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CEOs are under increasing pressure to become tech-savvy due to technology’s ability to dramatically reshape business.

Demand for CEOs—even company boards—to become more tech-savvy is increasing, as digital transformation is poised to alter the competitive landscape in many industries.

“Top-level leadership is important for companies that are undergoing a digital business transformation,” said Stephanie Woerner, research scientist at the MIT Sloan School of Management Center for Information Systems Research. “This need for digital savviness doesn’t mean that CEOs are going to be coding, but it does mean that enterprises are demanding that CEOs and other top-level executives know what opportunities digital opens up for their enterprise and how to create a digital value proposition that distinguishes their enterprise from others.”

No one IT area is particularly important, though it depends on the enterprise’s strategy, Woerner said. “Eventually all enterprises are going to have have a great customer experience coupled with operational excellence,” she added. “CEOs have to be comfortable enough with digital that they can create a compelling vision for their enterprises.”

SEE: IT leader’s guide to achieving digital transformation (Tech Pro Research)

CEOs must be generally tech-savvy due to “the increasingly powerful ability of technology to radically reshape business,” said Matthew Guarini, vice president and research director at Forrester. “CEOs that understand this dynamic will enable their teams, IT and business, to explore innovative ways to leverage technology to create competitive advantage.”

The best CEOs shape thinking and clear barriers, Guarini said. “From an IT perspective, that means, rather than diving in selectively, CEOs should challenge the team to think about how to use technology to better deliver for customers,” he added.

In terms of clearing barriers, the CEO should be focused on providing the funding, resources, and relationships necessary to deliver on a technology-based future, Guarini said.

It’s often said that CIOs need to understand the business to succeed, according to Khalid Kark, US CIO program research leader at Deloitte. However, the converse is also true today, he added. “The business leaders need to understand technology enough to figure out what it can do for them, and how it can deliver value,” Kark said. “If they are not tech savvy, it’s going to be very hard for them to deliver significant value and competitive advantage.”

Projects that require sponsorship or strategic shifts must be under the review of the CEO in some way, Kark said.

It’s key to remember that digital can enable a strategy, but is not the strategy itself, Kark said. “The strategy needs to be really integrated into the choices that you want to make as a business, and how technology can help you,” he added. A CEO must understand the nuances of technology, and support the strategy IT develops.

For more tips for CEOs to maximize the value of their teams and digital transformation efforts, click here.