Digital transformation offers a range of benefits for your organisation’s C-Suite and their business areas. However these stakeholders will also have legitimate concerns about its implementation.
It’s the role of the Chief Digital Officer (CDO) to empower and support the following senior managers to address the people, process and technology challenges to maximise the chances of success.
Chief Finance Officer: For a CFO, digital transformation offers a potential “rapid” return on investment because it delivers benefits incrementally versus a big bang approach. This Agile approach also helps spreads organisational risk because it drives ownership of digital across all business areas.
However, accounting for rapid service change can be problematic because it’s hard to distinguish CapEx and OpEx budgets from each other (is website optimisation a transformative or business as usual activity, for example?). Consequently it can be harder to trace financial/bottom line benefits to such change – an issue further exacerbated by limited benchmarks and other evidence being currently available about successful digital transformation. Is it all true good to be true?
To address this, the CDO should take ownership of the strategic benefits case for digital transformation in collaboration with the Chief Finance Officer and be responsible (and accountable) for ensuring its effective realisation with the whole of C-Suite.
Chief Marketing Officer: A CMO will want to use capabilities enabled by digital transformation to deliver (big) data powered personalisation of products and services to customers. This blending of customer and user experience design together creates responsive aligned sales channels that should increase competitiveness in disruptive uncertain markets.
Such transformation may require a costly re-branding exercise and the organisation itself may not be able to move quick enough to deliver these benefits before competitors start imitating such innovation and steal market share. Furthermore, social media customer engagement poses reputational risks that if mishandled could damage the organisation’s brand permanently.
The CDO should be constantly selling (evangelising?) the benefits of digital for customers and employees to drive buy-in of digital transformation from C-Suite. Key to this is the CDO using social media to personally spread this message (and commitment) constantly, consistently to market and internal stakeholders. In addition the CDO should proactively lead service and product innovation to help the CMO maximise the full benefits of digital.
Chief Operating Officer: The COO will like the way digital transformation empowers employees at all levels to deliver greater organisational efficiency and effectiveness. This includes the required breaking down of business and IT silos to realise new ways of working using digital technology. These strategic benefits include the design and implementation of a future proof operating model that can meet further market disruption and technologies.
But the COO may find such change highly challenging because it probably means a fundamental redesign of parts of the whole organisation – a major pain point could be the existing IT legacy systems that have to be adapted or worse yet replaced to enable such capabilities. Further problems could also arise from having to deliver high, unrealistic expectations for big data and analytics. Other people and process issues may also present blockers to success (for example incumbent teams having to transition from Waterfall to Agile).
In response the CDO needs to take a thought leadership and implementation role in the design and realisation of a new digital operating model with the COO. Part of this role is providing “hands on” management consultancy capabilities required to successfully implement a model that addresses these technology, people and process challenges. This will make the CDO a critical friend and partner with the COO in delivering successful digital transformation.
Chief HR Officer: Like the rest of C-Suite the CHRO will want to realise the people benefits of greater employee empowerment, integrated working and building of internal capabilities. Not only should digital transformation increase market competitiveness, it should have a positive impact on employee development opportunities, morale and performance.
Yet given the immaturity of digital transformation such business change could be problematic – existing employees may lack the skills and confidence for it to be successful. Training such resources may also be costly and set unrealistic expectations for their performance. Recruiting for new specialist roles (like Data Scientist or Agile Coach for example) could be challenging as there is limited supply right now in the labour market for these resources and high demand is pushing up/inflating salary expectations.
Both the CDO and CHRO need to have a deep understanding of these business change and HR issues. Key to addressing them is having the CDO apply market insight to help find the right best practice approach to up-skilling and training while also leveraging networking contacts to help find the right resources. The CDO must play a material positive supporting role to the CHRO to get people in the right place to deliver Digital Transformation.
Chief Digital Officer – potential benefits for C-Suite:
- Digital strategy and benefits management/ownership
- Evangelist driving buy-in and innovation
- CX/UX target operating model design and implementation
- HR and business change in-house consultancy
How can a CDO maximise the benefits of Digital Transformation for your organisation?
If you would like to find out more about the role of the Chief Digital Officer in C-Suite please leave a reply below, or contact the Sopra Steria Digital Practice.