What is a chief digital officer? Everything you need to know about the CDO explained

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What is a chief digital officer?

Definitions of the role of chief digital office (CDO) focus on the core responsibilities of this new executive role — the transformation of traditional operations using digital processes. CDOs aim to generate new business opportunities, revenue streams and customer services from the adoption of digital technologies.

Albert Ellis, chief executive at recruitment firm Harvey Nash, says his firm has placed a number of CDOs, particularly in large companies in the US. “The reality is CDOs are business-facing individuals that often don’t have a background in technology,” he says. “They’re specialists in digital business models.”

How does the CDO role differ to that of the CIO?

Because the role is so reliant on the use of technology, there is an overlap with the CIO position — and there’s some competition as a result, says Ellis. Yet rather than being experts in IT implementation, CDOs are commonly characterised as change agents.

“Where CDOs can be very effective, and can initiate new approaches quickly, is where they buy cloud services and avoid in-house IT development in a traditional sense,” says Ellis. “CIOs remain the owners of the technology infrastructure of any company.”

CDOs tend to be strong communicators. They talk about the power of disruption and get people to buy into change. Darren Curry, CDO at NHS Business Services Authority, says the role is about more than implementing digital services.

“I support people, identify a vision and enable our people to do their very best,” he says. “I see myself as leader who removes the blockers and barriers to allow our people to achieve their aims for our services. That’s what I feel any leader — whether that’s a CDO or another senior role — should be working to achieve.”

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Why did organisations appoint CDOs?

Back in the dim and distant past of 2013, businesses saw the rapid rise of Amazon, Uber and Airbnb, feared the potential power of digital disruption, and questioned whether the traditional IT leader was the right individual for the job.

Some of these organisations appointed CDOs to see through a digital transformation project. KPMG director Peter Ironside says his firm’s research suggests that when companies have appointed digital chiefs, half are dedicated CDOs and the other half are CIOs acting as CDOs.

PwC consultancy practice Strategy& reported 19 percent of the world’s 2,500 largest public companies had a CDO in 2017. In Europe, that figure was as high as 38 percent. Those figures make it sound as if the CDO has become an established presence in the c-suite, helping to transform organisations through digitisation.

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What happens to the CDO when digitisation is done?

Digital transformation is too often defined as a one-off process. In fact, digital transformation is better thought of as a continual work in progress.

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As we’ve learnt during the past decade of rapid and radical change, new technology is always — to quote tech analyst Gartner’s hype curve — climbing the peak of inflated expectations. Businesses have had to deal with the emergence of mobility, cloud and big data, and soon they’ll be dealing with artificial intelligence, 5G and quantum computing.

This process of continual evolution should be more than enough to keep digital leaders busy. Yet emerging technology is no guarantee that organisations will continue to employ CDOs.

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What is the threat to the CDO role?

The threat to the long-term existence of the CDO role can be traced to its origins. CDOs were appointed to run change projects. While digital transformation is now accepted as a continual work in progress, the business backing for digital transformation projects is not.

Change projects tend to have a finite lifespan with ring-fenced funding and clear aims, such as implementing cloud services or creating multi-channel operations. When these projects end, so might the position of CDO. For Ian Cohen, CIO at Addison Lee, the death knell is already sounding.

“Chief digital officer has had its time,” he says, recognising the inherent association of CDOs to big-bang transformation. “Most digital people describe themselves as a catalyst for change. That’s great but if you know your chemistry, you’ll know that a catalyst does its job in the chemical reaction and ultimately disappears — that’s hardly a career.”

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What will happen to CDOs?

The CDO Club, which is the world’s largest community of C-suite digital and data leaders, says it has 5,000-plus registered members. How many will still be in situ by the end of the decade is up for debate. Perhaps the interesting aside is that the CDO Club also includes data leaders. To make things just a little more confusing, in some contexts CDO stands for chief data officer — and experts on all sides agree the data leadership role is on the up.

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It is, however, unlikely that digital chiefs will sidestep into data leadership. While digital officers major on business leadership and customer experience, data officers are experts in analytics, algorithms and the application of insight.

What keeps CIOs and chief data officers relevant is their management of a specific resource — systems and data respectively. Chief digital officers, on the other hand, manage something far more ephemeral: digital transformation. To survive, they’re going to have to take a different route and manage something else.

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What comes after the CDO role?

Someone that’s already moved into new areas is Alex von Schirmeister, who joined RS Components in late 2015 as CDO. It quickly became clear that digital acceleration would require him to assume an expanded role, with responsibility for product development through technology implementation and innovation.

“You naturally start taking on much broader roles than you might have in the past,” says von Schirmeister, who is now chief digital, technology and innovation officer at his firm. “You realise quickly that you don’t just need to be the CDO — you also need to think about product development, building the technology and innovating.”

This continual evolution in the digital leadership role is as true for CIOs as it is for CDOs. Take Ian Cohen, who says his global CIO role at Addison Lee is more akin to that of a chief product and technology officer. These executives have end-to-end accountability for everything from their company’s product propositions through to the technologies used to deliver them.

“This is an emerging class of business and technology leader,” says Cohen. “Such roles require a sophisticated combination of an obsession with the customer experience, highly attuned business and commercial skills combined with a deep grasp of the technical and a pragmatic approach to getting it done.”  

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