IT Focus Area: strategy
September 16, 2015
What You Should Know About the Emergence of the Chief Digital Officer
Data is transforming today’s businesses.
All verticals and market segments benefit from improved reliability and increased availability — along with the ability to deliver a highly personal, optimized user experience. Leveraging data enables enterprises to be more agile, make strategic decisions faster than ever and improve their operational efficiency.
Enterprises that analyze their data and create value from it will outperform their competitors. According to a study by McAfee and MIT, “companies that inject big data and analytics into their operations show productivity rates and profitability that are 5 to 6 percent higher than those of their peers.”
At the same time, data threatens to overwhelm businesses. The amount of data is growing exponentially, and most enterprises cannot keep up.
Many enterprises rush to the cloud to quickly address their data storage and management issues. However, jumping into any new technology without a strategy can put you at risk. Tools alone will not solve the problem.
Instead of focusing on tools, enterprises need to address data in a holistic manner — with the right equipment, collaboration capabilities, and people. A growing number of enterprises are hiring Chief Digital Officers (CDOs) to make sense of their data and turn it into actionable insights.
How a CDO Helps Gets More Value From Data
Fortune 1000 companies are starting to have CDOs. A CDO is in charge of an enterprise’s digital strategy — ensuring that you provide customers and employees with a great digital experience.
A CDO will analyze your data, determine what is important and prioritize the actions you must take to remain competitive. They can tell you what customers are doing, thinking and feeling. They can also help you identify new markets and areas for growth.
Since your digital strategy impacts your entire enterprise, your CDO will move across all silos and lines of business. A CDO is a “bridge builder” who supports your entire C-suite and works with many personality types.
A CDO is a separate role within the C-suite. However, they share many traits with CIOs and CMOs. They are tech-savvy and can speak the same language as your power users. They also have IT domain knowledge, so they can manage conflicts of interest or select between competing tools. At the same time, they are business-savvy and can look towards your enterprise’s future.
According to Red Hat: “The new digital leader has his or her feet squarely in both camps — and addresses the challenge of providing customized experiences as well as the best technologies and platforms to enable the data-driven, digital business to deliver those experiences.”
The Top Priorities of a Chief Digital Officer
CDOs help you focus on the big picture and your long-term strategies. This allows you to be forward-looking, as opposed to reacting to changes as they happen.
Here are the top CDO priorities:
1. Evangelize the benefits of the social enterprise.
The CDO is the leader of your social enterprise. This means that their work directly impacts your employees, partners, suppliers and customers.
A CDO must tell a story that is relevant to all of these groups and work to improve their user experience. All of your technology — from your network to your applications — affects this experience.
Each layer in a business ecosystem contributes to The Social Enterprise of your company. It is critical to understand your own ecosystem and how leadrship can affect each aspect of it.
2. Make data-driven decisions.
Executives want proof that something will work before they invest in it.
A CDO ensures that you have the right data to support your business cases. This will help you get buy in for key programs and technologies.
The CDO also analyzes data and turns it into actionable business insights. This ensures that all strategies supports facts not feelings.
3. Balance the needs of external customers with the needs of internal customers.
A CDO can promote your new features to the field, so customers will learn about them and use them. Then, your CDO can identify gaps in the customer’s digital experience. This will help you improve your user experience while customers get more value from your products. It will also help you align your production cycles with your consumption cycles.
A CDO can also help business units get buy in for new projects. For example, several business units might perform similar activities under separate budgets. A CDO can identify which activities are the most important and get certain groups to sponsor them. This helps you optimize the IT spend and increase your return on investment.
4. Recognize which trends require your investment.
In today’s fast-paced business landscape, many trends demand your attention. However, many organizations implement trendy technologies without developing a strategy or understanding the key challenge the technology solves.
A CDO can determine which trends matter and where you should invest your resources. They can work across lines of business to raise awareness about key trends and get buy in to invest in new technologies.
5. Strengthen your partnerships.
Business units often form partnerships without knowing how they will impact the entire organization. However, you can only commit to so many partnerships.
A CDO can help your organization make the most of its partnerships. For example, your product development team may partner with a third-party app to allow customers to get more value from your product. A CDO can make sure that your sales and marketing teams promote the app to your customers. A CDO can also create a plan to promote the app on social media, in your marketing materials and at trade shows.
If your partnership is one-sided, it will fail. A CDO can build a “unified front” to help your partnerships and programs succeed.
A CDO can also ensure that you have a strong presence at conferences and events where you can meet potential hires. This will give you edge when everyone is competing for the same pool of candidates.
6. Drive collaboration.
When multiple business units compete for the same piece of the pie, no one wins. A CDO can ensure that stakeholders work together to achieve a common goal.
For example, if a business unit wants to purchase new technology, a CDO can help them determine how it will impact the entire organization. If the technology will cross multiple lines of business, a CDO can bring other departments on board.
A CDO can also show lines of business how to integrate the technology, making sure they address security from the get-go. And — most importantly — a CDO can help business units use the technology to drive profit.
How CDOs Can Support CIOs and CMOs
Although the CDO supports the entire executive team, the role is closely aligns with the CIO and CMO.
A CIO can work with a CDO to:
Investigate how the CIO’s goals currently align with the business’ goals. Then, they can collaborate to respond to business needs in real time. For example, the CDO can help the CIO offer premiere SLAs, tools and experiences. This will help people see the IT organization as a trusted advisor who can solve their challenges.
Consistently promote the IT organization’s activities to the C-suite. The CDO can help frame the CIO’s message, so it resonates with the C-suite. The CDO can also get the message across by publishing news about IT’s accomplishments and ensuring that the C-suite reads it. This will help show the IT organization’s value and strengthen its brand internally.
Champion cloud compliance. The average enterprise uses 545 cloud services from an average of 14 different cloud service providers by 2017. However, the IT organization may only know about a fraction of these. According to Skyhigh Networks: “enterprises are taking action on the popular cloud services they know of and not on the cloud services that post the greatest risk to their organization.”
The CDO can help the CIO close the cloud gap by:
Identifying use cases that caused employees to purchase cloud services.
Working with your security, governance and knowledge management teams to address concerns without disrupting your critical business functions.
Championing the changes across your organization to get buy in and prioritize your efforts.
Provide your internal customers with a better experience. Every minute an internal user spends fighting with technology is lost money, as your IT organization must spend most of its time troubleshooting issues and fighting fires. A CDO can turn this around, so your IT organization spends most of its time driving revenue.
Prioritize gaps in your IT spend. The CDO can help determine which gaps are the most relevant to the business, which will help the CIO get critical projects funded.
CMOs can partner with CDOs to:
Identify where you have gaps in your customer experience. The CMO and CDO can develop a plan to keep your enterprise sharp and responsive. For example, the CDO can give the CMO insights into all of your touch points. This will improve your performance and customer experience.
Improve your messaging. Different groups may send different messages to your customers. This can cause confusion and lengthen your sales cycles. A CDO can work with your CMO to ensure that your messages are consistent. Your CDO can also serve as an evangelist who gets employees and customers excited about all the good things you are doing.
Drive more value from your campaigns. A CDO can make sure the CMO has the right strategies and technologies to gain insights from your marketing campaigns. This will help your CMO improve your campaigns’ results and increase your revenue. They can work together to make decisions based on data, not on hunches.
Prioritize your adoption of business intelligence tools and techniques. This allows the business to fine-tune your feedback loop, so you can get real-time input from your employees, customers, and partners.
CDOs can also help you attract and retain talent. For example, a CDO can help HR market itself, so you can attract high-quality employees. One of most important business metric is employee productivity. A CDO can work with the CIO to provide employees with the tools they need to be productive. In addition, a CDO can boost employee morale. Employees don’t quit jobs; they quit management. The better your management team, the more likely employees will stay with you for the long term.
A CDO Does Not Replace a CMO or CIO; This Person Helps Them
Other members of the C-suite may view a CDO as a threat who is trying to “take over” their line of business. However, CDOs can bring you many opportunities. If you capitalize on your CDO, you can innovate, improve your digital experience and fuel your growth.