Chief Digital Officer – necessary role or fabricated idea?

SUMMARY:

The Chief Digital Officer makes for a sexy business card title, but does the role matter?
Recent events and videos shed light on the problems the CIO is facing and why the CDO matters
The CDO may be a transitional role, but the IT/business divide is the real issue

exec - superheroThe Chief Digital Officer is not a unicorn. That much I can attest to, having seen my share of business cards with that exact title on them.

But is the role necessary? And who would step into the position – someone from IT, or someone from the business side?

Our own Martin Banks opined on this topic last week, fresh off a trip to the Economist-sponsored CIO Forum in London. In the resulting piece, The CIO is dead, long live the CIO, Banks framed the argument in terms of the CIO readiness to take on the CDO’s envisioned duties.

The gist: The Chief Digital Officer is being pushed heavily marketed as the solution for companies in pursuit of digital re-invention. But as Banks noted, CIOs aren’t about to relinquish the digital role to another person without making their own case. The CIOs Banks heard from argue they can do the CDO’s job, and that they are in a unique position to do so, due to their purview into the information assets across the company.

In his closing view, Banks seems convinced of the need for digital transformation, but not necessarily on the need for a separate CDO position:

The cynic in me can’t help but think that the Chief Digital Officer role is a notion created by the tech vendors to perpetuate the idea that the technology is, in and of itself, important. But with most work now performed on commodity technology that is fast becoming an unsustainable argument. Innovation and its consequent business advantage are the important goals, and they will come from making ever-better use of information. So who better to do that than the CIO?

Banks did report, however, that even the CDOs brave enough to attend the CIO-centered event acknowledged that the role was ultimately transitional.

Another view of the CDO: a transitional role?

The view of the CDO as a transitional job title was a theme during a video shoot I conducted earlier this fall at the Acumatica Partner Summit, with the Ray Wang of Constellation Research. Wang has blogged extensively on the topic of digital trends, bolstered by Constellation’s own research. I was eager to get Wang in the hot seat and ask him if the CDO role was BS. Which I did:

Wang’s view is that the Chief Digital Officer comes in many flavors, not just the CIO variety. But the companies that are making digital work are constantly trying to eradicate that pesky divide between business and IT.

Here’s a few highlights from our talk addressing that point:

Jon:  Aren’t [digital executives] fighting forces of resistance within their own companies too?
Ray:  Oh yeah. The early adopters – the business units are investing with them. The IT folks are actually sitting at the management table. These folks are saying, “Look, how do we actually become more like these consumer experiences?
Jon:  Are you saying that IT in the right context is becoming more entrepreneurial? They are learning how to not just run systems, but how to sell ideas, and how to be a part of a change process in business?
Ray: That’s about a third of the companies we talked to. Actually the other two thirds, those are business folks that are going on the techs bench. They are completely learning the tech and understanding how they get there.
Jon: I guess their IT departments must be feeling the heat from that then.
Ray: No, in some cases they’re partnering up. We try to talk to an IT person and a business person at both organizations. In the organizations that are ahead, they’re in sync. They know what’s coming; it’s not like they are running these big shadow projects – IT is on board. For the IT folks that are leading, it’s because business has a broader need and they are providing the services to get there.

Then I got to the question of the whether the CDO is a BS job title:

Jon:    Is a chief digital officer for real or is that bullshit? Why do we need this new-fangled job title?
Ray:    Because we don’t have enough CXO’s.
Jon:    Right. What’s this person going to do? Is this a real job?
Ray:    It is a real job for the next two to three years. We need a person that’s centralized, that’s looking at how to digitally enable a business. Those are people that are formulating the strategies.
Jon:    Who do they report to?
Ray:    They’re reporting to the executive levels, we’re seeing them report to the CEO’s, we see them report to COO’s, line of business GM’s. The main thing for these folks is, formulate the strategy, execute on this, understand the technologies, Create brand new business models and they’re basically trying to drive new business off of digital technologies.
Jon:    What would you say to critics who would say to you, “Ray, this digital transformation has just changed management all over again.” We’ve been talking about this for 20 years.
Ray:    I would say, what we are doing is we are melding those disciplines, change in management is important, business transformation is important. The technology piece is important and basically we are saying, “How do we create brand new business models?” All the other stuff will cascade against that.

My take

Wang’s comments back up what Banks reported on the transitory nature of the CDO role. Wang also noted variations on who the CDO reports to, and whether the momentum comes from the business or tech side.

Either way, I don’t care about the CDO title and whether it sticks to the wall. But the debate about the future of IT and business is profound, with IT on the spot to prove its relevance beyond commodity chores and cybersecurity. CIOs may technically be called CIOs ten years from now, but their job title may be one of the few similarities with their roles today. As I wrote in Enterprise hits and misses:

The debate about the need for a separate Chief Digital Office rages on, but I see that argument as largely irrelevant to CIOs. Whether or not a new CDO is appointed, that doesn’t excuse the CIO from engaging in a transformation exercise, with a new “beyond compliance” agenda that seizes – and creates – business opportunities. A CDO cannot save the CIO from himself or herself. For some may that may be bad news, but for others it’s a welcome chance for re-invention.

Or, as Alan Mumby of Odgers Berndtson  put it, as reported by Banks:  “It is no longer about the wires, it is about what the wires are used for.” One thing we do know: whether the Chief Digital Officer is here to stay, or just passing through, the CDO is a huge boon to the business card industry.

Image credit: Strong Powerful Business Superhero Cityscape Concepts © Rawpixel – Fotolia.com

Disclosure: The Ray Wang video was filmed by me at the Acumatica Partner Summit and produced by Den Howlett. Acumatica provided for most of my travel and accommodations to the show, but did not pay for the video and we had complete control of the editorial content of the shoot. Diginomica does not have a financial relationship with Constellation Research. I served as a volunteer judge of this year’s Constellation Research Supernova Awards, and Den Howlett serves on Constellation’s Board of Directors.