Eventually, 90% of tech budgets will be outside IT departments

Summary:Gartner predicts new role, 'chief digital officer,' who will guide the all-digital organization. But there's plenty of work for CIOs as well.

Twelve years ago technology spending outside of IT was 20% of total technology spending; it will become almost 90% by the end of the decade.

That's the latest prediction from Gartner, which notes that much of this change taking place with IT spending is being driven by the digitization of companies’ revenue and their services.

As Gartner explains it:

"Organizations are digitizing segments of business, such as moving marketing spend from analog to digital, or digitizing the research and development budget. Secondly, organizations are digitizing how they service their clients, in order to drive higher client retention. Thirdly, they are turning digitization into new revenue streams. This is resulting in every budget becoming an IT budget."

In other words, IT touches everything. Gartner goes on to predict that organizations will create the role of a "chief digital officer" who will guide this new reality -- and up to 25% percent of organizations will have a CDO within the next three years.

The question is, how will this compare to the CIO role?  As Gartner analyst David Willis explains it, the CDO "plays in the place where the enterprise meets the customer, where the revenue is generated and the mission accomplished. They’re in charge of the digital business strategy. That’s a long way from running back office IT."

So CIOs will be relegated to the backoffice, back-room server stuff, while the CDO gets all the fun, get-the-attention-of-management stuff, such as cloud, social, mobile and Big Data?  Gartner says there is a highly visible role for CIOs as well: "CEOs want their CIOs to make their impact felt where the enterprise meets the outside world. They want the CIO to unleash the forces that will differentiate their business. They don’t want the CIO spending all of their time automating the back office."

And IT leaders of all stripes -- be they CIOs or CDOs -- will need "a laser focus on their customers," Willis explains. “If you cannot explain how every project in your discretionary budget affects the end customer or citizen, don’t do it.  CIOs in every industry recognize that focusing on the customer is the major driver of innovation. The likelihood that a customer will recommend your brand to a friend or colleague matters.”

(Photo: US Bureau of Labor Statistics.)

Topics: CXO, IT Employment, IT Priorities, NextGen CIO

About

Joe McKendrick is an author and independent analyst who tracks the impact of information technology on management and markets. Joe is co-author, along with 16 leading industry leaders and thinkers, of the SOA Manifesto, which outlines the values and guiding principles of service orientation. He speaks frequently on cloud, SOA, data, and... Full Bio

zdnet_core.socialButton.googleLabel Contact Disclosure

Kick off your day with ZDNet's daily email newsletter. It's the freshest tech news and opinion, served hot. Get it.

Related Stories

The best of ZDNet, delivered

You have been successfully signed up. To sign up for more newsletters or to manage your account, visit the Newsletter Subscription Center.
Subscription failed.