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Friday, Jan 24th

EMEA businesses should expect a more volatile 2020

EMEA businesses should expect a more volatile 2020

With digitalisation driving many companies within the Europe, Middle East and Africa (EMEA) region, Gartner has warned that 2020 is likely to be more volatile than 2019 and CIOs must help their organisations deal with uncertainty and pressure.

The global market research and analysis company says businesses in EMEA remain vulnerable to 'turns' or forces that create uncertainty and pressure for their CIOs – this as Artificial Intelligence, robotic process automation and cybersecurity are singled out as priorities for the coming year.

Andy Rowsell-Jones, vice president and analyst at Gartner, said: "Simply being digital isn't really going to cut it anymore. Forty-one per cent of EMEA CIOs are already running mature digital businesses, up from 35% last year. It's the coming turns that are the problem, not digitalisation. No one is immune from economic, geopolitical, technical or societal turns, which are likely to be more common in 2020 and beyond. These turns can take different forms and can disrupt an organisation's abilities in many ways."

According to the 2020 Gartner CIO Agenda Survey, based on data gathered from more than 1,000 CIO respondents (including 383 in 40 EMEA countries), the nature and severity of the turns reported by CIOs varied widely.

In EMEA, they included adverse regulatory intervention (41% of CIO respondents), organisational disruption (40%) and severe operating cost pressure (40%).

"Those and other severe scenarios such as IT service failure or natural disaster have affected how organisations do business, and in most cases are making new things harder," said Rowsell-Jones. "The real trick is how well organisations weathered these challenges."

Agility to respond

Rowsell-Jones added that the problem with a turn is that, once you're in one, it disrupts your ability to respond.

36% of EMEA CIOs reported that turns had handicapped them in bringing new business initiatives to market, pushing out time to value and ultimately reduced their success.

Turns also weaken an organisation's ability to build its 'fitness' muscles, Gartner added.

34%of EMEA CIOs said they were behind in the race to attract the right talent, 30% were suffering slowed or negative IT budget growth, and 32% said funding for new business initiatives had dried up.

"No matter what it is, prepare for a turn before you attempt to go around it," said Rowsell-Jones.

In the global survey, Gartner separated CIO respondents' organisations that had suffered a severe turn into two groups – 'fit' and 'fragile' - based on business outcomes.

The company looked at over 50 organisational performance attributes to determine what differentiated the two groups.

Results were bundled into three themes - alignment, anticipation and adaptability - which indicated simple shifts in leadership priorities. For example, in times of crisis, leaders of fit organisations ensure that the organisation stays together while it shifts to a new direction.

They actively search for emerging trends or situations that require change. They take calculated risks but trust the core business capabilities. Leaders in fragile businesses are measurably worse at these things.

The survey found that 53% of global fit organisations are likely to have a flexible IT funding model to respond to changes, compared to 43% in EMEA.

Having a clear and consistent overall business strategy ranks as one of the most distinctive traits of fit organisations. 67% of the global fit CIOs and 63% of EMEA CIOs said their organisation excels at this.

A large percentage of EMEA CIOs have already deployed or will deploy cybersecurity, robotic process automation and AI in the next 12 months, Gartner continues.

"In a fit organisation, IT leaders turn the IT organisation into an instrument of change," said Rowsell-Jones. "Sixty per cent of global fit organisations rate the clarity and effectiveness of IT governance very highly. Similarly, 51% of EMEA CIOs rank their organisation's IT governance as effective or highly effective. IT governance can coordinate resource allocation in times of disruption, which offers survival benefits to an IT organisation."

"Digital is no longer the road to competitive advantage. How organisations flex as the environment changes and how CIOs organise to deal with turns will dictate their success in the future, especially in 2020."

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