CEOs drive digital transformation in 2019 but face skills shortage

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As we look ahead to 2019, Matt Piercy, VP of EMEA at Zscaler predicts that the growth of digital disruptors will force traditional businesses to see the long-term value of digital transformation but that the drive towards digital transformation will result in a CIO skills shortage. His comments follow below in full.

The growth of digital disruptors will force traditional businesses to see the long-term value of digital transformation

“In the past, C-level executives have taken one of two approaches to digital transformation. The first involves business leaders regarding digital transformation as a ‘have to do’ as opposed to a ‘want to do.’ These tend to be more traditional, old-school organisations that are being told they should be taking this step—from peers, customers, or partners—and don’t want to be left behind. The fact is, however, the networking environment is changing, with applications including Office 365 increasingly moving to the cloud. Businesses are becoming more and more aware that they need to embrace digitalisation or risk losing their competitive edge. The second approach is being taken by C-level executives who are much more forward-thinking and already recognise the long-term value of digital transformation. They see digitalization as an opportunity to boost connectivity, improve internal processes, and increase customer engagement.

“What’s interesting is the impact digital disruptors — those born in the cloud—are changing the way traditional companies view digital transformation. Indeed, these companies are now competing against businesses that have limited network and physical infrastructure assets, or none at all, which makes the disruptors much more agile. The CEOs of incumbent companies, such as airlines, hotel chains, and car manufacturers, are watching young companies like Uber and Airbnb disrupt their markets and are subsequently starting to realise the urgency for change.

“The benefits of digital transformation are clear to see. Those that are launching in the cloud are growing faster, making more money, and moving into more countries. To offer one example, Airbnb recently valued its company at $31bn compared to Hilton’s estimated $23.33bn valuation. As digital disruptors enter the market in greater numbers, we will see companies that originally viewed digital transformation as a necessary evil shift their mindset and become much more open to implementing a digitisation strategy.”

CEOs will increasingly drive digital transformation but will face a CIO skills shortage

“As its benefits become well understood, digital transformation is undoubtedly topping boardroom agendas. However, for CEOs that recognise the need for— and want —digital transformation, a lack of expertise can be the biggest obstacle. It’s all very well to give the go-ahead to change the company and embrace digital processes, but CEOs are rarely aware of what this involves due to the unprecedented complexity of transformation projects.

“A challenge we are seeing more and more is the lack of experienced CIOs who can successfully execute a digital transformation initiative. There is a lot of emerging talent among those who have been brought up in the digital era and have the right qualifications; however, undertaking a significant digital transformation project requires senior-level skills and considerable experience due to the complexity involved in integrating business owners with network and legal requirements. CEOs would be wise to utilise trusted advisors and consultants to get strategic support on how to digitise, but they ultimately still need help to execute the necessary application, network, and security transformation changes in the right order.

“I believe we will see a growing demand for experienced CIOs, as an increasing number of CEOs embrace digital transformation initiatives. Furthermore, the growing demand for highly skilled CIOs will likely lead to high levels of employee attrition as businesses poach these high-value individuals from other firms. Such movement at the CIO level could exacerbate the problem of hindered or delayed transformation projects.”