“Hail to the Chief” – the chief digital officer, that is. The Chief Digital Officer (CDO) or Chief Digital Information Officer (CDIO), is one of the most popular management members in many businesses and organizations. That’s right. Everybody wants one.
The CDO is the individual whose job is to help a company, organization or government office effectively drive growth. To achieve this, their no. 1 responsibility is to convert the traditional ‘analog’ business into a ‘digital’ one using modern digital technologies and data. Companies in manufacturing industries, for example, are turning to the CDO to further optimize their supply chains and bring digital technologies to their factories.
According to analyst firm McKinsey, the CDO role is still changing. Today’s CDO is charged with coordinating and managing changes that pinpoint everything from updating how a company works to building entirely new businesses from the bottom up. McKinsey suggests that companies bring in a CDO for two reasons. The first is when they need to approach the root causes that must be understood before any progress on digitization can be made. And the second is when the CEO realizes the organization simply cannot “go digital” all on its own.
But is the CDO a ‘must-have’ for every enterprise?
The digital deep-dive
Seems that no matter who or where we are, we’re all playing some kind of “catch-up” in a data-driven world. We’re businesses racing to transform our operations; we’re institutions and organizations handling just about everything on line; and we’re households fast becoming the smart home, all powered by the IoT.
In the workplace, to be ready for this digital deep-dive, we’re also trying to peg the best C-level exec to do the job. The CDO was created for exactly that – to manage the data and take the company forward.
Company executives are among the first to understand the necessity of data and how it will be the most critical transformation in their industry and how they view and measure the competition. Data is the key facilitator in how businesses interact with their customers, partners and vendors. That’s on the outside, but on the inside, data rules – controlling every facet of operations and more importantly, how employees are managed and engaged.
However, according to market analyst, Gartner, organizations may build their businesses on data, but they don’t necessarily manage it well. That’s why CDOs can play a valuable role in helping the organization value its data across the enterprise.
Who fits the bill?
All the research out there says that sometimes, the CIO will be a natural fit for the CDO role and other times, not. While industries such as retail or hospitality require a digital leader who is keen on customer service, sales and marketing, which may be a perfect fit for a CIO, there are roles in the manufacturing industry, that are better suited to a CDO.
If you’re a small- to mid-size business (SMB), chances are your CIO can also wear the CDO hat. But don’t be misled. You don’t have to be NASDAQ-listed to “require and hire” a CDO. For the smaller business who needs to securely access and maintain data, their CIO or CMO can fill the CDO post with a relatively short learning curve and a lot of enthusiasm.
Your organization may not have to create a new spot for the CDO. You may, for the most part, be able to combine the strengths of your CIO, CEO and IT manager into filling or even, plugging a hole. Before bringing another sailor onboard, you need to do your homework to find the right CDO:
- Before looking for a new recruit or asking your CIO to refresh their resume, your first order of business is to ‘understand’ your industry’s unique digital needs.
- Define your current data scene – data flow, access, availability, storage and security.
- Build a coherent and ‘doable’ digital strategy from the top-down and get management and key leaders on board.
- Create a CDO job description based on your new digital strategy and include exactly what your CDO needs to accomplish, which might be to increase revenues, enhance the customer experience, boost operational efficiency, penetrate new markets, lower production or admin costs, etc.
Is there a CDO in your future?
Jessica Federer, head of digital development at multinational leader, Bayer, says, “Digitization has only become an option recently. And now it’s not an option anymore. It’s an imperative. We all have to do it.”
That said, a recent Forrester survey of more than 3,000 executives focused on data and analytics found that 45% of the respondents’ companies already have a CDO. The survey also says, “As the office of the CDO grows in prominence, 2017 will witness increased adoption of critical “data middleware” – governance, cataloging, prep, and discovery software.”
Overhauling an organization for the digital age is a daunting task, but it’s a means to an end – survival. What was once a traditional ‘back office’ role, the CDO is now one of the most important roles within the organization, as company data is supported by business management systems, such as ERP or CRM. ERP systems, for example, have become a primary tool for the CDO, unlocking critical business insights from reams of company data.
Clearly, we are rooting for the CDO and for the most part, we believe that we will see a hugely increased CDO presence in the boardroom. In 2015, Gartner predicted that by year end, 25% of all large global organizations would appoint a CDO. And they did.
And in early 2017, Gartner estimated that 90% of large organizations will have a CDO by 2019. And we believe they will.