Why the Chief Digital Officer role is on the rise

By Rich Hein, CIO |  IT Management, CDO, chief digital officer

Today, technology is coming at organizations from seemingly every angle thanks to social media, mobile technology, big data, analytics, reporting, infrastructure, storage and more. How can older "traditional" companies' compete in a digital world with newer companies that were born in the digital age?

A Chief Digital Officer (CDO) may be the answer. However, this role is new, untested and is still in a state of evolution. "The current CDO will not have a 'fixed in stone' job description and will constantly watch for the other skills and roles that other CDOs play", says Andy Gilman, president and CEO of CommCore Consulting Group.

What Is a Chief Digital Officer?

The digital age is here and as more companies get onboard with the task of converting old school business into the digital world, the need for a seasoned technology and business veteran to tie all things digital together is growing, according to a recent study from Apigee, a company that works with larger enterprise organizations to develop API's and apps.

"As mobile technology and data analytics completely reshape the business landscape, building a truly digital business DNA is an imperative for survival in today's competitive app economy. Many companies are seeking CDOs to lead this enterprise-wide transformation," said Bryan Kirschner, director of the Apigee Institute.

Specifically how the Chief Digital Officer fits into the organization will vary from business to business, according to Tricia Blair, Chief Digital Officer at Lincoln Financial Group, but the CDO would conceivably be a very tech-savvy individual who truly understands the business and the vision of where the organization wants to go.

Related Story: 16 Traits of Great IT Leaders

The CDO is not there to make technology decisions or run the company infrastructure. It's a transformative role that is being used to break up the siloed functions within organizations. The CDOs are more about analyzing the data and how it relates to the business and customer experience. "The way to best describe the CDO is that you need to be a silo-buster connecting different disciplines and departments," says Gilman.

Blair notes that her CDO peers in different organizations have varied hierarchy, but with Lincoln she considers the CIO and CMO peers, as opposed to reports. At Lincoln the three core components of her position include the Web, social media and mobile technology. As CDO she sees the role as the third leg in a good foundation. "There's a focus that the CMOs take, a focus that the CIOs take and the focus of the chief digital officer that really makes for an extraordinarily strong partnership in a world that continues to get much more complex," says Blair.

CDO Role on the Rise

CDOs are being implemented primarily as a change agent as older traditional businesses work to transform themselves to a digital world. For this reason, some argue that the CDO might just be a "transformational phenomenon." The answer however is yes according to Gartner Analyst, Dave Aron's recent blog post, "The Chief Digital Officer is emerging and maturing as a role fast."

According to Gartner's data only 6% of companies have a Chief Digital Officers at the time of this article, but they are "springing up faster than we can count them," says Aron. Some of Gartner's key findings in their research on the CDO role:

The early CIO survey evidence suggests that just under 40% of Chief Digital Officers are strategic advisors to the board and CEO on digital business strategy, just over 40% are digital marketing officers, and the rest have other digital-related roles.

Companies and public sector agencies that have Chief Digital Officers are much more focused on growth (relative to cost efficiency) than their counterparts without one

Companies that have Chief Digital Officers are three times as likely to do more insourcing next year.

Earlier this year Gartner forecasted that by 2015, 25% of businesses will employ a CDO. It went on to predict that 20% of CIOs have already begun to take on the role of the CDO.

6 Keys to Success

According to Apigee's research, 83% of top digitally performing companies have an explicitly and formally appointed digital leader. In the company surveyed more than 300 IT and marketing executives in companies with more than $500 million in annual revenue and identified what they feel are the keys to the success for the CDO position. These habits were determined by survey analysis of the traits that correlated to both market success and to perceived internal success at digital transformation.

1. Earn company-wide commitment

Getting everyone on board with the digital vision can be a huge task with internal politics and an ever-changing technological landscape. "Regardless of the role, the value of collaboration and getting buy-in is critical for any project to be successful. In large corporations like Lincoln Financial Group, it takes a very complex integrated group of skills to drive to our business solutions," says Blair.

2. Develop a digital strategy mission statement

"For Lincoln, the Chief Digital Officer role is a senior enterprise leader who is responsible for end-to-end strategy, design and implementation of our digital roadmap," says Blair.

3. Embrace data-based experimentation

In many ways the CDO is about the relationship between the data and the customer. According to the Apigee survey, successful digital leaders are three times as likely to use experimentation as a decision-making criterion for investments."

4. Connect with experts

The survey reported that seven out of 10 executives say their digital transformation leader has an especially strong network of business and technology innovators. The CDO doesn't necessarily have to be the smartest person in the room. In fact, the most successful CDOs surround themselves with a strong network of innovators and experts, according their data.

5. Speak multiple business languages

The CDO needs to be fluent in all the languages of technology and business and an excellent communicator in order to get executive, departmental and everyone in between onboard with the digital vision. "Sometimes I need to be able to speak very technologically and sometimes I need to really tear that down and drive the conversation based on what is meaningful to my business partner", says Blair.

Gilman agrees, adding, "Increasingly, the CDO is being asked to explain the digital world to boards of directors. These boards tend to skew older and may or may not know much about the digital world, big data, the cloud and all the new channels a company uses to communicate internally and externally."

6. Strive for tangible goals

According to Apigee data, CDOs who have the strongest capabilities connecting digital investments to enterprise KPIs are in a better position to achieve positive digital transformation.

The Bottom Line

In today's world, conventional organizations to have overcome legacy systems and processes in order to facilitate the experience their customers have come to expect. Building and implementing a plan to do this seems to be the common theme and directive of the CDO.

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Originally published on CIO |  Click here to read the original story.
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