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Digital Business: Most CEOs Love the Idea
Most CEOs are enthusiastic about the current wave of digital technologies. Big Data and analytics, digital marketing/social media, and cloud computing are the top three strategic priorities for many companies.
One reason why digital business is so popular is the possibility that the use of these technologies can turbo-charge earnings. A recent study by McKinsey found that two-thirds of businesses expected to increase their operating income over the next year as a result of increased use of ‘digital initiatives’ within their companies. 12 percent even said that adopting more digital initiatives will result in improving operating income by more than 30 percent.
It’s no wonder that CEOs love the idea of digital business and initiatives like Big Data. The report notes that “executives expect that new digital technologies will transform their businesses, but many admit their companies are far from prepared in developing capabilities and meeting challenges.”
For example, the report observes a disconnect between with the company CEO thinks the company is spending on digital business initiatives and what the CIO thinks. The report found that 40 percent of CEOs thought that they were spending at least 3 percent of their IT cost basis on digital business technology. But on the execution side, only 12 percent of CIOs though that their budgets was spending the 3 percent; most CIOs thought that their spending on digital business was closer to 1 percent of budget. But then CIOs may not be seeing the total budget picture as increasingly departments are by-passing their internal IT and purchase services from cloud vendors.
Further, while half of CEOs thought that their CIOs were supportive and engaged in moving forward with Big Data, one-quarter of CEOs thought that their CIO was out of touch and ‘not engaged at all’. In fact, only 14 percent of CEOs said that they would categorize their CIO as the leader of their digital business plan, and only 39 percent of CIOs are actively engaged in advancing digital business initiatives.
