Is this really the end for the chief digital officer? – ZDNet
Something important has been missed in the clamour to make the most of digital transformation — the growth rate of chief digital officer (CDO) appointments is slowing and the role is actually in danger of dying out altogether.
Research from Harvey Nash and KPMG suggests one in five organisations employ a CDO today. The proportion is a rise on the 17 percent in 2015, but represents much slower growth than was witnessed between 2014 and 2015, when the number of firms appointing a CDO jumped from seven percent. PwC suggests just six percent of the world’s top 1,500 companies have appointed CDOs.
These figures are in sharp contrast to earlier predictions. Gartner, for example, claimed a quarter of businesses would have a digital chief by 2015, and IDC said 60 percent of CIOs would be replaced by CDOs by 2020.
So what has happened to the role of CDO? Why was the position so hyped, and how come growth in the appointment of these digital executives has slowed? ZDNet spoke to the experts to discover who is now taking responsibility for the management of disruptive innovation in modern businesses.
Understanding the rise and fall of the chief digital officer
“Some CIOs became too comfortable and conservative,” he says. “If you did the heavy IT lifting well in the not-so-distant past, you could get away with it. It’s different now.”
Organisations in the digital age need an executive that does more than the operational role of a traditional IT director. Businesses need someone that understands customer and marketing technologies — and, in some cases, that gap has been filled by the appointment of a CDO.
Cohen says that the CDO role often exists in organisations where the CIO is seen as just the back office IT guy. “It’s actually shameful that it has taken 15 years and the hype cycle of digital transformation for companies to finally recognise the importance of not just being customer-centric but being customer-empowering,” he says.
The time delay created a gap that many organisations chose to fill with the appointment of a CDO. Yet the appointment of a new C-suite professional has not been a shortcut to success. One key problem, says digital consultant and former CIO at recruitment specialist at reed.co.uk Mark Ridley, is the continued confusion that surrounds executive responsibilities.
“Barely anyone knows what digital actually means,” he says. “Everything we do as businesses is digital — there is no difference between traditional, big IT and the production of services. In transitional organisations that have a great deal of legacy IT, then the chief digital officer was probably a necessity to change the conversation in the business towards the rise of the web and social.”
The slowing in the rate of the appointment of new CDOs suggests the time for talk is over. Major organisations, in both the public and private sectors, understand the potential threat of digital disruption. They have seen the rise of firms like Uber and Airbnb. They understand that their only option is to embrace disruption.
Now, more than ever before, organisations simply need strong technology leadership. Concern over the semantics of job titles must be pushed to the background. “In the end, all a business needs is great executives — good leadership is absolutely crucial,” says Ridley. “C-suite executives must take responsibility for the things that are happening under their remit.”
Building executive partnerships to exploit digital opportunities
“The significant growth of the CDO role through 2014 was due to the lack of digital maturity in many organisations and a lack of awareness around what transformation might mean,” she says, suggesting that there is now a greater understanding of how digital disruption can affect prospects for growth.
This entrenchment of digitisation in everyday operations leads PwC to suggest that some firms are questioning whether the CDO role is still relevant. Such doubt helps to explain why the appointment rate for digital executives has stalled. Leading businesses, however, should not assume digital transformation has been achieved.
New innovations, such as the Internet of Things, automation, and virtual reality, continue to bombard the business. Businesses must continue to view digital transformation as a moving target, and boards need to draw on talented executives who, regardless of job title, understand the potential impact of transformation.
“When CIOs and CDO work together, they can form a very effective relationship,” says Heneghan. “CIOs must make sure they are part of the digital opportunity. Digital transformation isn’t necessarily the responsibility of a single individual. The board has to get behind digital.”
That viewpoint resonates with Tonini Ciuffini, who is head of information assets at Warwickshire County Council. He says executive responsibility for digital transformation is viewed as a partnership at the local authority.
Rather than having total control for all things digital, Ciuffini works alongside the head of customer service. Both executives are responsible for making sure technology is used to create digital services that deliver better customer service. “It’s a relationship that works really well,” says Ciuffini.
“IT is about partnerships. I can’t just tell the rest of the business how to use systems and services. I have to understand what the organisation requires and use my knowledge to help employees see the art of the possible. You need to work with the rest of the business to deliver the services that users need.”
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