Henn-na Hotel

Leading the charge in digital transformation, CIOs expect digital revenue to grow from 16 percent of business to 37 percent in the next five years.

“We are now knee-deep in the era of digital business, with many companies reimagining their business and operating models, based on digital capabilities,” said Dave Aron, who spoke today at the Gartner Symposium/ITxpo in Orlando, which runs through Thursday.

Aron, a vice president and analyst in Gartner's CIO Research group, presented findings from the research firm's annual survey of a record 2,944 CIOs from 84 countries, representing $11 trillion in revenue and about $250 billion in information technology spending.

The survey upshot: Digital experience (DX) is transforming business.

More Money, More Business

CIOs surveyed said the biggest impacts on their business were:

  • Increased revenue from improved operations
  • Increased business through digital channels
  • Reduced costs through digitalization

Some companies have taken digital to the max, such as the Henn-na Hotel in Japan. It’s said to be the world's first hotel run by robots.

The hotel is one of about a dozen case studies included in the CIO survey.

“In my stay there I had no interaction with humans at all,” Aron said. “It was a very comfortable and easy stay.”

A scary dinosaur robot greets and checks in English-speaking guests at the front desk. The hotel uses facial recognition technology for room entry.

“It’s a fascinating place,” Aron said. “This is a serious business.” Labor costs are one of the highest costs in the hotel business, he said.

Expanding the DX Ecosystem

Better than innovative technology is having a platform strategy — building digital systems that create an efficient ecosystem for the company, its vendors, customers, competitors and others, Aron said.

“Competitors are becoming customers,” he said. “The economics of platforms are very exciting.” 

Etsy, which became a publicly traded company this year, along with Amazon.com and Ocado Technology, an online-only grocer, are examples of companies with a platform strategy. 

Other results from the CIO survey:

  • Bimodal platforms, having two modes of technology, one that emphasizes safety and efficiency and another that’s more dynamic and exploratory, results in better overall business performance
  • 65 percent of CIOs reported a talent crisis, with the biggest gaps in information/analytics and business knowledge/acumen
  • 40 percent of the CIOs reported that they are leading the transformation, as opposed to digital information officers
  • More than 30 percent said they are the innovation leaders at their companies
  • Public-sector CIOs expect digital revenue to rise from 42 percent to 77 percent in the next five years, outpacing their publicly and privately held counterparts
  • When it comes to threats, CIOs are more concerned about competition from existing and crossover-technology companies (mobile phone companies becoming banks, for example) than security risks

Aron left the audience with a question: “Are we being brave enough, are we being courageous enough in our digital business, in our digital planning?”

Read more from the 2016 CIO Agenda survey.

For More Information:

(Disclosure: The author holds Etsy and Amazon stock.)