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Gartner Says the Economics of Connections in Digital Business are Accelerating by the Use of Algorithms

Gartner Research

To increase their influence, CIOs need to focus on the power, scale, and dynamics of the digital business based on connections to people and things, interconnections and relationships, and on the value of algorithms, according to Gartner, Inc. These algorithms accelerate value in the digital economy in what Gartner analysts call the “economics of connections.”

During the opening keynote today at the sold out Gartner Symposium/ITxpo, which is taking place here through Thursday, Gartner analysts described the economics of connections as the creation of value through the increased density of interactions between business, people, and things.

“Value can mean multiple things. It can be the knowledge and the insight you gain, or it can be the trusted relationships that you build,” said Frank Buytendijk, vice president and distinguished analyst at Gartner. In the end, value is what you achieve for customers or citizens. The greater the density of the connections, the greater potential value you reap.”

CIOs can create that density in three steps: Give, Take, and Multiply:
Give access to everything that’s more valuable shared than locked away.
Take active advantage of all other resources out there. Tap into the power of all kinds of computing and information networks.
Multiply by allowing your connections to interact directly with each other.

Mr. Buytendijk shared the example of Tesla, which has shared its patents on superchargers for free. He said Tesla believes that if others invest too, everyone will benefit from more pervasive and cost-effective technology. While others will benefit, Tesla understands that as everyone adopts its standards, Tesla can grow its market.

“Give and take leads to an active dynamic network of connections, in which you are the guiding light, the main influencer,” Mr. Buytendijk said. “However, the leverage is still limited. All people, business and things have value to offer. That value is only truly unlocked if they start to interact with one another. The goal becomes to multiply these connections. Facilitated and encouraged by you, but not controlled by you. Creating a tightly woven fabric, a ‘mesh’ of connections.”

Remove the Obstacles
To realize the promise of the economics of connections, CIOs have three obstacles to remove:

A control mindset
Lack of trust

“This is all about mindset,” said Mary Mesaglio, research vice president at Gartner. “Control moves to influence. Inertia is removed by divesting, and distrust should be turned into trust, within IT, within the enterprise and beyond.”

Shift from Control to Influence
To truly drive results, CIOs must evolve to becoming the trusted ally. “The trusted ally CIO is a leader for information and technology across the entire enterprise. Trusted allies have the ability to lead whether technology ownership sits inside, or beyond the IT department,” Ms. Mesaglio said.

Gartner’s 2015 CIO Agenda Survey shows that over half of trusted ally CIOs report that they lead digital teams across their enterprise, versus a third of all other CIOs. Trusted allies are more involved with business change and strategy, they do more crowdsourcing, and they work more with start-ups.

Ms. Mesaglio said that one trait that makes CIOs stand out from other executives is their “intuitive thinking”. CIOs are intuition outliers. Intuitive thinkers are better at solving complex problems in creative ways. With the arrival of the algorithmic economy, it creates opportunities for the CIO’s skills, capabilities, and insights. This will widen the circle of influence for the CIO.

Shift from Inertia to Divesting
As CIOs move on the path to create more value through increased influence, they must divest. IT organizations need to overcome the inertia that has built up over decades.

Ms. Mesaglio highlighted a few examples of where it’s time for IT to divest itself:

Legacy fatalism: the belief that you cannot get free from legacy systems. These are applications and infrastructure that either paid off long ago, or will never see a payoff. Take a good look at pet projects, technical debt, and historical duds that might be dragging the department. Cut them lose

Ownership bias: where you think that building, owning and operating yourself will lead to better results. The reality is if someone else can do it better, and will do it better, let them. For example, citizen developers, those outside the CIO’s control, are the future of software development. Find them and embrace them.

Trust and Verify
Trust is an emotion. “It is the confidence people have in your future behavior,” Mr. Buytendijk said. “Algorithms allow companies to trust people to the exact level they deserve: dynamically and at scale. Trust goes two ways. People must trust your business too, to connect to you. It is the confidence people have in your future behavior.”  

Mr. Buytendijk highlighted four essential elements to managing trust:
-produce results
-be predictable
-understand human context
-be visible

Additional analysis can be found in the Gartner report “Digital Business Gives Rise to the New Economics of Connections.”


About Gartner Symposium/ITxpo
Gartner Symposium/ITxpo is the world’s most important gathering of CIOs and senior IT executives. This event delivers independent and objective content with the authority and weight of the world’s leading IT research and advisory organization, and provides access to the latest solutions from key technology providers. Gartner’s annual Symposium/ITxpo events are key components of attendees’ annual planning efforts. IT executives rely on Gartner Symposium/ITxpo to gain insight into how their organizations can use IT to address business challenges and improve operational efficiency.

Video replays of keynotes and sessions are available on Gartner Events on Demand. Follow news, photos and video coming from Gartner Symposium/ITxpo on Smarter With Gartner, on Twitter using #GartnerSYM, Facebook and LinkedIn.

Upcoming dates and locations for Gartner Symposium/ITxpo 2015 include:
October 19-22, Sao Paulo, Brazil
October 26-29, Gold Coast, Australia
October 28-30, Tokyo, Japan
November 2-5, Goa, India
November 8-12, Barcelona, Spain