Today's CIOs need to figure out how to handle the total digitization of their enterprises. We are already seeing companies in which digitization spending is over 25 percent of the operating budget, and we expect that this will become common. At the MIT Center for Information Systems Research, we have done 10 case studies and a survey to understand best practices.
So far, the landscape of enterprise digitization is diverse in both management processes and spending. In a survey of over 2,012 CIOs, we found that only 39 percent of enterprise-wide investment in digitization shows up in the IT budget.
The remaining expenditures are spread throughout the enterprise--often creating six or seven islands of digitization. Typical islands include production and operations, engineering, R&D labs, knowledge work, digital products, and customer interaction, including social media, mobility and websites.
We've found that enterprises are often using one or more of three approaches to managing total digitization:
Convergence: This approach brings all digitization investments together under a single executive. It usually requires new organizational structures to create efficiencies and synergies and to increase reuse. Enterprises using this approach tend to consolidate the key assets of people, data, infrastructure, skills and management processes.