In September 2012, I authored a note entitled “Does Your Business Need a Chief Digital Officer?”. I am noticing a distinct change in attitudes over the last few months. Earlier this year, for many this was seen as a hyped, unecessary, annoying addition to the pantheon of CxO titles. At our Orlando and Barcelona symposia in the last few weeks, we predicted that 25% of companies would have a CDO by 2015, and I heard of a lot of companies recognizing the need for, trying to hire, or trying to shift their CIO to become a Chief Digital Officer. (I heard this topic less at our Tokyo symposium, and am keen to hear about the Australian and Asian situation next week at our Gold Coast symposium.)
What is a Chief Digital Officer? If we split a company into back office (running the internal operations), front office (the customer experience) and head office (deciding what businesses we are in, and our strategic posture to win in those businesses) – the CIO role has been traditionally about the digital back office (automating and informating internal processes). The CDO role fills the gap – digital front office and digital head office.
Some organizations are using the title more to mean Chief Digital MARKETING Officer – which is a very limited and limiting view of the role. The full potential of the CDO role includes using information and technology to drive value into and from the customer experience – much more than just marketing, and also a digital view on enterprise business strategy – including business extensions based on digital capabilities – such as logistics companies providing financial services to their clients based on their knowledge of their trade flows.
It is possible for the CIO to become the CDO, or there to be a separate CDO. The decision should be based on capability, capacity, need and appetite. If the CIO becomes the CDO – they must make sure they have or develop the capacity, skills and internal and external brand. If there is a separate CDO, there must be strong integration governance between the two. What is not OK is for there to be no coordinated digital leadership, and instead multiple uncoordinated digital initiatives.
The bottom line is – the digital world is moving fast (mobile, social, cloud, big data, BYOD right now; big trends on the horizon like 3D printing and the internet of things). Each public and private sector enterprise has to think through whether and where digital front office and digital head office gaps exist, and if so how to fill them.