Digital transformation: CDO or CIO — and does it matter anymore?

As the dig­i­tal imper­a­tive only gets greater for busi­ness­es of all sizes and sec­tors, the ques­tion often aris­es of who owns dig­i­tal? Do organ­i­sa­tions need a chief dig­i­tal offi­cer – a CDO? Or should respon­si­bil­i­ty sit with the chief infor­ma­tion offi­cer – the CIO?

A year ago, the CDO appeared to be well and tru­ly on the rise in order to fill a per­ceived gap between IT and the board. They seemed to be on everybody’s lips and grow­ing num­bers of organ­i­sa­tions were appoint­ing one.

But a new report from Har­vey Nash and KPMG – the result of respons­es from near­ly 3,400 CIOs and IT lead­ers around the world, the largest sur­vey of its kind – finds that the argu­ment over who owns dig­i­tal is sub­sid­ing.

CDOs are still quite preva­lent, but the rate of increase has slowed down. Now, the pro­por­tion of organ­i­sa­tions with a CDO stands at one in five. The UK is slight­ly above the trend here, with 22 per cent of organ­i­sa­tions hav­ing a CDO com­pared with 19 per cent glob­al­ly.

Our research also shows that the exis­tence of the CDO role is close­ly linked to IT bud­get size. Com­pa­nies with IT bud­gets above $100 mil­lion are twice as like­ly to have a CDO as those with IT bud­gets below $100 mil­lion.

But nev­er­the­less, the rise of the CDO across all organ­i­sa­tions appears to have mod­er­at­ed after the break­out year of 2015.

CREATIVE CIO

Why is this? In many cas­es it’s because the CIO has stepped up to take a more strate­gic, busi­ness-enabling role, often report­ing direct­ly into the chief exec­u­tive – what our report terms the birth of the “cre­ative CIO”.

The cre­ative CIO is mov­ing away from mere­ly “keep­ing the lights on” and instead focus­ing on enabling the busi­ness to cre­ate val­ue by har­ness­ing social and tech­ni­cal dis­rup­tion. They are becom­ing trans­for­ma­tion­al busi­ness lead­ers, tech­nol­o­gy strate­gists and busi­ness-mod­el inno­va­tors.

They are increas­ing the depths of their rela­tion­ships across the organ­i­sa­tion beyond their tra­di­tion­al “com­fort zones” of finance and oper­a­tions in order to ensure dig­i­tal strat­e­gy is joined up. They also often use their own IT teams and ser­vices to act as a test-bed to dri­ve inno­va­tion, free­ing up fund­ing for this inno­va­tion by deliv­er­ing sav­ings in oth­er areas, for exam­ple sim­pli­fy­ing the IT estate through exploit­ing cloud and oth­er tech­nolo­gies.

Tech­nol­o­gy sim­pli­fi­ca­tion is crit­i­cal for suc­cess­ful cloud adop­tion. Near­ly half of respon­dents quot­ed inte­gra­tion with exist­ing archi­tec­ture as one of the biggest chal­lenges to cloud adop­tion, some­thing that must be addressed to pre­vent sig­nif­i­cant issues aris­ing in the future.

DIGITAL STRATEGY

Many more organ­i­sa­tions are tak­ing a mature, com­pa­ny-wide approach to deal­ing with the dig­i­tal chal­lenge. The num­ber of IT lead­ers report­ing an enter­prise-wide dig­i­tal busi­ness vision and strat­e­gy increased to 35 per cent, a 28 per cent jump from last year. An addi­tion­al one in four (24 per cent) have dig­i­tal strate­gies for indi­vid­ual busi­ness units. As dig­i­tal increas­ing­ly becomes crit­i­cal to busi­ness­es, only 13 per cent of respon­dents have no dig­i­tal strat­e­gy and no plans for one.

More­over, 59 per cent of organ­i­sa­tions are look­ing to imple­ment agile meth­ods to devel­op and deliv­er IT ser­vices. “Next gen­er­a­tion” oper­at­ing mod­els such as agile and devOps offer the prospect of con­tin­u­ous deliv­ery capa­bil­i­ty. The goal must be to sim­pli­fy organ­i­sa­tion­al struc­tures to deliv­er suc­cess­ful­ly both a more agile and inno­v­a­tive busi­ness envi­ron­ment, and a more engag­ing cus­tomer expe­ri­ence.

BUSINESS AS USUAL

In short, with dig­i­tal becom­ing more of a mat­ter of busi­ness as usu­al, the debate becomes less about own­er­ship and more about sim­ply get­ting on and doing it – enabling it to hap­pen. The chal­lenge is mov­ing from one of own­er­ship to one of deliv­ery.

As dig­i­tal strate­gies grow in preva­lence and matu­ri­ty through organ­i­sa­tions, we may well reach an inflec­tion point where the growth in the CDO role lev­els out and then begins to decline.

Per­haps of more press­ing sig­nif­i­cance to the CIO, and lead­er­ship as a whole, is the ques­tion of where they will get the dig­i­tal skills they need. Some 65 per cent of respon­dents in the sur­vey said a skills short­age was pre­vent­ing their organ­i­sa­tion from keep­ing up with the pace of change.

The challenge is moving from one of ownership to one of delivery

Equal­ly press­ing, organ­i­sa­tions need to ask them­selves where they want to be in the dig­i­tal rev­o­lu­tion – inno­va­tors or fast fol­low­ers. There is a con­scious deci­sion to be made and it needs to be made very soon if it hasn’t been made already.

As with every­thing dig­i­tal, there is lit­tle time to dal­ly.

For more infor­ma­tion about the 2016 Har­vey Nash/KPMG Glob­al CIO Sur­vey and to request a full copy of the results, please vis­it www.hnkpmgciosurvey.com

CREATIVE CIO

DIGITAL STRATEGY

BUSINESS AS USUAL

The challenge is moving from one of ownership to one of delivery