2016 CIO Agenda: A Higher Education Perspective...Figure 21. Top Three Technology Areas Receiving Highest Amount of New/Discretionary Funding.....30 Figure 22. Top 10 Business Trends

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2016 CIO Agenda: A Higher EducationPerspectivePublished: 19 February 2016

Analyst(s): Jan-Martin Lowendahl

As digitalization deepens, higher education institutions need to manageincreasing threats to their business and operating models. Applying anorganizational, five-layer, platform approach focused on flexibility helpsmanage the digital change.

Key Findings■ In Gartner's 2016 CIO survey, higher education CIOs responded that, on average:

■ 49% of their business processes already have been impacted by digital opportunities orthreats, and they expect that to increase to on average 82% in five years.

■ 49% say that digitally enabled competitors entering from other industries are a bigger threatto the institution business model than digitally driven competition from traditional industrycompetitors.

■ 70% say that the ability to execute change is now seen as a greater threat than the inabilityto see/agree to the needed change (30%).

■ 26% report that skills/resources is their biggest barrier to achieving their objectives as aCIO.

■ 44% report they already have some kind of bimodal capability.

Recommendations■ Establish a five-layer platform organization to successfully deal with an uncertain future full of

change:

■ Create the value platform that aligns with your appetite and need for digital(ization).

■ Create the leadership platform that approaches IT as a team sport leveraging skill sets fromall domains.

■ Create a talent platform that allows you to develop your own talent as a CIO and beyond,contributing to digital as a team sport.

■ Create a delivery platform that has clear bimodal capabilities to handle change.

■ Create a technology platform with an exostructure approach to maximize future flexibility.

Table of Contents

Survey Objective.................................................................................................................................... 3

Data Insights.......................................................................................................................................... 3

The Digital Opportunity — Executing in the Age of Digitalization....................................................... 3

Power of the Platform.......................................................................................................................6

Value Platform............................................................................................................................ 8

Leadership Platform..................................................................................................................13

Talent Platform..........................................................................................................................18

Delivery Platform.......................................................................................................................24

Technical Platform.................................................................................................................... 29

Bringing It Together: Linking the Value and Technical Platforms.......................................................30

1. Interlocking Platforms........................................................................................................... 30

2. Focus on Flexibility................................................................................................................31

Bottom Line....................................................................................................................................34

Methodology.................................................................................................................................. 34

Gartner Recommended Reading.......................................................................................................... 34

List of Tables

Table 1. Respondent Demographics.......................................................................................................4

List of Figures

Figure 1. The Digital Opportunity — Entering the Age of Digitalization; the Progress of the CIO Agenda

.............................................................................................................................................................. 5

Figure 2. Explaining the Education Digitization-Digitalization Dimension.................................................. 6

Figure 3. Digital Visionaries Understand the Power of Platforms Throughout Their Businesses................7

Figure 4. Percentage of Total Revenue From Digital Sales.......................................................................8

Figure 5. Proportion of Business Processes Impacted by Digital Opportunities and Threats....................9

Figure 6. Which Is the Greater Threat? Digitally Driven Competition From Traditional Industry

Competitors or Digitally Enabled Companies Entering Your Industry From Other Industries?.................10

Figure 7. Expected Outcomes and/or Impacts That Digital Represents.................................................12

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Figure 8. Which Is the Greater Threat? Ability to See/Agree to the Need to Change Versus Ability to

Execute on the Necessary Change.......................................................................................................14

Figure 9. Distribution of Digital Leadership Responsibility......................................................................15

Figure 10. Roles CIOs Are Stepping Up to Lead in Addition to IT..........................................................16

Figure 11. How CIOs Describe Their Current Levels of Influence...........................................................17

Figure 12. CIOs That Have Faced Ethical Issues...................................................................................18

Figure 13. Biggest Barriers Facing CIOs............................................................................................... 20

Figure 14. CIOs Cite Talent Gaps..........................................................................................................21

Figure 15. What CIOs Love/Hate About Their Roles............................................................................. 22

Figure 16. How Many Days CIOs Invested in Personal Development Last Year..................................... 23

Figure 17. Bimodal IT Adoption............................................................................................................ 24

Figure 18. Organizational Use of a Second-Faster Mode of IT.............................................................. 26

Figure 19. The Most Impactful Bimodal Tactics Are Not the Most Used................................................ 27

Figure 20. Partners Considered Digital Accelerators............................................................................. 28

Figure 21. Top Three Technology Areas Receiving Highest Amount of New/Discretionary Funding........30

Figure 22. Top 10 Business Trends and Strategic Technologies Impacting Higher Education in 2016....31

Figure 23. Evolving the Infrastructure — Next: Focus on Exostructure.................................................. 32

Figure 24. New, Competitive and Commercial Threats Versus Security and Cyber-Risk Threats?..........33

Survey ObjectiveThe purpose of the 2016 Gartner CIO Survey is to help CIOs and other IT leaders set and validatetheir management agendas for the coming year. To achieve this, the 2016 Gartner CIO Surveygathered data from 2,944 CIO respondents in 84 countries and across major industries,representing approximately $11 trillion in revenue and public-sector budgets and $250 billion in ITspending. Respondents came from a range of industries including manufacturing, government,professional services, banking, energy/utilities, education, insurance, retail, healthcare,transportation, communications and media.

Data Insights

The Digital Opportunity — Executing in the Age of Digitalization

This research is part of the special report "Global Perspectives on Building the Digital Platform: The2016 CIO Agenda." Here, we present the 2016 Gartner CIO Survey results from its 166 highereducation respondents (see Table 1), and compare those results with the total 2,944 global CIOresponses. It is important to note that the sample size for the higher education CIOs are, in several

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questions, quite small; however, we use the data as directional and combine it with information fromour interaction with clients to provide an analysis. We strongly encourage our clients to look at theoverall data and the many different perspectives presented in this report, and others within thespecial report to learn about successful approaches in other industries and regions.

Table 1. Respondent Demographics

Organization Classification Statistics

Higher Education n = 166

Government or Public Entity 66%

Not-for-Profit Enterprise 29%

Commercial Business (Privately Held) 3%

Commercial Business (Publicly Traded) 2%

Region

Higher Education n = 166

North America 54%

EMEA 31%

Asia/Pacific 10%

Latin America 6%

Source: Gartner (February 2016)

In the 2014 CIO survey report, "Taming the Digital Dragon: The 2014 CIO Agenda," Gartnerexplained the movement beyond IT craftsmanship and IT industrialization into a third era ofenterprise IT, where digitalization is transforming business models and determining who will win (seeFigure 1).


Figure 1. The Digital Opportunity — Entering the Age of Digitalization; the Progress of the CIO Agenda


As digitalization deepens, companies are reimagining their business and operating models based ondigital capabilities. The speed of change is intensifying, and some argue that we have reached apoint where the exponential change is too great for a human mind — accustomed to linearphenomenon — to predict and perhaps even comprehend the speed of the change (see Note 1).Even in the traditional "industry" of higher education, there has been tremendous leaps that impactthe way education institutions operate in a fundamental way. In our journey from analog to digitized(same as analog but online) to digitalized (using digitized assets for fundamentally new approaches),some institutions are already experimenting with machine learning and essay grading, adaptive e-textbooks and smart machines as student advisors (see Figure 2 and Note 3).


Figure 2. Explaining the Education Digitization-Digitalization Dimension

BPO = business process outsourcing; MOOC = massive open online courses


What is clear from this analog-digitize-digitalize sequence is that success at each stage oftencomes from the creation of a flexible platform in the previous stage. First-order effects, such asbasic connectivity and information exchanged, come from the Internet — the World Wide Web.Those platforms then enabled second-order effects, such as Facebook. This was, in turn, leveragedby institutions such as Purdue University to create third-order effects by using student informationsystem (SIS) data to prepopulate course-based collaboration spaces on Facebook and Dropbox.

Making the most of digitalization requires an understanding of what increases flexibility for the fluidfuture and, as Gartner proposes, a platform thinking in five layers to achieve that flexibility.

Power of the Platform

Taking a platform approach to information and technology architecture has long been recognized bytechnologists as powerful. As outlined in this Special Report, platform dynamics are now beingapplied to create value in all aspects of business — value, leadership, talent, delivery and technicalplatforms (Figure 3).


Figure 3. Digital Visionaries Understand the Power of Platforms Throughout Their Businesses


Not every organization is ready to be a platform organization, due to its economic model. However,the concept of platforms is important to all businesses — public or private sector, large or small,information-intensive or physical-asset-heavy.

The key aspects of a platform business that distinguish it from the more traditional systems view ofa business are:

■ Creating value through connections and interactions, rather than ownership of individualresources

■ Flexible, dynamic connections, rather than fixed hierarchies

■ Semiporous boundaries, rather than hard delineation of inside and outside, exposingcomponents that are not yet products to the outside, and allowing resources to be accessedfrom the outside

■ Supporting continuous learning and change, rather than focusing on "running the machine" withexpensive step-fixed change

We use these layers to organize a comprehensive report of the higher education CIO responses inthe 2016 CIO Survey and provide recommendations for each platform layer.


Value Platform

The top layer is the business or value platform that deals with how the organization creates value forits stakeholders. Value can be created in many ways. In the private sector, it is often expressed asprofit, with a clear bottom line; in the public sector (including nonprofit organizations such as manyhigher education institutions) value is expressed in more varied ways (such as perceived quality oftransportation and healthcare services to citizens). Both sectors have in common that it alwaysmust be done in a financially sustainable way. In the case of higher education, value is about howthe institution chooses to fulfill its mission of education and/or research creating knowledge andknowledgeable citizens for the individual and the society. Digital is impacting all sectors, private aswell as public, enabling new ways to create value. In this survey, private-sector CIOs responded thatthe percentage of digital revenue will rise from 16% to 37% in five years. In the Gartner CEO survey,those numbers are 22% to 41%, indicating that CEOs believe that digital already has had, and willhave, an even bigger impact on how value is created in the private sector (see Figure 4).

Figure 4. Percentage of Total Revenue From Digital Sales


In the public sector, a differently worded question, identified an even bigger impact of digital onbusiness processes. In the full public and nonprofit sample, the CIOs responded that, on average,42% of business process already were impacted by digital opportunities or threats. They expectedthat average proportion to almost double — to 77% in five years. Higher education CIOs respondedthat digital had already impacted almost half of their institutions' business processes (on average,49%) and they expected that would increase to more than four-fifths (on average, 82%) in five years(see Figure 5).


Figure 5. Proportion of Business Processes Impacted by Digital Opportunities and Threats


Digging deeper into the impact of the digital threat to the current organization, the respondents werealmost evenly split when asked, "which is the greater threat?" (see Figure 6).

■ 51% selected digitally driven competition from traditional industry competitors.

■ 49% selected digital-enabled companies entering your industry from other industries.

In the very traditional "industry" of higher education, this 51%/49% inside/outside split is mind-boggling, seen in a historical perspective of very homogeneous business models and slow change.However, recent years have established a need for scalable, affordable, quality education that thepast education ecosystem has not been able to fulfill. It is, therefore, quite natural to seek new waysof creating education value from outside the traditional industry. Many new "business models" arebeing tested, and innovations such as StraighterLine, Udemy, Coursera, Coding Camps andcompetency-based education are trying to find their places in the education ecosystem. One thingseems to be clear, there is no "one-size-fits-all" solution to creating value within education, and thefuture holds a greater proliferation of business models (see "Predictions for the Higher Education'Business Model' Landscape in 2025 and Beyond Will Help CIOs Plan Now"). All of this is ultimatelygood, because it will provide future students with options that are more likely to be a fit with theirpersonal educational needs, family situations and budgets.


Figure 6. Which Is the Greater Threat? Digitally Driven Competition From Traditional Industry Competitors orDigitally Enabled Companies Entering Your Industry From Other Industries?


Higher education CIOs have a tremendous opportunity to play an important role in how digital willbe leveraged to meet this increased competition. A key question is where does the institution wantto be on the analog-digitization-digitalization dimensions shown in Figure 2, and how is the CIOvision/mindset going to contribute to the strategic direction. In Figure 7, we see the CIO responsesto the top three expected outcomes and/or impacts that digital represents for the organization.

The result is mixed:

■ The top impact is expected to be "more revenue from better operations" (60% of highereducation CIOs had it in their top three), which represents a predominantly digitization mindset.

■ The second impact is "more business through digital channels" (53%), which can be said to beboth a digitized and digitalized mindset depending on if it represents traditional online coursesor a more innovative approach — such as competency-based-education or adaptive learningthat allows any-pace education online (see, for example, Western Governors University andSouthern New Hampshire University's College for North America).

■ The third and fourth impacts "engaging and empowering employees" (44%) and "tighterpartnerships" (42%) could represent just digitization, but our direct interaction with clients leadsus to see this as representing a digitalization mindset. The reasons we believe the latter are:

■ In our interaction with clients on the topic of institutional, as well as IT strategic, planningwe see an increased focus on innovation of the main missions (education and research) by


http://www.wgu.edu/

http://collegeforamerica.org/

empowering faculty, students and staff at various levels through, for example, actionablepersonal analytics and innovative learning spaces.

■ Many institutional strategic plans also emphasize the need for "breaking boundaries" andforming tighter partnerships with potential employers of the students as well as deployingan "exostructure" strategy to leverage partners for delivery of education (see "Top 10Business Trends and Strategic Technologies Impacting Higher Education in 2016").

■ The fifth-ranked impact "cost reductions" (37%) unfortunately represents mostly a puredigitization mindset in our experience, even if it can be an important driver to make educationmore scalable, as well as affordable.

■ There is a jump to impacts six and seven, "creating new markets" (19%) and "expanding to newgeographies" (16%), which usually represents more of a digitalization mindset — at least in theuse of technology for reach, if not always in the change to a digitalized business model/valueplatform. Creating new market should imply creating a new value platform, and not just applyingthe existing one in another market.

■ Finally we have impact eight, "changing the basis of competition" (16%), and impact nine,"crossing industry boundaries" (7%) that are clearly about a digitalization mindset.

Overall there is a good mix of digitization efforts, mostly driven by financial sustainability anddigitalization efforts looking to increase competitiveness. One comforting thought is that anydigitalization first requires a digitization step, which means that irrespective of the mindset,institutions are maturing and setting themselves up for digitalization bit by bit. A final comment onthe data presented in Figure 7, split on different types of organizational forms, is that it does not giveany clear answer to where higher education fits in terms of private or public. A much more detailedanalysis is needed, which unfortunately the sample size did not allow.


Figure 7. Expected Outcomes and/or Impacts That Digital Represents



Conclusion

At the end of the day, the CIO survey indicates that digital is changing everything and, at the veryleast, an institution will need to establish a flexible value platform to be able to respond to thechange. The flexibility enabled by the value platform is needed irrespective if it is to only sustain thecurrent business model by mainly doing digitization to improve efficiency, or if it is to disrupt theeducation ecosystem by digitalization, creating new education business models. A key finding in thesurvey is that 49% of the higher education CIOs believe that the greater threat to the institution isfrom digitally enabled organizations coming from outside the higher education "industry." CIOs arewell-positioned to understand and drive the change needed. But will they? The next sectioninvestigates the role of a leadership platform and the role of the CIO within it.

Recommendations

When building a value platform:

■ Begin at the beginning. Do the higher education business model exercise and identify yourappetite and need for digital(ization) to compete (see "Toolkit: Workshop for Building a StrategicTechnology Map to Support Your Future University").

■ Decide if you want to drive or follow as a CIO.

Leadership Platform

The second layer is the leadership platform, which deals with how the organization makes decisionsabout how to create value for its stakeholders. The first section on value platform shows that digitalcreates many opportunities and threats, and that there is a need to make many important choices todeal with digital. Last year's CIO Survey showed that achieving digitalization requires a flip from acontrol-focused leadership to a leadership based on articulating a shared vision. In this year's CIOsurvey, we asked a related question about which is the greater threat: "Ability to see/agree to theneed to change or Ability to execute on the necessary change?" The result is clear, with 70% of thehigher education CIO respondents (n = 63) saying that ability to execute change is now moreimportant than just agreeing to change (30%). This indicates that a significant majority nowacknowledges the need for change; however, they do not believe they are yet set up for achievingchange. This is slightly better than for the total sample (n = 959), where the split is 37/63, agree/execute (see Figure 8).


Figure 8. Which Is the Greater Threat? Ability to See/Agree to the Need to Change Versus Ability to Executeon the Necessary Change


In last year's survey, it was clear that higher education CIOs saw it as their responsibility to leaddigital change (average 59%) much more than the global sample of CIOs (average 47%; see Figure9). That result was interpreted as lack of confidence in the rest of the institutional leadership tograsp the role digital will play in the needed change. This led to a need for the higher educationCIOs to take charge themselves. The heavy reliance on the CIO alone is potentially a problem,especially seen through the eyes of our Gartner CEO survey of 2014. In that survey, CEOsresponded that the digital responsibility will be much more distributed, in other words, digital is ateam sport.


Figure 9. Distribution of Digital Leadership Responsibility

Numbers may not total 100% due to rounding.


The data in Figure 8 indicates that seeing/agreeing to change is now a lesser problem relative toexecuting change. This makes it even more important that IT is integrated into the business,allowing for higher education CIOs to blend into the leadership platform and impact the use ofresources outside pure IT.

In this CIO survey, we asked the question "In which areas are you designated as the person incharge of any aspect of the business other than IT?" (see Figure 10). This was to determine theexpanded responsibilities for the CIO. The top three responses were: chief digital officer (CDO;42%), head of innovation (23%) and shared services (19%). This indicates a healthy expansion ofCIO responsibilities beyond just IT, but it is still very much anchored in IT. Enterprise change (16%)


and business strategy (10%) are interesting responsibilities that are truly enterprisewide, but stillleverages a lot of experience from IT. CFO (2%) and COO (2%) are still low on the list. Ourexperience tells us that in the majority of cases, it's CFOs and COOs that are adding a CIO role,rather than a CIO adding CFO and/or COO responsibilities. Overall, it is interesting to note that whileinnovation responsibilities are No. 2 for higher education CIOs, it still lags the global sample, with11%, and perhaps represents an opportunity for development of responsibility.

Figure 10. Roles CIOs Are Stepping Up to Lead in Addition to IT


We asked, "How would you describe the current levels of influence and power of the CIO and IT?"The responses indicate that higher education CIOs are very similar in their distribution of level ofinfluence compared to other industries. There is a symmetry to the influence, with 25% trusted ally,47% partnering and 26% transactional, and only 1% at risk (see Figure 11). While the 1% at risk isnegligible, it seems obvious that a CIO wanting to influence the digitalization of the institution needsto move up in trust levels. Moving up from transactional is especially important, unless the CIO is


content with the role. In that case, however, there is a high risk a CDO-type role will step in fromanother domain of the institution to lead digital change.

Figure 11. How CIOs Describe Their Current Levels of Influence


In this context, it is interesting to notice that while a lot of leadership issues are similar amongindustries, there are also a few clear differences, with 82% of higher education CIOs (n = 44)reporting that they have faced an ethical issue, which is 22% over the global sample (n = 949). Thisis most likely due to the nature of higher education CIOs dealing with a lot of students, as well aspotentially sensitive research results. What this does show is that higher education is leading theway in getting experience in some areas can be of benefit other industries (see Figure 12).


Figure 12. CIOs That Have Faced Ethical Issues


Conclusion

It is clear from the datasets presented in the two first platform layers that digital needs to be a teamsport, with a flexible leadership platform that allows institution leaders to fluidly manage resourcestoward effective execution. A higher education CIO needs to be less like a lone wolf, and extendinfluence over more domains by taking on more responsibility or building a trusted ally/partnershiprelation.

Recommendations

When building a leadership platform:

■ Create the flexibility that approaches IT as a team sport, leveraging skill sets from all domains.

■ Look for the personal opportunity to get a mandate outside of IT, where there is a naturalleverage of what you know from (leading) IT.

Talent Platform

The third layer is the talent platform, which deals with how the organization makes sure it has theright skills at the right moment to create value for its stakeholders. In the second layer, theleadership platform, the CIO survey respondents established that greater than two-thirds saw"ability to execute change" as the major issue, compared to seeing/agreeing to the needed change.We asked, "What is your biggest barrier to achieving your objectives as a CIO?" The data from the


respondents clearly shows that skills/resources is the top obstacle, with more than a quarter ofhigher education CIOs reporting it as their top hurdle to overcome (26%; see Figure 13). It beatseven the traditional funding/budgets barrier, which came in second at 19%. Several other people-related barriers make it high on the list:

■ No. 3 is "culture/structure of organization" (15%)

■ No. 5 is "capacity/willingness to change" (11%)

This further strengthens the case for a flexible talent platform. The three next big barriers that madethe list:

■ No. 6 "IT-business alignment" (7%)

■ No. 7 "management sponsorship/understanding/relationships" (4%)

■ No. 8 "governance" (4%)

These all indicate that the leadership platform is still not mature. The last big people-related barrierthat made the list came in ninth, "pace of change," which can be said to apply to all platform layers— even if it is fundamentally a perception of the people in the organization (leadership as well asemployees/talent). Interestingly, innovation is not deemed a big barrier among CIOs at all in thissurvey, which we interpret as a relative lack of focus on organizational innovation, having tried andperceived it as a barrier. Later on, in Figure 15, innovation is ninth on the CIO "love" list. (Note: thatthe sample size for higher education in this question was only 27, so these results are onlydirectional. However, they do align with our experience from client interactions.)


Figure 13. Biggest Barriers Facing CIOs


The key talent gap, according to the global and higher education samples of CIOs, is in"information/analytics" (40% and 52% of respondents identified it as one of their top three talentgaps in free text format; see Figure 14). This is well-aligned with current trends in investment intechnology (see Figure 21 in the Technical Platform section) and the overall focus on analytics as akey enabler organizational performance in most industries.

The next highest ranked talent gap for the global sample is "business knowledge/acumen" (18%)which does not even make the top 10 for the higher education CIO sample (it is ranked 17 with 4%).We do not interpret this as higher education having this under control. Instead we find this isworrying as it indicates a lack of emphasis on "business knowledge" talent as a key to success indigitalization. A thorough understanding of the "business" that needs to be digitalized is crucial forsuccess. Even "digital" which can be interpreted as IT's way to support digitalization is lower in thehigher education sample vs the global sample (11% vs 15%).

The general tendency in the talent gap lists is that higher education seems to focus on moretraditional technology talents than an overall more rounded talent profile in the organization. To befair, "business knowledge" is very hard to come by in organizations that often are very devolved bydesign and where a high premium is put on formal degrees to merit "business" credibility. Theseresponses may well reflect that higher education CIOs do not perceive that acquiring "businessknowledge" is their responsibility. However, in that case, it is even more important to strengthen the


leadership platform and make IT a team sport at all levels to ensure the mix of IT and "businessknowledge" to achieve digitalization.

Figure 14. CIOs Cite Talent Gaps


In the IT organization a key talent is, of course, the CIO. To further investigate what makes a CIOmotivated or discouraged we asked, "What do you love most about your role" and "What do youdislike most about your role?" In the love/hate heat map in Figure 15, we show the top 10responses in each category.


Figure 15. What CIOs Love/Hate About Their Roles


The first startling finding is that "change agent" is the top item in the love category for highereducation CIOs (19%), but "change management" is also at the top (16%) in the hate category. Thislooks like a strange inconsistency that may be a result of a dichotomy in the higher education CIOsurvey sample. However, it can also reflect the difference between having a personal impact onchange, versus organizing change in the complex organizations that higher education institutionsoften are. Making other people see the need for change can be very inspiring, but making anorganization actually change is often very frustrating. The first is also often a relatively quick win ascompared to the latter, which usually takes years to really achieve. This interpretation also resonateswell with the result shown in Figure 8 about seeing the need for change versus the ability to executeon change. The next three top-ranked items in the hate list — administration/bureaucracy,personnel/workforce, and politics (all 9%) — also indicate a frustration with executing change in aninstitutional context.

Overall, the love list is quite unsurprising, especially compared to the global sample, except forinnovation, which is number nine for higher education CIOs (3%) and number four for all the CIOs(11%). Comparing the global and higher education sample response in the hate list there is a similarunsurprising alignment, except for change management, where higher education CIOs have it at thetop of the list while the global sample has it at the bottom (5%). One other noteworthy response isthat IT stigma even makes the top 10 hate list for global and higher education. The fact that IT is still


not seen as a strategic tool for the organization is, indeed, a cause for frustration for the CIO,especially in higher education, where it has such potential.

To be an effective leader coping with change, the CIO also needs to ensure there is ample time forpersonal development. Higher education CIOs seem to be in a good position globally (see Figure16). As always, there is room for improvement for CIOs at the lower end of the spectrum. However,just making time is not enough. Focusing on the right professional development at the right time iskey. The love/hate top 10 list indicates that a key area for CIO development is change management.General leadership skills to improve effectiveness in dealing with admin/bureaucracy, personnel/workforce and politics, however, is also a major area of improvement.

Figure 16. How Many Days CIOs Invested in Personal Development Last Year


Conclusion

At the end of the day, it is about people doing the job. As a leader, the CIO needs to create theplatform for people to be successful. The tools are many and diverse, and must fit the organization'sculture, national laws and union influence, when appropriate. Hiring, firing, sourcing or in-housedevelopment of the right talent at the right time is still very much an art that takes skilled leadership.Talent development also includes CIO development, and the love/hate top 10 list indicates that akey area for CIO development is change management.

Recommendations

When building a talent platform:


■ Make talent development a priority. Focus on creating a platform for individual success andflexible placement of talent.

■ Do not forget to develop your own talent as a CIO and beyond, contributing to digital as a teamsport.

Delivery Platform

The fourth layer is the delivery platform, which deals with how the organization actually deliversvalue for its stakeholders by combining all aspects of the organization. It is here where all of thecomponents come together, and the need for flexibility to meet change becomes most apparent.The need to simultaneously cope with rock-solid operations and a fluid approach to business thatcan deal with change has forced many organizations to go bimodal (see "How to Achieve EnterpriseAgility With a Bimodal Capability"). The responses to our question about a bimodal approach in thisCIO survey (see Figure 17) show that higher education institutions are well positioned. This issomewhat surprising, considering higher education's reputation for slow change — 13% alreadyhave a bimodal institution, another 31% have a bimodal IT today; another 22% say they will havebimodal IT within three years. That is even slightly ahead of the global average, with 44% ofinstitutions having some kind of bimodal today, versus 38% for the global sample. This lead willshrink in three years, because the adoption rate in the global sample is slightly higher (26%).

Figure 17. Bimodal IT Adoption



This relatively high adoption of bimodal indicates a good understanding of the digital impact onhigher education, as discussed in the value platform section. The depth of this commitment to


http://www.gartner.com/it-glossary/?s=bimodal

bimodal is still questionable, as indicated by responses to the question, "What proportion of your ITprojects and operations, in terms of money invested, run in a second, faster mode of IT?." Theglobal average is 25% (n = 318), while the higher education average is 17% (n = 22; Note: thesample is small in this case).

There are many ways to implement bimodal, as shown in Figure 18. The top two are, unsurprisingly,agile project management (75%) and multidisciplinary teams (71%), representing safe choices.Adaptive sourcing is No. 3 at 50%, showing increasing maturity in sourcing; but, again, more of anestablished approach. Higher education seems to be a bit ahead when it comes to more-advanced,truly separating Mode 1 and Mode 2. The next three approaches — different funding and businesscase criteria (42%), Mode 2 reporting outside of IT (38%), separately managed subcultures (29%) —are all more used in higher education than compared to the global sample. Again, there is thecaveat that the sample for higher education is very small (n = 24), but the list is a good indication ofcommon Mode 2 approaches. There is a fair case to be made that the top three approaches do notnecessarily mean a true bimodal organization, and that the results in Figure 17 are, therefore,somewhat optimistic.


Figure 18. Organizational Use of a Second-Faster Mode of IT

SMBs = small and midsize businesses


It is, of course, important to tie a bimodal approach back to its actual impact on organizationperformance. We asked each survey respondent to rate their organization's ability to factor digitalconsiderations into strategy and planning — on a scale from 1 to 7, where one was very ineffective,and seven was very effective. CIOs who don't have bimodal IT and don't intend to get it, score 3.9for digital performance. CIOs who have bimodal IT now score 4.4, a significant uptick. More tellingly,CIOs who are moving slowly — planning to have bimodal in three years — score the lowest, withaverage digital performance of 3.7. In this context, it is important to understand which bimodalapproaches work best. Figure 19 indicates that the most impactful bimodal tactics are not the mostused, and that we need more data and probably better Mode 2 approaches.


Figure 19. The Most Impactful Bimodal Tactics Are Not the Most Used


Vendors are increasingly a part of the education ecosystem, helping institutions deliver on theirmissions. Very few institutions can operate successfully without a student information system (SLS),learning management system (LMS), fundraising system, research management system, etc. Thelist is growing by the day. In times of change, not all vendors are created equal, as show in Figure20. Although we do not have the data split up by higher education responses, we believe it is safeto assume that even in higher education, some vendors are better digital accelerators than others,and it is worthwhile investigating how a vendor will fit into a bimodal higher education institution.


Figure 20. Partners Considered Digital Accelerators



Conclusion

It is increasingly clear that there is heavy interdependence between all of the platform layers atvarying degrees of abstractness. The perhaps more-abstract value, leadership and talent platformsare all important; however, the delivery platform is the most concrete platform yet. The technologyplatform (the next section) is, of course, even more tangible, but more in an underpinning, toolcapacity. It is in the delivery platform that people, process and technology come together to enableorganizational action. In an education ecosystem rocked by change, it is also clear that the need toinnovate is driving penetration and deepening of bimodal. Bimodal captures the platformcharacteristic of continuously building and refactoring capabilities for the future, making theinstitution more competitive.

Recommendations

When building a delivery platform:

■ Establish a bimodal approach to handle change. Design Mode 2 using the approaches with themost impact on the stakeholder value.

■ Ensure that your vendors are digital accelerators or, at least, not digital inhibitors.

Technical Platform

The final and fifth layer is the technology platform that deals with how the organization underpins itsdelivery platform with tangible technology assets. It is the most familiar platform to the CIO, and thequestion about which technology to invest in to support the organization is even older than the CIOprofession. However, technology decisions are becoming more and more important as digitaldeepens the impact on the institution. Higher education CIOs cite explicit "technology challenges(legacy, security, etc.)" as the fourth-ranked (11%) biggest barrier to achieving their objectives as aCIO (as was shown in Figure 13). This indicates that it is increasingly important to make technologydecisions that not only have a solid business case today, but also enables future flexibility. Thismakes the case for flexible platform thinking at the level of technology as well.

There is value in data such as in Figure 21, which depicts the technologies organizations will bespending the highest amount of new/discretionary funding on. Knowing where organizations ingeneral, and peer institutions in particular, are spending their resources is useful as a calibratingexercise and to ensure the institution is not falling behind. However, it does not necessarily showwhat is strategic. It mostly shows what is most expensive to do, and thus tends to favor heavyinfrastructure and back-office investments. Out of the top five technologies listed in Figure 21, it isonly the first, BI/analytics (33%) that represents a potentially new strategic capability. Analytics onlywins over a far more mundane technology, infrastructure and data center with one percentage point,at 32%. Still, analytics is a key enabler of creating new value, and ties directly back to the top-valueplatform, which has been in the top 10 for some years showing sustained investment.


Figure 21. Top Three Technology Areas Receiving Highest Amount of New/Discretionary Funding


Bringing It Together: Linking the Value and Technical Platforms

The platform approach to meet digital in this research has two major points. The first is that all fiveplatform layers are interlocking, semiporous platforms that all depend on each other. The second isthat platform thinking focuses on flexibility as a mindset to meet change.

1. Interlocking Platforms

The first platform point means that a key approach to investment in strategic technologies is to firstidentify the relevant business trends impacting higher education value creation and then build a setof strategic technologies that match the trends most important to the institution. This approach, bynecessity, needs to be industry-specific. In our research set "Top 10 Business Trends and StrategicTechnologies Impacting Higher Education in 2016," this is the approach we offer. This includes


toolkits for customizable lists, because it is very important to build priorities relative to your owninstitution, rather than rely on a one-size-fits-all approach that will not create competitiveadvantage. Gartner seeds the lists (see Figure 22) to inspire and save time in the customizationstep. In this context, there is a lot of value in seeking inspiration from other industries that mighthave faced issues relevant to higher education earlier, or to just provide a different vantage point(see, for example, "Top Retail Business and Technology Trends").

Figure 22. Top 10 Business Trends and Strategic Technologies Impacting Higher Education in 2016


From these lists, we can make a few illustrative points that are important for the interlockingplatform approach. For example, choosing to adopt a competency-based education trend has aprofound impact on the value platform, as well as the delivery and technology platform, bringingwith it major changes. Other trends, such as reinventing credits, can be addressed in a very low-cost, flexible way by implementing open badges. This is a minor, but strategic investment that canbe undertaken in steps that allow competitive advantage and learning before a full-fledgedintegration into the delivery platform is undertaken.

2. Focus on Flexibility

The second platform point, flexibility, is at — the technology platform-level — hard to achieve.However, it can have profound effects on the choices the institution can make in all of the platformlevels. It is, therefore, worth highlighting exostructure in the top 10 strategic technology list forhigher education (as shown in Figure 22) because it is a key enabler for a flexible technologyplatform (see Figure 23 and Note 3). As bimodal and fluidity increase in importance, so doesexostructure to achieve the needed platform flexibility.


Figure 23. Evolving the Infrastructure — Next: Focus on Exostructure


Exostructure is not a single technology as such, even if it ultimately takes the form of concretestandards (see "Gaining Competitive Advantage in the Education Ecosystem Requires GoingBeyond Mere Infrastructure to Exostructure"). The standards range from very generic, such asHTTP/HTML, to industry-specific standards, such as caliper for learning analytics. These standardsenable the institution to leverage external cloud services such as Google Apps for Education (HTTP/HTML) to Intellify Learning (Caliper). In a way, exostructure can be expressed as a mindset ofmoving from a traditional "skeleton" inside support approach to an "exoskeleton" — outsidesupport strategy. The key enablers are the standards that allow leveraging external services andswitching of services, while still maintaining control of the institution's key assets — data. Of course,this approach is not without its risks, as the CIO survey question, "Which is the greater threat, newcompetitive and commercial threats or security and cyber-risk threats" illustrates. A majority ofhigher education CIOs (70%) responded that security and cyber risk are the greater threats (seeFigure 24).


Figure 24. New, Competitive and Commercial Threats Versus Security and Cyber-Risk Threats?



Conclusion

The approach of identifying business trends first, and then ensuring that impact decisions areimportant for all platform layers, is essential. However, the key idea with a platform approach is tobuild flexibility into the design to be able to change in light of changing business trends, rather thangetting stuck in a petrified organizational, leadership, skill, delivery or technical structure. This isespecially important in the case of the technical platform, just because of the very "literal" nature oftechnology. There are very specific requirements for technical interoperability, and the wrongchoices can quickly limit future choices and lead to costly "rip and replace" projects. Here, theexostructure approach of technology and (industry-specific) data standards enable the flexibilityneeded for a platform approach. However, it is important to understand that as digital deepens inthe education ecosystem, so do digital threats in terms of security and cyber risk, requiring digitalrisk awareness from the CIO.

Recommendations

When building a technology platform:

■ Establish top institutional business trends before building the strategic technology list.

■ Use an exostructure approach to maximize future flexibility.


Bottom Line

The focus is on change:

1. The value platform needs to enable change in stakeholder value creation. (Do you have theability to adapt your business/operational model?)

2. The leadership platform needs to enable quick understanding of change and fast decisionsabout resources to achieve change. (Do the institution leaders see IT as a team sport?)

3. The talent platform needs to enable putting the right people in the right place at the right time toexecute on change. (Have you created the foundation for your people to be successful?)

4. The delivery platform needs to enables coping with different speeds of change. (Does yourinstitution have bimodal capabilities?)

5. The technical platform needs to support quick change (not be a barrier to it). (Do you have theexostructure strategy to enable enough flexibility?)

One key finding is that all of the platform layers are interdependent, and they all need developmentin step with each other. There is no use focusing on just one layer, bringing it up to perfection, if theother layers are not there to support it. Therefore, a sequenced, iterative approach to maturing eachlevel is necessary. Ensure that no platform gets too far ahead to be ineffective and create frustrationrather than elation.

Methodology

This research is based on data collected for the 2016 CIO survey. Using an online survey, Gartnercanvassed Executive Programs members and other IT leaders between 4 May 2015 and 24 July2015. Gartner collected input from 2,944 CIO respondents in 84 countries and across majorindustries and the public sector. Together, these organizations represent approximately $11 trillion inrevenue and public-sector budgets, and $250 billion in annual IT spending.

Gartner designed the survey to prove or disprove a series of hypotheses devised by a core team ofGartner research analysts and Executive Programs representatives. The research involved extensivereview prior to publication. The findings from the total dataset were published in their entirety as"Building the Digital Platform: The 2016 CIO Agenda."

This data is not to be interpreted as definitive statistics because the number of respondentsrepresent less than 1% of the world's 20,000 higher education institutions. However, the data canbe used to identify approximate levels, as well as directional trends. In combination with theinformation we collect in our interaction with clients and the higher education community, the surveygives a fair picture of the situation in regions in which we have respondents (as shown in Table 1).

Gartner Recommended ReadingSome documents may not be available as part of your current Gartner subscription.


"Building the Digital Platform: The 2016 CIO Agenda"

"Top 10 Business Trends and Strategic Technologies Impacting Higher Education in 2016"

"Industries Will Become Fluid in the Era of Digital Business"

"Maverick* Research: The Future of Talent; Stop Hiring People, Start Hiring Clusters"

"Culture Change Is Easier Than You Think"

"Unwritten Ground Rules Advocates Profound Cultural Change"

"Creating the Communications Core: The CIO's Guide to Effective Communications"

"Capability Assessment Tool for "The Politics of Powerful Partnerships"

"Hints and Tips on Using Gartner Numbers When Reviewing IT Spending Plans"

Evidence

This research is based on data findings from the 2016 Gartner CIO Survey. The original survey datawas collected online from 2,944 members of Gartner Executive Programs and other IT leadersbetween 4 May 2015 and 24 July 2015.

Note 1 Beyond the 32nd Square

The phrase "Beyond the 32nd Square" or "the Second Half of the Chessboard" originates from aclassic tale about the invention of chess. It involves the problem of the human capacity tounderstand the exponential effect of doubling over time (see Wikipedia's explanation of the wheatand Chessboard problem). Several authors have used that analogy to highlight humanity's potentialineptness to fathom technological development. For example, in the book "Race Against TheMachine," by Erik Brynjolfsson and Andrew McAfee, the authors use the analogy. There are alsoseveral organizations devoted to covering this and related concepts, such as singularity.

Note 2 Explaining the Analog-Digitization-Digitalization Dimension — The LP example

A simple way to explain the analog-digitization-digitalization dimension is to take an example fromthe music industry.

The business of the music industry has always been to sell songs to customers for their ownconsumption at their own choice of time and place.

Going back to the analog era, we find the long playing record (LP) as a key music business deliverymechanism. For several reasons the industry chose to switch to a digital format; the CD. However,this did not change the business and delivery model. Customers still had to buy full disk with 10-plus songs, even if they were only interested in one or two of them. This is an example of puredigitization. However, the digitized content soon enabled services, like Napster, that enable peopleto download just the songs they want. At that time, there was no way for a customer to pay for


https://en.wikipedia.org/wiki/Wheat_and_chessboard_problem

https://en.wikipedia.org/wiki/Wheat_and_chessboard_problem

http://raceagainstthemachine.com/

http://raceagainstthemachine.com/

http://www.33rdsquare.com/2011/12/about-33rd-square.html

content. This was changed when Apple introduced a new business model based on a fully digitizeddelivery system (iTunes and iPods). The key element in this change, however, was not only thedigitized delivery but also the digitized micropayment process enabled by the iTunes store. Thesetwo components enabled a new digitalized business model that allowed profitability even with aprice per song of $1. This was impossible in the analog distribution model. Today, the digitalizationof the music industry business model has gone even further, with services such as Spotify andPandora, where customers do not own any music, but subscribe to a vast library of songs.Streaming the songs just in time.

This is a very good example of how digitizing assets enable new digitalized operational modelsfurther down the line, and not even thought of at the moment of digitization. With this example inmind, it is clear that no digitalization will happen without prior digitization, so at least the first step isclear.

Note 3 "Exostructure" Explained

In an increasingly networked world, competitive advantage depends on the speedy leverage ofexternal services. The power of the education ecosystem comes from interoperability — notisolation. This need to focus on external interoperability, the exostructure, is an inevitableconsequence of cloud and consumerization. The exostructure is necessary to leverage the fullpotential of the education ecosystem. The exostructure concept is about building an "exoskeleton"of services that support the institution from the outside rather than from the inside. The buildingblocks are standards such as eduPerson and Metadata for Learning Opportunities (MLO) that allowa freer flow of information between education ecosystem players. When done right, the exostructureapproach enables institutions to leverage industry (and other) best-practice services from the cloud,rather than having to bring them inside the campus walls. The exostructure strategy enables a muchmore flexible and agile IT service approach that can adapt to the seemingly inevitable disruption ofthe education ecosystem. This institutional shift of mindset from infrastructure to exostructure is akey to success in an increasingly dynamic and expanding education ecosystem (see "GainingCompetitive Advantage in the Education Ecosystem Requires Going Beyond Mere Infrastructure toExostructure").

More on This Topic

This is part of an in-depth collection of research. See the collection:

■ 2016 CIO Agenda: Global Perspectives on Building the Digital Platform


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Documents

2016 CIO Agenda: A Higher Education Perspective...Figure 21. Top Three Technology Areas Receiving Highest Amount of New/Discretionary Funding.....30 Figure 22. Top 10 Business Trends