It’s the sexiest job in tech. It’s at the cutting edge of digital change, and gives a single individual the chance to modernize an entire company. For the most part, it also doesn’t exist. The chief digital officer (CDO) is often seen as the person driving digital transformation, but the role is often more fairy tale than fact, according to IT World Canada’s 2017 Canadian CIO Census.
The survey, conducted across 165 mainly CIO executives, found a marked lack of interest in the CDO concept.
Whereas around a third of organizations had chief security officers and chief compliance and risk officers, chief digital officers and chief innovation officers only existed in 10-15 per cent of organizations, the census found.
If digital transformation is such a hot concept in 2017, why are companies not assigning responsibility for the process to a key executive?
“If your company needs a typical CDO to convert to digital, then you’re already behind,” quips Dan Dickinson, chief digital officer at Equitable Bank. “A well-functioning digital company shouldn’t need a CDO. It should just be part of what you do every day.”
A CDO himself, Dickinson says he’s no ordinary CDO. He expanded into the newly-created CDO role at Equitable this March, but his responsibilities are different to others using that title. He doesn’t need to drive his company’s conversion to digital because it’s already there.
He joined Equitable Bank in 2013 as VP of digital banking after heading up online and mobile banking at BMO. Before becoming CDO, he launched Equitable’s customer-facing ‘challenger bank’ brand EQBank, which rolled out in January 2016.
Equitable was already far along on its digital transformation journey, says Dickinson, making his role far different to other CDOs. Whereas they are tasked with unwinding and transforming legacy, paper-based processes, Dickinson didn’t have that burden. “We were digital to start with.”
He is taking the company’s digital processes to the next level, introducing even more sophisticated systems that promote digital concepts still further. “I am trying to bring in new toolkits for development, bringing us to more of an agile or DevOps-type concept,” he says.
He doesn’t need to be a revolutionary, like most CDOs. “In a lot of cases, the CDO role was more created because the business couldn’t find the CIO to do what they needed, or organizationally it just wasn’t set up to do it,” he suggests. So the CDO has to be an agent of change, encouraging companies to embrace digital concepts in a battle that is just as political as it is technological, and finding allies along the way.
That makes the CDO, in general, an endangered species in many companies; a temporary role that will have to transform as the company does. His own role will also change, he predicts.
“I also see my title as probably being transitional. I don’t think it will persist for that long,” he says, arguing that CDOs often move into a more CIO-focused role.
Whereas the CDO is often a champion for digital transformation in businesses new to the concept, CTO is a more popular role for a digital leader in companies that have mastered it, says Meredith Whalen, senior vice president in IT executive, industry, software, and services research at IDC.
Some companies skip the CDO role altogether, she adds, which is partly why there are so few of them.
IDC’s research among U.S. companies is consistent with the Canadian CIO census. Fewer than 10 per cent of companies have a dedicated CDO, she says. That doesn’t mean that digital transformation isn’t happening. It just means that someone else other than a CDO is doing it.
“If you try to look for a pattern as to what title is leading digital transformation, it’s all over the map,” she says. In her research, 22 per cent of the time the company hands the process of digital transformation to the CIO.
Even when CIOs aren’t given responsibility for digital transformation directly, they still have a significant role to play, she says.
“They bring a lot of value in helping the company to understand how it can transform through technology,” Whaley says. “They can help lead the effort in integrating all the innovation that is being created at the edge of the enterprise.”
CIOs also have an important part to play in looking at existing infrastructure and understanding how to rebuild that to run an existing business at scale, she adds.
What happens when whoever is responsible persuades the business that digital transformation is necessary and pushes that change through? Whether or not responsibility for digital transformation falls to a CDO, CIO or alternative, companies will progress through a digital transformation maturity model that will see it become a more systematic part of the business, says Whaley.
“We have to get from treating digital as a special event in the company to digital being business as usual,” she says.
According to IDC’s model, companies typically start their digital transformation process with an exploratory special digital projects team that investigates the concept’s potential and reports to the CEO. A quarter of U.S. organizations are currently at this stage.
This gives way to a formal program office that moves the concept forward, identifying specific opportunities for digital transformation and helping business operations to embrace them. This group owns a specific digital channel within the company and focuses on using it to improve customer outcomes. It will have its own budget and staff.
Almost half of all U.S. firms are stuck here, Whaley says. They need to get to the next stage, in which they embed digital resources directly into their lines of business. At this point, the central digital transformation office becomes more of a co-ordinator and central resource than a driver for digital transformation.
The CDO may be a mythical faerie beast, fleeting and temporary, and rarely seen. The mission of the role isn’t, though. Businesses are still grappling with reinventing manual business processes in digital form and refocusing on customer engagement. It’s just that the CIO, CTO or even a tech-savvy line of business leader is stepping up to make it happen.