There is no doubt that the digital revolution is here to stay. From disruptive industry game-changers like Uber to innovative, incremental operational changes and new thinking about core business models, digital transformation has led the entire IT organization to shift and evolve. At the same time, the C-suite and board of directors increasingly sees digital as a top priority across all lines of business. In fact, more organizations have enterprise-wide digital strategies, up to 35 percent this year from 27 percent last year, according to the Harvey Nash/KPMG 2016 CIO Survey, The Creative CIO.
But who is the “boss” of this digital transformation? The CIO seems a natural fit since the digital revolution has fundamentally changed the CIO role. Today’s CIO has morphed into a transformational business leader, technology strategist and business model innovator.
On the other hand, what about the Chief Digital Officer — the CDO — if there is one? Or the marketing organization — isn’t digital their turf? And what’s at stake for CIOs who sit on the sidelines?
Marc Snyder, managing director and head of KPMG’s CIO Advisory Global Centre of Excellence, maintains there isn’t any individual who serves as a “boss” when it comes to digital transformation. However, The Creative CIO makes it clear the CIO can and should take the lead in what needs to be a collaborative effort across the entire organization.
“Digital transformation is really about business transformation — that is the real value,” he says. “Therefore, it’s about a joint set of initiatives requiring collaboration for which the CIO should be prepared to have a leadership role.”
Who Owns Digital Strategy?
For The Creative CIO, Harvey Nash/KPMG asked respondents, “who owns digital strategy?” The number one answer, or 36 percent of this year’s respondents, said the board or C-suite executives own digital strategy. Increasingly, though, organizations are expecting their CIO to lead the delivery of that digital strategy, which Snyder describes as a sign that organizations are moving toward more “strategic versus tactical responses.”
This is a shift from previous Harvey Nash/KPMG CIO surveys, which found marketing to be the likely leader of digital strategy — perhaps a natural home for strategies related to changing the way companies relate to their customers. This year, however, marketing found itself at the bottom at 9 percent — behind the board and C-Suite, as well as IT (16 percent) and a combination of IT and marketing (14 percent).
“This result is due to a recognition that CIOs need to be involved in the digital transformation so they can make sure that capabilities being built are sustainable and integrated across the business,” says Snyder.
As for the Chief Digital Officer, the growth in organization having someone in this role is leveling off rather than growing strongly — making it less likely for a CDO to take the digital strategy lead. Last year there was evidence of a big jump in the number of CDOs — 17 percent in 2015 over 7 percent in 2014, which Harvey Nash found to be the largest year-over-year increase in any role they tracked. But in 2016, only 19 percent of organizations have CDOs — a signal, says Snyder, that the CIO has grown into that role to a point that many companies feel it is unnecessary.
The CIO Can’t Go It Alone — but Must Prepare to Lead
More and more, the CIO is taking a leadership role in digital strategy. When it comes to digital transformation, however, the CIO can’t go it alone. Digital transformation requires collaboration, and a joint set of initiatives that combine business and technology.
“We’re not just talking about IT for IT’s sake, but about innovation with the business around business capabilities,” says Snyder. Digital disruption, he explains, is no longer just about developing new business models — which was the biggest expectation last year. In 2016, expectations have shifted to focus on digital transformation in the form of new and innovative products and services, as well as new forms of customer engagement.
“That’s why digital transformation must be done collaboratively,” says Snyder. “You can’t do this without the rest of the business…it is the business.”
Still, the creative-minded CIO can use IT teams and services to their best advantage to deliver technology-enabled capabilities to the business, using them as a “test-bed” to drive innovation and the execution of digital strategy. There is still room for improvement here, according to the Harvey Nash/KPMG survey: Only 31 percent of respondents have a formal process to allocate resources to drive technology-enabled innovation across IT and the business.
In addition, Snyder points out, CIOs need to reduce the complexity and redundancy within an organization’s technology. “They need to aggressively simplify the IT estate,” he says, so the organization can be more agile — this is not just about adopting agile development methods but rather developing a competency and culture across the business of being agile.
“There is a speed gap — a gap between the pace at which the IT organization CAN deliver and the pace they NEED to deliver technology-enabled capabilities to the business,” says Snyder. “The important thing, I think, is how CIOs will close those speed gaps by becoming more agile at scale — that is with the entire business.”
If the CIO is not prepared to lead, says Snyder, they need to “get out of the way and let business move on.” To prepare to lead in the realm of digital transformation and strategy, they need to develop a clear vision, a nimble culture and a trained, qualified workforce with the skills to handle these changes.
The Creative CIO survey found that the visionaries with that kind of clear enterprise-wide strategy are the ones outperforming their peers — and now more and more CIOs are following that path, toward a mature, company-wide, collaborative approach to the wild, woolly world of digital.
The CIO may not be the “boss” of digital transformation, but they share an ownership role with partners across the organization. Make no mistake: companies are looking to the CIO to take a leadership role when it comes to digital, in order to shepherd the rest of the business toward transformative digital success.