the health strategist
institute for strategic health transformation
& digital technology
Joaquim Cardoso MSc.
Chief Research and Strategy Officer (CRSO),
Chief Editor and Senior Advisor
October 27, 2023
What is the message?
The 2024 Gartner CIO Agenda underscores the challenges faced by CIOs worldwide due to expected budget increases only slightly above inflation and below anticipated revenue growth.
To address this discrepancy and enhance efficiency, the article proposes adopting a franchise model for CIO-CxO partnerships.
This model, built on three pillars – co-leadership, co-delivery, and co-governance – empowers CIOs to meet or exceed digital technology investment outcomes and drive business success.
What are the key points?
Budget and Revenue Challenges:
CIOs face limited budget increases, which fall short of revenue growth expectations. This necessitates a focus on improving efficiency in addition to managing growing demands.
Franchise Model for CIO-CxO Partnerships:
The article suggests adopting a franchise model to address the efficiency gap. This model emphasizes co-leadership, co-delivery, and co-governance as its three key pillars.
Pillar 1: Commit to Co-lead:
CIOs encourage CxOs to co-lead digital delivery to elevate roles and outcomes. Business leaders must view digital delivery as a shared responsibility, requiring creative preparation to take on this role.
Pillar 2: Co-deliver with Fusion Teams:
Shared accountability is cultivated by building trust and transparency with CxOs and business teams. Creating fusion teams comprising IT and business members simplifies the process and enhances engagement.
Pillar 3: Co-govern to Minimize Risk:
Effective governance and risk management in a franchise model can be achieved by scaling governance with communities of practice (CoPs). These serve as feedback mechanisms and ensure coordination and standardization.
Design and Evolve Your Franchise Model:
The franchise model’s design is flexible and context-dependent. Factors such as technology proficiency, enterprise culture, and regulations influence the division of labor between IT and business units.
DEEP DIVE
CIO Agenda 2024 – Adopt Franchise Best Practices to Improve Digital Delivery
Gartner
Introduction
The 2024 Gartner CIO and Technology Executive Survey found that CIOs in all regions of the world are faced with expected budget increases that are only marginally above projected inflation, and well below expected increases in revenue.
In other words, in addition to the increased demand, there will be an ongoing need for greater efficiency. Based on data from that survey, this year’s CIO Agenda details how to adopt a franchise model as a design template for CIO-CxO partnerships, building on three pillars: co- leadership, co-delivery and co-governance.
Redesign CIO-CxO partnerships
CIOs who co-lead and resource digital delivery teams end-to-end with their CxOs are more than twice as likely to meet or exceed the outcomes from their digital technology investments compared to CIOs who leave the delivery of digital capabilities to their IT departments.
To capitalize and foster CxOs’ commitment to digital leadership, CIOs must identify digital leadership profiles in the executive leadership team and tailor their engagement to help these partners become more proficient.
Franchised digital delivery: 3 pillars to success
Gartner research found that CIOs who are most effective at delivering business outcomes from digital initiatives co-own the responsibility with their CxO peers by adopting a franchise approach to digital delivery.
But how does a franchise model for digital delivery work? Much like in a franchise business model, CIOs harness ecosystems and work with CxOs to:
- Overcome budget and talent constraints
- Manage compliance and reduce risk
- Empower and equip business teams to deliver secure and sound digital capabilities
The 2024 Gartner CIO Agenda identifies three core behaviors, which we will refer to as the “pillars of the franchised digital delivery model”: co-lead, co-deliver and co-govern.
PILLAR 1
Commit to co-lead
A distinguishing feature of franchiser CIOs is that they encourage their CxO peers to co-lead digital delivery. Those CIOs have elevated their roles and that of their IT departments, not by focusing on the proverbial “seat at the table” or by “shaping demand,” but by encouraging, educating and equipping business leaders and their teams to co-lead their business areas’ digital initiatives along with them.
For business leaders to commit their own time, their teams’ time and their resources to digital delivery, they first need to view it as a shared responsibility. Herein lies the initial challenge to overcome. Not all CxOs are equally prepared to lead a digital delivery team, so you must be creative in how you prepare your CxO peers to take on this digital leadership role.
PILLAR 2
Co-deliver with fusion teams
To cultivate shared accountability, franchisers should build trust and transparency with their CxOs and business teams. Trust is earned through purposeful and authentic engagement.
Creating fusion teams of IT and business team members creates that engagement and simplifies the process of gaining access to the tooling and technology platforms required to be effective.
One of the most impactful ways you can approach this opportunity is by engineering shared, composable technology platforms that provide technologists within and beyond IT with everything they need to build digital capabilities.
PILLAR 3
Co-govern to minimize risk
To be effective at managing compliance and risk in a franchise model, you need to find ways to scale governance. Work with your CxOs peers to shift to an orchestration approach that mitigates the risks of franchising digital delivery while also retaining its benefits.
Communities of practice (CoPs) are one of the most impactful ways you can overcome the risk of a franchised model leading to the creation of “islands” without coordination or standardization. CoPs also serve as valuable feedback mechanisms that allow you and your peers to collect feedback, and then revisit and update governance policies and standards.
To successfully launch CoPs that combine IT and business technologists, we recommend that you work with business area leaders to identify and enlist active technologists who have the knowledge, motivation and domain expertise.
You must ensure the CoP objectives and scope are defined by community members. It’s also important to adapt the IT engagement approach to advise on and guide safe and secure development practices.
You need to enlist a community leader from within each CoP to act as a liaison with other CoPs, and help set up training, guidance and support. Work with your CxO peers to co-create common metrics across communities to measure engagement, not just outcomes.
Design and evolve your franchise model
Franchises take many forms
Just as business franchises can take many different shapes or forms depending on the context, there is not one way to design the digital delivery franchise. Building on the foundational pillars (co-lead, co-deliver and co-govern), you should take a deliberate approach to engaging CxOs as digital delivery franchisees, rather than keeping digital delivery within your IT department.
The division of labor between IT and different business units depends on but is not limited to:
- Technology proficiency of the business area
- The number of business area resources dedicated to technology work
- Enterprise culture
- Regulations
- CEO sponsorship
Gartner CIO Agenda
Gartner CIO Agenda is based on the 2024 Gartner CIO and Technology Executive Survey. Qualified respondents are the most senior IT executives for the overall organization or their part of the organization.
