Have you got your (Business) Priorities Right?

After the Fact
Each year Gartner conducts a survey with approximately 400 executives comprising of CEOs and senior business leaders from large enterprises across the globe with annual revenue of $1 billion or more.

The annual CEO and Senior Executive Report includes global research and in-depth business analysis as well as featuring a variety of Top 10 surveys which we have been following.

Always a noteworthy read, we thought it might be interesting to look back at the trends reported over the last few years and see how business priorities have changed, and why.

Hit List
When asked about their Top 10 Business Priorities back in 2011, the CEOs feedback was as follows:

In this survey only 1 out of the top 5 business priorities was about cost reduction (#3). The other four are focused on a variety of initiatives, all of which are designed to drive revenue growth.

Moving on a couple of years to 2013 priorities, on the whole, remained unchanged:

IE, again out of the top 5 priorities, only one (#3) was about reducing cost. What is interesting to note in the 2013 survey is the inclusion of Big Data (#9). Organisations were starting to recognise that in order to stay competitive, they need to have a better understanding of their data. Used correctly, and utilising the right tools, they have an opportunity to not only increase sales but provide customers with a better service too.

Buck the Trend
The research is conducted in such a way that respondents provide feedback using their own words. In turn, Gartner interprets their statements and then categorizes them around the central themes discussed. This provides great feedback on trends and business terminology as well as the language used to describe them.

So, moving on to 2015 business priorities are listed quite differently from previous years:

Whilst Growth is still top of the list (#1) in 2015 CEO’s recognised tha, in order to grow their enterprises, they needed to invest in technology to achieve it. Now, post-recession, the majority of companies are commercially stable and in a position to make those financial commitments.

However, as Mark Raskino, Vice President and Gartner Fellow explained:
“… explicit mentions of growth were down from last year. We attribute this decline not to less interest in growth, but rather to increasing interest in the mechanism that will create it. The second-most-important category of business priority for 2015 and 2016 is technology-related. This is the highest position we have ever seen for technology in this survey and it’s our firm belief that CEOs are more focused on this area than at any time since 1999.”

Moreover, when discussing top technology investments over the next five years, CEOs ranked 3 significant areas:

Customer Engagement Management 37%
Digital Marketing                                  32%
Business Analytics                              28%

High Risk
With digital starting to fundamentally change the nature of industries, CEOs’ security and risk concerns are rising. Of those surveyed, 77% of respondents agreed with the statement that “The digital world is creating new types and levels of risk for our business” and, 65% felt that “Investment in risk management practices is not keeping up with new and higher levels of risk.”

Cause for Concern
Nevertheless, Gartner expressed concern about the superficial understanding among the respondents of how digital change will enable their business higher levels of revenue. If they had truly grasped the concept CEOs should have been saying that digital business was a top strategic change or, that a business model change is imminent. However, the majority of CEOs did not mention this and/or failed to articulate it.

Game Plan
As a result, Gartner fears that business leaders have not fully understood the concept of a digital business world – and that too many business leaders still see the opportunity only in terms of better marketing, selling online and through social and mobile.

In a Nut Shell
In summary, CEO’s recognise that, in order to grow their business they need to invest in more diverse technologies. The Internet of Things – a term barely heard of two years ago – is becoming a priority. However, with these diverse offerings becomes the added problem of security.

To view the full report – 2015 CEO Survey: Committing to Digital

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