R "Ray" Wang: The Chief Digital Officer Navigates Digital Disruption

InsightaaS: R. "Ray" Wang is one of the IT industry's most widely-respected analysts. Currently the CEO of Constellation Research, Wang is recognized as a leader in identifying digital business practice options and adoption pathways.

In this extensive post, he looks at how the role of the Chief Digital Officer (CDO) is evolving. He first defines the characteristics he believes are important to an effective CDO: a role reporting to the CEO, with responsibility for formulating digital business strategy, activating operational initiatives and managing the organizations transformation to digital practices. He then addresses four pathways to the CDO role - in what industries is it likely that a CMO, CTO, COO or CIO will be tabbed as CDO? The post closes by highlighting three CDO trends: Constellation/Wang see the CDO role continuing to proliferate (with a frecast that 50% of the Fortune 500 will have appointed a CDO by 2016), that digitally-enabled CXOs (CFOs, CEOs, CIOs, CMOs, COOs) will become the norm, and that - at least partially because of the second trend - the "Digital moniker will disappear before 2020,: with digital savvy a requirement across all executive functions.

Chief Digital Officers serve as a leader who is wholly responsible and ultimately accountable for driving digital business transformation.  As identified by Constellation in its’ recent report on the "Case For the Chief Digital Officer", Constellation expects this executive to report directly to the CEO and bridge the gap between marketing and IT at a corporate level, rather than report into either existing function. Why? The CDO needs to maintain focus above the legacy responsibilities of marketing communications and enterprise technology architecture. Current C-suite residents may argue that a CDO would be assisted by the guidance and patronage of a more established department; however, the organization needs an unencumbered leader to drive a digital-first mindset into business units and all the way to the front lines of retail and customer service. A properly chartered CDO should have responsibility for:

  • Formulating digital business strategy. The Chief Digital Officer needs to determine how to incorporate digital approaches into the company’s business model, which may vary based on industry. But all CDOs must have subject matter expertise and also need to draw upon a background in general management and competitive strategy. In order to lead transformation, a CDO must determine how to evolve long-standing analog business elements into digital assets and capabilities, ultimately creating customer value.
  • Activating operational initiatives. Effective CDOs are not mere evangelists or thought leaders; they earn their keep by translating strategy into actionable programs. A CDO will introduce new ideas into existing work methods, which requires a holistic point of view, attention to detail, and an integration mindset. A company’s current value chain will require reexamination for new value creating opportunities. The CDO’s role is to leverage operations and development expertise to identify areas of potential change and turn them into value capturing solutions.
  • Managing the organization’s transformation...

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