The concept of ‘digitization’ within business should not be new to anyone, but a surprising number of companies have been slow to update their processes. In a world evolving at a never before seen pace, the notion of ‘going digital’ is more than a buzzword for management consultants to throw around, it is a matter of urgency. And companies are beginning to understand the necessity for a Chief Digital Officer. The CDO is, in a sense, today’s Chief Technology Officer; a vital cog in the machine that so many companies have up until now, neglected.
Earlier this month, IBM appointed a CDO for the first time, in what is something of a declaration that they are a company - perhaps naturally given their product - that are committed to moving to digital. Former AOL president and former CEO of web advertising company Razorfish, Bob Lord, has been appointed by the computing giants to run its digital sales and marketing, its developer ecosystem and its digital platform. In a statement circulated to employees at the New York-based multinational, the company said the appointment will ‘accelerate and scale all aspects of IBM’s digital presence, operations and ecosystem.’
IBM’s appointment follows a wider trend of some major companies appointing CDOs - often for the first time. The likes of Nike, Samsung and the New York Public Library have all appointed CDOs within the last 90 days. Since January 1st, we can include companies of the scale of Voya Financial - an $11 billion giant - and GE Oil & Gas - a company with over 15,000 employees. So, clearly, the role’s importance is becoming properly recognized. Starbucks has a CDO, as do Luis Vuitton and Cisco, and you should too.
Put simply, the CDO’s role is to take remaining ‘analog’ areas of a business to digital, which will not only streamline business processes but will open up new areas of opportunity. In order not to be left behind by trend-setting and up-to-date competitors, all companies should be conscious of their transformation to digital - not just as a matter of getting ahead or keeping up, but one of survival. And a dedicated CDO is the most effective way of ensuring the change is efficient and smooth. In 2012, Gartner VP David Willis said: ‘the Chief Digital Officer will prove to be the most exciting strategic role in the decade ahead,’ and his prediction was not as hyperbolic as it may have first seemed. As ‘every budget [is] becoming an IT budget’, allocating funds for a dedicated officer is now more vital than ever.
Below, we look at four key reasons why a CDO is such an important thing.
Unparalleled by any advancement in recent decades, mobile technology and online technology is shaping how consumers behave, and the industry is moving far too quickly for some companies to keep up. Services that combine both social media and local searches are becoming the norm, and if your business doesn’t in some way react to the move toward mobile internet access over desktop, you risk missing a huge portion of the market. Your customers and their habits are changing, and you should be too.
Building a clear vision
A digital strategy is at its strongest when the company creating it has a clear vision. The idea of ‘going digital’ only works when there is a clear strategy in place, and the role of the CDO is to bring everyone together, utilize their cross-channel experience and lead the company towards the same goal. The CDO is now the ‘transformer in chief’, and they are expected to manage and coordinate wholesale changes to a company’s processes. Without one, digital strategy risks being designed too much by committee.
Data and analytics
The necessity for using data and analytics in your day-to-day tasks is nothing new, but a qualified CDO will have the tools and expertise to ensure that you are using them properly. Many companies boast about their use of data, but without an expert they risk going in blind. Data analysis can help you identify customer behaviour and how to best exploit it, but the majority of data use is ‘dumb’. Determining behaviour is all very well, but analyzing the motives behind that behaviour is where the true value lies; a CDO should have the tools to do so.
Don’t be left behind
And most importantly, in the world of business, sitting on one’s hands is by no means a safeguarding measure; it is potentially disastrous. Almost every area of business can or already has been digitized, and many argue that the CDO will become so important as to warrant a space at the boardroom table. The CDOs job is not simply to fit in with the current digital trends or to get a company up to speed - though that may be the initial job description - it is to recognize the now permanent importance of digital and to find new ways to exploit the changing landscape.
Whether you are looking to digitize, or to open up new areas of influence through a clever digital strategy, appointing a CDO may well be the best course of action. You can hear from industry leaders and active CDOs at the Chief Digital Officer Forum on April 14 and 15 in London.