to economic uncertainty. But the combined impact of Trump and Brexit has definitely had an impact, too, and this was one of the surprise findings of this year’s (nineteenth) survey, said Lisa Heneghan, KPMG’s Global Head of Technology.

Digital resilience in global turmoil
“One way the [Trump-Brexit effect] is manifesting itself is for enterprises to digitize as fast as they can,” she revealed. If businesses are less certain about the political environment, a greater level of automation provides a greater level of responsiveness as circumstances change. “Organizations have moved on from a world of strategizing and talking about digital, to one in which they are actually making it happen: we are now seeing widespread and active implementation,” Heneghan added.

Other trends flushed out by the survey include a jump in the number of Chief Digital Officers, up by 39 percent over last year. Another job title proliferating in the energetic push to digitize is Enterprise Architect: these professionals possess the fastest growing technology skill set this year, up 26 percent compared to 2016. “Enterprise architects are helping deliver complex digital strategies, and organizations are reporting a huge demand,” said the report.

Nonetheless, the survey revealed that businesses in the digital lead are less focused on individual job titles than innovation and growth. “Those organizations that we have identified as digital leaders tend to be much more focused on innovation and growth: they have higher levels of IT spend, and are much more likely to make aggressive investments in disruptive digital technologies such as digital labour – in some cases at twice the rate of everyone else.”

One way the [Trump-Brexit effect] is manifesting itself is for enterprises to digitize as fast as they can.
Related article: 13 Tips for Leading Digital Transformation

Digital labour on the rise
According to Heneghan, “Digital labour is how we describe the automation of human jobs using digital technology. This is occurring at three levels: the automation of repetitive business processes; the use of machine learning and finally the use of more advanced cognitive AI that enables software to make more sophisticated judgments.”

Overall, the survey found almost two-thirds (61 percent) of CIOs from larger organizations are already investing or planning to invest in digital labour and are doing so at four times the rate of non-leaders in cognitive automation (25 percent versus 7 percent). The majority of enterprises are implementing point solutions of process automation.

But Heneghan warned business that they must instill cultural change “hand in hand” alongside a broader implementation of powerful and emerging digital labour technologies. In order to get a return on investment, businesses must prepare and educate the workforce to be more agile, though “this can’t be achieved overnight,” she argued. Digital leaders are creating centres of excellence as they re-engineer a workforce consisting of humans, robots and software.

The workforce and lack of digital skills remains a concern, but it is not yet playing out in any noticeable actions to grow or source skills. Presumably, the imminent Brexit negotiations will be a major factor in determining the response of corporations to the digital skills shortage. In terms of skills there is a greater sensitivity in the workplace about where those skills come from.

At the senior levels of the digital skill pyramid, women CIOs enjoyed a pay hike, indicating that the gender pay gap is being redressed, but the glass ceiling looks shatterproof, with women representing just 11 percent of technology chiefs. “I remain massively optimistic that the inherent skills of women will be brought to bear in digital where collaboration matters more than control,” enthused Heneghan.

Concluding on a happy note, the survey found that CIOs are twice as likely to be leading innovation (41 percent versus 23 percent) in the group of enterprises identified as digital leaders. According to Heneghan, “CIOs were the second most likely innovation leader – their ability to have an end-to-end view of the enterprise makes them the strong candidate.”

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Helen Beckett

Author: Helen Beckett

Helen Beckett is the Community Manager of the Business Value Exchange. She has been a writer and editor for over 20 years and takes a particular interest in the challenges facing the CIO in today’s business climate.