Your company already has a CIO. It may also have a CTO. Does it really need a CDO as well? It absolutely does, says Chris Curran, chief technologist at PwC. In an interview with The Enterprisers Project, he explains why.
The Enterprisers Project (TEP): You say that companies are not adopting the CDO role quickly enough. Why is this important for today's companies?
Curran: To say that digital investments are outpacing the hiring of CDOs is an understatement. Only 6 percent of companies have a CDO, according to PwC's first annual study of the role. Yet, in our 2015 Global Digital IQ survey of nearly 2,000 business and technology executives, almost a third say their companies are spending more than 15 percent of revenue on technology investments that span all areas of the business, not just IT.
Organizations need a single leader to drive digital investments in a unified fashion. Some are fortunate enough to have a CIO or maybe a CMO who has the required skills, experiences and organizational credibility and are already acting in this role, but many do not. What they have instead are different leaders with competing objectives and perspectives driving the company in different digital directions. The result is fragmented and sub-optimal investments. Without alignment between business units and functional teams, confusion ensues. Customers and users are frustrated and time and money are wasted.
TEP: What do you think is holding companies back from creating CDO positions?
Curran: Introducing a new C-suite role invariably generates questions regarding responsibilities, division of duties and reporting relationships. Probably the most complex and political questions relate to how the CDO role is different from what the CIO, CTO, CMO and other senior leaders are already doing. A financial services company I am working with now is taking several months to work through these questions and to consider the implications. Finding the right leader to fill the CDO role is also tricky since the skill set requires a blend of customer, marketing, analytics, technology skills and more. Among CDOs at top companies, more than half have a sales and marketing background; only 14 percent hail from the technology discipline. CDOs need to take a cross-functional approach to succeed in digital transformation.
TEP: How should leaders handle conflicting responsibilities and overlapping turf?
Curran: Mapping out the playing field is the first step. The leaping off question is: what capabilities and functions do the CIO/IT and CMO/Marketing currently perform? Which of the current functions are underserved and what new capabilities should a CDO/Digital team tackle? For example, maybe IT retains responsibility for the systems for internal customers but the CDO gains responsibility for the external customer/consumer technology from IT. Marketing drives all campaign planning and design but the CDO is responsible for campaign delivery and measurement in the digital channels.
Distributing similar functions across leaders and teams like this is complex and requires very strong working relationships, which are lacking at many companies. Our Digital IQ survey shows the CIO-CMO relationship is weak, and has been over the last three years. Adding a CDO could make matters worse. Or, it could provide the CIO and CMO with a golden opportunity to clear up confusion regarding their roles and responsibilities and to go forward in sync.
TEP: Should the CIO attempt to move into the CDO role? If not, how should the CIO best work with the new CDO?
Curran: CIOs in industries with very strong market-facing technology presence — retail or travel, for example — who have very strong experience in customer service, sales, and marketing, could be credible CDO candidates. Those in more industrial and B2B industries will likely already have a background suited to the CDO role. However, even in the B2B industries, the CDO emphasis is on creating new and better human-technology experiences. Therefore, a CIO who desires a more explicit CDO role must also have a deep appreciation for emerging technology evaluation, user experience design, mobile, and IoT-based strategies.
TEP: In many companies, the CIO is responsible for internal IT while the CTO is in charge of technology that is sold or served to customers. How does that CTO role compare with the CDO role?
Curran: It's hard to create a general comparison between CDO and CTO because neither has an industry standard definition. In general, the CTO may be responsible for design and development of the core customer-facing technology while the CDO is charged with marketing the technology and enhancing the customer's experience of the technology. Take a connected home-automation product as an example. The system itself is the brainchild of the CTO while the CDO dreams up a customer app that services the customer relationship and support remotely.
TEP: You noted that B2B companies are behind consumer companies in creating a CDO role. Why do you think this is?
Curran: Our CDO survey shows that B2C companies are more likely to have a CDO. With over 6 billion mobile phones and 2 billion smartphones globally, virtually everyone expects information at their fingertips. When these people are your direct customers, which is the case in B2C companies, the race is on to develop apps and services for their devices to get some of their digital attention. The traditional focus on consumer advertising and media has put more emphasis on the need to convert these channels to digital and mobile. B2B sectors also have customers with the same smartphones, but the reduced marketing focus (and budgets) in these businesses result in less focus on the CDO. That said, many progressive B2B companies are going through major digital transformations driven by their CIOs and some are considering a CDO role to fill expertise and leadership gaps.
TEP: What advice would you offer CIOs around creation of the CDO role?
Curran: It's much more important to focus on creating a single view of digital for the enterprise rather than on creating a new role. PwC's Digital IQ Study outlines the important questions to consider in charting a digital strategy.
CIOs should begin by asking some key questions: what do we mean by digital? What is the scope of digital transformation for our company? Does it include customers, products and employees? Does someone have responsibility for some or all of this work today, but it's not getting done? Who is responsible for which parts? What skills and capabilities do we need that we don't have? What are our goals? After these questions are answered, then the leaders can decide if they need a new colleague to drive it all.
