Gartner Says 89% of Board Directors Say Digital is Embedded in All Business Growth Strategies

Rhea-AI Summary

Gartner's recent survey shows that while 89% of board directors believe digital business is integral to growth strategies, only 35% have achieved digital transformation goals. The survey highlights a shift in accountability, with 28% of directors naming CEOs as the primary leaders in driving digital initiatives. Additionally, 40% prioritize investing in AI and machine learning, while 64% plan to increase their risk appetite through 2024. Boards are evolving towards a 'digital economic architecture' to capture similar benefits as digital-native companies.

Positive

• 89% of board directors recognize digital business as essential for growth strategies.
• 40% of board directors prioritize investment in AI and machine learning for digital success.
• 64% of board directors plan to increase risk appetite through 2024.
• 71% pursuing a 'digital economic architecture' to capture economic benefits similar to digital giants.

Negative

• Only 35% of board directors have achieved digital transformation goals.

Only 35% of Board Directors Have Achieved or Are on Track to Achieving Digital Transformation Goals

ORLANDO, Fla.--(BUSINESS WIRE)-- Eighty-nine percent of board directors say that digital business is now embedded in all business growth strategies, according to a new survey from Gartner, Inc. However, just 35% of board directors report that they have achieved or are on track to achieving digital transformation goals.

“Boards of directors (BoDs) have reached a point where digital business strategy and overall business strategy are one and the same,” said Jorge Lopez, Distinguished VP Analyst at Gartner. “While CIOs have made significant progress leveraging technology for operational excellence, this is not enough to realize the strategic business benefits that BoDs are looking for from digital investments.

“As enterprises increasingly operate in a world of constant disruption, the most future-savvy boards are considering how upheavals and risks can serve as a source of opportunity. CEOs and CIOs will need to adopt this mindset as technology plays an ever-expanding role in driving business success.”

Gartner analysts presented the survey findings during Gartner IT Symposium/Xpo™ 2022, taking place here through Thursday. The 2023 Gartner Board of Directors Survey was conducted via an online survey from June through July 2022 among 281 respondents in North America, Latin America, Europe and Asia/Pacific, who are in a board of director role or a member of the corporate board of directors.

CEOs Seen as Responsible for Driving Digital Business

BoDs cited CEOs as the primary leader responsible for driving digital business initiatives within the enterprise, selected by 28% of survey respondents. This is ahead of the CTO and CIO, cited as the primary digital leader by 19% and 14% of board directors, respectively.

“Historically, boards have looked to IT to lead digital business,” said Partha Iyengar, Distinguished VP Analyst at Gartner. “Yet given the macro and strategic benefits boards are now expecting from digital business, they now rightly expect to hold the CEO directly accountable for its success, similar to the accountability that CEOs have for enterprise revenue or growth.”

Boards Look to ‘Breakthrough’ Technologies for Innovation

Boards are looking to invest in ‘breakthrough’ technologies that will drive digital business and enterprise success. Forty percent of board directors consider artificial intelligence (AI) and machine learning technologies to be imperative to digital business success in their organization, the most-cited response.

Board directors cited software enhancement as their second-highest priority among breakthrough technologies, selected as an area for investment by 30% of respondents.

“Boards are seeking to modernize and enhance bedrock such as enterprise resource planning (ERP) and customer relationship management (CRM) tools,” said Lopez. “In practice they are often complex and rigid, when enterprises need agility and change.”

Board Directors Increase Risk Appetites

Risk-taking is a key component of digital acceleration. The survey found that 64% of board directors are planning to increase their risk appetite through 2024, climbing seven percentage points from the previous year’s survey findings.

“Boards recognize that decision making in a turbulent business environment requires a higher level of risk,” said Lopez. “This risk-taking ability is critical to competing at the speed of innovation.”

Many BoDs are also expanding their vision for digital business success to focus on a ‘digital economic architecture,’ with 71% of board directors reporting that they are pursuing or plan to pursue such an economic structure this year. A digital economic architecture is the approach that non-digital enterprises can use to achieve similar economic benefits – including growth, profitability, market cap and brand value – as digital giants have achieved via their ‘born digital’ business models.

“The evolution from the traditional focus on quarterly returns to a longer-term focus requires a significant change in mindset,” added Iyengar. “Boards must recognize and leverage new sources of production and value, which requires a greater ability to accept, and even embrace, risk.”

About Gartner IT Symposium/Xpo

Gartner IT Symposium/Xpo™ 2022 is the world's most important conferences for CIOs and other IT executives. In a world that is changing faster than ever, CIOs and IT executives will learn how to meet the moment to provide the vision and results needed to lift their organizations to the next level. Follow news and updates from the conferences on Twitter using #GartnerSYM.

Upcoming dates and locations for Gartner IT Symposium/Xpo include:
October 31-November 2 | Tokyo, Japan
November 7-10 | Barcelona, Spain
November 14-16 | India

About Gartner for Information Technology Executives

Gartner for Information Technology Executives provides actionable, objective insight to CIOs and IT leaders to help them drive their organizations through digital transformation and lead business growth. Additional information is available at www.gartner.com/en/information-technology.

Follow news and updates from Gartner for IT Executives on Twitter and LinkedIn. Visit the IT Newsroom for more information and insights.

About Gartner

Gartner, Inc. (NYSE: IT) delivers actionable, objective insight to executives and their teams. Our expert guidance and tools enable faster, smarter decisions and stronger performance on an organization’s mission critical priorities. To learn more, visit gartner.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20221019005991/en/

Meghan Rimol

Gartner

+1 571 303 4009

meghan.rimol@gartner.com

Source: Gartner, Inc.

FAQ

What percentage of board directors achieved digital transformation goals?

Only 35% of board directors reported achieving digital transformation goals.

What is the primary responsibility of CEOs according to the Gartner survey?

CEOs are seen as the primary leaders responsible for driving digital business initiatives, according to 28% of board directors.

How many board directors plan to increase their risk appetite through 2024?

64% of board directors plan to increase their risk appetite through 2024.

What technologies do 40% of board directors consider imperative for digital business success?

40% of board directors consider artificial intelligence (AI) and machine learning technologies imperative for digital business success.

What does 'digital economic architecture' refer to?

Digital economic architecture is a strategy that aims to achieve economic benefits similar to digital-native companies.