Anna Frazzetto's Blog

Digital Innovations and Technology Solutions

The Rise of the Chief Digital Officer

Working in the technology industry for longer than I'd like to admit, I've seen the evolution of the IT function and the people supporting it. To me, one of the more exciting happenings right now is the rising number of chief digital officers (CDOs). This position has doubled every year for nearly a decade, signaling the growing importance and potential transformative power of the chief digital officer. Yet when I talk to companies here in the U.S. and in AsiaPac, there is much ambiguity surrounding the goals, purpose, scope and applicability of the CDO role.

The CDO: More than a "Nice-to-Have" Role
With an anticipated 20% rise in e-commerce sales this year to more than $1.5 trillion, the digital revolution is transforming the customer experience for almost every business and government entity. It is driving innovation across the board and reshaping traditional roles and responsibilities from IT and marketing to finance and operations. That is why I believe we are seeing the clear emergence of a digital leader.

We recently revealed results from our 2014 CIO Survey. Respondents from both the private and public sector report that they now have both CIOs and CDOs, with 7% reporting that their organizations have recently established the role of the CDO. For those with IT budgets north of $100M, CDO penetration increases to 16%. (Gartner predicts that percentage will rise to 25% by 2017 for all large companies.)

Companies that have created a CDO seem to see it as a strategic position. CDOs are much more likely to report to the CEO than to the CIO. This appears to be borne out by recent invitations for digital experts to join boards of directors as well. 

Anna's June Blog_Digital.JPGSource: Harvey Nash 2014 CIO Survey

The Struggle Over Who "Owns" Digital
With an increasing focus on digital sales and marketing programs, it comes as no surprise that something of an arm-wrestling contest is underway between IT and marketing for control of digital strategy and initiatives. Four in 10 leaders tell us that marketing "owns" digital - a substantial rise on last year's CIO Survey results - while only 10% of CIOs claim to control this area. However, some organizations seem to have taken what we see as a more mature approach. Around 40% of respondents tell us that the function is shared between marketing and IT, suggesting that each group is playing to its strengths. A collaborative approach may well be the best way to make gains in this area. It ensures more energy is focused on connecting with customers and edging out external competitors than wasted on internal turf wars.

Continuing the Digital Discussion
I will continue the discussion on the growing influence of the CDO in future posts. Also, in August, I will be moderating a panel discussion via a Google Hangout. This discussion is designed to clear some of the mist - and the myths - surrounding the CDO. Our panel will feature a CIO, CDO, CMO and CTO from a mix of industries (media, banking, government and insurance) and discuss some of the key issues that come with adding the "D" role to the c-suite, such as:

• What knowledge and experience distinguishes a CDO from IT and marketing peers?
• Do CIO, CMO and CDO responsibilities overlap?
• Is the CDO more marketing or technology executive? Or both?
• What are the marks of achievement for successful CDOs?

Watch for details on the Harvey Nash Google Hangout coming soon and please continue to share your thoughts about the growing influence of digital and its potential impacts with me.