How CIOs are targeting tech investments

Leaders bet on digitizing critical workflows, a survey shows

Companies approach digital transformation projects in countless ways today, but best practices are converging around certain areas of strategy. In a new survey by ESI ThoughtLab and ServiceNow, CIOs report that foundational elements—such as digitization of core business functions and consolidating data and systems—come first.

To achieve business outcomes, however, CIOs need to make tech investments that build effectively on that foundation to meet organizational goals. As the survey suggests, some companies are better at this than others.

In the study of 600 companies with revenue of $500 million and up, “leaders” were defined as those that have already brought digitization and automation to multiple business functions, and are integrating those through digital enterprise platforms. On the other hand, just 25% of surveyed companies qualified as “leaders,” so most CIOs are playing catch-up in the years to come.

How should CIOs decide where to make the right investments and find success in implementations? The survey offers a number of strategic insights.

Identify smart use cases

Leader companies are intentional in where they place their bets. They look at digital processes, use cases, and projected ROI before making investments. At least 54% of them form digital and business teams who are deeply familiar with the process and can analyze customer needs and expectations. Followers fall well short of that mark. And don’t forget the important role pilots can play in the success of IT investments. Sometimes it’s worth walking before running, and leaders reported they were able to confirm projected gains with this testing tactic.

Digitize core workflows

It may come as little surprise that the path to full digitization starts largely with IT. Among surveyed CIOs, 73% say they have invested in digitizing and automating workflows in IT service management. Human resources, customer service, finance/accounting, and employee engagement rounded up the remainder of the top five primary areas of workflow digitization.

But implementation rates aren’t uniform across industries. For example, 94% of financial services companies report that they have successfully digitized finance and accounting functions, but just 36% of health sector businesses have done the same. Another gap emerged in digitizing customer service operations: 89% of telecom companies report making significant progress, while just 46% of manufacturing organizations say they’ve digitized the same functions.

Areas seeing increasing digitization include risk/compliance, strategic planning, sales and marketing, and operations.

Build your digital platform foundation

Best practices are emerging when investing in and implementing a digital enterprise platform. Leaders are relying mostly on open-platform cloud designs and robotic process automation (RPA) and artificial intelligence (AI) to get started.

In the survey, 39% of all surveyed companies say they have largely or fully implemented cloud-based open platforms, with 68% planning to implement in the next three years. Enterprise-wide use of RPA and AI are also in place for 34% of surveyed companies, while 64% say they’ll get there within three years.

To get a sense of what sets leaders apart, consider that 74% say they’ve already implemented open-platform cloud and 75% are using RPA and AI across the enterprise. These are the foundations upon which CIOs can begin to put more tactical tech investments in place.

Target the right technologies

Leader organizations aren’t just investing in automating workflows across the enterprise; they’re targeting their dollars in specific areas to create competitive advantage. Leaders, for example, are making some of their biggest investments in cybersecurity (98%), data management (89%), AI (86%), and mobile apps (74%). Followers lagged behind at 74% for cybersecurity, 64% for data management, 53% for AI, and 38% for mobile apps.

Cybersecurity has become a critical priority, says Mark Settle, a former CIO of Okta, Staples, and several other companies. Every company’s attack surface, for example, “has expanded significantly as a result of sending everybody home to work,” he says. Increased security needs, he adds, “will persist in one form or another.”

Move toward a unified platform

Leaders are also identifying ways to make these technologies work together seamlessly. In the areas where workflows have already been digitized (such as IT, customer service, HR, finance/accounting), more than two-thirds of leaders have already integrated them across a unified digital platform. Nearly the same percentage have digitized risk management/compliance, and more than half of leaders have integrated planning, operations, employee engagement, and sales/marketing into a single platform. The gap between leaders and others is greatest in IT service (30%), asset management (24%), customer service (22%), and planning (20%).

Keep pushing for better data integration and usability

Even with the rapid progress many CIOs have made in moving their companies toward digital platforms, data management remains a huge challenge. Even when data is integrated into enterprise systems, according to the survey, it is often inaccessible to users or incompatible with other systems. In HR, for example, 67% of companies say they’ve successfully organized and integrated relevant data, but just 24% have made it accessible to users. Some CIOs are finding ways to solve this problem, such as using RPA tools to pull data (58%), using dashboards that combine data (53%), or leveraging analytics platforms (46%).

In a connected world, all workflows will need to be digitized and integrated, supported by data that is accessible. Best practices are emerging that will point CIOs in the right direction.