Digital transformation: CDO or CIO - and does it matter anymore?

The 2016 Harvey Nash/KPMG CIO Survey reveals that the pace towards digital transformation is accelerating within organisations. But who owns it – and does it matter, asks Lisa Heneghan, KPMG’s global CIO advisory service network leader


As the digital imperative only gets greater for businesses of all sizes and sectors, the question often arises of who owns digital? Do organisations need a chief digital officer – a CDO? Or should responsibility sit with the chief information officer – the CIO?

A year ago, the CDO appeared to be well and truly on the rise in order to fill a perceived gap between IT and the board. They seemed to be on everybody’s lips and growing numbers of organisations were appointing one.

But a new report from Harvey Nash and KPMG – the result of responses from nearly 3,400 CIOs and IT leaders around the world, the largest survey of its kind – finds that the argument over who owns digital is subsiding.

CDOs are still quite prevalent, but the rate of increase has slowed down. Now, the proportion of organisations with a CDO stands at one in five. The UK is slightly above the trend here, with 22 per cent of organisations having a CDO compared with 19 per cent globally.

Our research also shows that the existence of the CDO role is closely linked to IT budget size. Companies with IT budgets above $100 million are twice as likely to have a CDO as those with IT budgets below $100 million.

But nevertheless, the rise of the CDO across all organisations appears to have moderated after the breakout year of 2015.

CREATIVE CIO

Why is this? In many cases it’s because the CIO has stepped up to take a more strategic, business-enabling role, often reporting directly into the chief executive – what our report terms the birth of the “creative CIO”.

The creative CIO is moving away from merely “keeping the lights on” and instead focusing on enabling the business to create value by harnessing social and technical disruption. They are becoming transformational business leaders, technology strategists and business-model innovators.

They are increasing the depths of their relationships across the organisation beyond their traditional “comfort zones” of finance and operations in order to ensure digital strategy is joined up. They also often use their own IT teams and services to act as a test-bed to drive innovation, freeing up funding for this innovation by delivering savings in other areas, for example simplifying the IT estate through exploiting cloud and other technologies.

Technology simplification is critical for successful cloud adoption. Nearly half of respondents quoted integration with existing architecture as one of the biggest challenges to cloud adoption, something that must be addressed to prevent significant issues arising in the future.

DIGITAL STRATEGY

Many more organisations are taking a mature, company-wide approach to dealing with the digital challenge. The number of IT leaders reporting an enterprise-wide digital business vision and strategy increased to 35 per cent, a 28 per cent jump from last year. An additional one in four (24 per cent) have digital strategies for individual business units. As digital increasingly becomes critical to businesses, only 13 per cent of respondents have no digital strategy and no plans for one.

Moreover, 59 per cent of organisations are looking to implement agile methods to develop and deliver IT services. “Next generation” operating models such as agile and devOps offer the prospect of continuous delivery capability. The goal must be to simplify organisational structures to deliver successfully both a more agile and innovative business environment, and a more engaging customer experience.

BUSINESS AS USUAL

In short, with digital becoming more of a matter of business as usual, the debate becomes less about ownership and more about simply getting on and doing it – enabling it to happen. The challenge is moving from one of ownership to one of delivery.

As digital strategies grow in prevalence and maturity through organisations, we may well reach an inflection point where the growth in the CDO role levels out and then begins to decline.

Perhaps of more pressing significance to the CIO, and leadership as a whole, is the question of where they will get the digital skills they need. Some 65 per cent of respondents in the survey said a skills shortage was preventing their organisation from keeping up with the pace of change.

The challenge is moving from one of ownership to one of delivery

Equally pressing, organisations need to ask themselves where they want to be in the digital revolution – innovators or fast followers. There is a conscious decision to be made and it needs to be made very soon if it hasn’t been made already.

As with everything digital, there is little time to dally.

For more information about the 2016 Harvey Nash/KPMG Global CIO Survey and to request a full copy of the results, please visit www.hnkpmgciosurvey.com