Digital transition: What happened to the Chief Digital Officer?

Industry 4.0, digital transformation and growing pressure to get a lead over the competition when it comes to technology – companies face considerable challenges today. Does their management require a special executive board position, a “Chief Digital Officer”? In practise, the CDO has hardly gained acceptance. 

It was the business consultants at Gartner that set the ball rolling. Back in 2012, they predicted that around 25% of companies would have a CDO within three years. Reality turned out to be quite different: in the 2015 CIO Agenda Report, Gartner concludes that the figure is actually closer to 9%, and has remained at that level for some time. CIOs have taken over such tasks in almost 40% of companies and Gartner is thus now back-pedalling: “Does it matter?

What does a CDO actually do – and why?

There is still no generally accepted job description for the CDO. There is nevertheless a basic consensus that the officer is responsible for a company’s digital transformation. This includes both strategies for internal change and the identification of new business areas. He (or she) sets the framework for the company’s future viability and must be able to confidently deal with the growing complexity and speed in the world of work.

The creation of a CDO position thus looks reasonable at first glance. Digital literacy has become essential and not every company already has the necessary expertise at the management level. The Chief Digital Officer would have the big picture in mind, without having to worry too much about the (also necessary) everyday business activities. The CDO thus has a cross-departmental function that encourages the various business units to cooperate. Driving on digital transformation without including a CDO “on top” or alongside hardly does justice to the magnitude of the task.

The tasks are waiting, but the position remains open

On the one hand. On the other hand, critical voices increasingly see another “Chief” position as making no sense. Consultant Jan Peterskovsky at DMK Innovation sees a digital advisory board as a good alternative. Among other things, it is especially difficult for small and medium-sized enterprises to find suitable candidates for the position of CDO. The advantage of a digital advisory board supporting the executive board and management with expertise is that a number of renowned experts would be available for consultation. “The external position and the non-binding nature” of such a board are additional business-relevant advantages.

The appointment of a CDO can also be a little disconcerting for more traditional companies. Staff are reluctant to back the CDO, at least in the beginning, but such support is required in order to tackle the necessary changes. Forrester Research dispels at least one concern: that other board members will see the CDO as internal competition. CDOs and CIOs “work together extremely well” in practice.

It is important to recognise the opportunities

Names are sound and smoke, says a German proverb. While a CDO may be the right solution for some companies, it is out of the question for others – if only for the reason that CDOs are not a dime a dozen. Titles are of secondary importance, as analyst Nigel Fenwick says: What matters is the ability to understand how digital technology will change the business world in the future, and what that means for the relevant company and its customers. (ds)