An urgent, strategic shift CIO rival or peer? The digital transformation is moving extremely rapidly. In a survey, 1 carried out by MITSloan, of executives from different business The emergence of the chief functions across a wide range of industries, nearly eight out of ten respondents said that achieving digital transformation will be digital officer critical to their businesses within the next two years.The report argues that a range of digital technologies will enable major business improvements: better customer experiences, streamlined From McDonald’s to NBC News, a new job title is taking grip in 2 operations and new business models. Gartner agrees: its 2013 CIO a rapidly expanding list of companies: the chief digital officer Agenda Report notes that, while CIOs have spent the past decade 4 (CDO). Gartner believes that at least 500 such roles already dealing with tightening budgets, limited innovation and cost exist, many of which involve acting as strategic advisors to the cutting, they have seen digital reach a tipping point across the board and CEO on their digital business strategy.Given the fact business in the past 18 months. However, according to Gartner’s that many of the most promising digital technologies are directly 2014 CIO Agenda, CIOs feel overwhelmed by the prospect of supporting customer interaction and growth, these CDOs often building digital leadership. hold close ties to marketing, sales, strategy, finance and, of “Dealing with the challenge of digital change requires an end-to- course, IT. end response, building a comprehensive digital strategy, and So is the CDO emerging as is often the case with a threat that rethinking the business and operating models,” says David Nichols, could replace CIOs, or as a new potential peer, as the CTO or Americas IT Transformation Leader at EY. chief data officer? In many respects, this depends on CIOs 3 themselves, argues Bob Sydow, Americas IT Advisory Leader There are three core changes here: at EY, who sees a potential dividing line between overseeing 1. Using digital to enhance traditional business models, such as “systems of records” (in the back office) and “systems of moving from selling products to providing services — Streetcar engagement” (revenue-generating and firmly in the front office). and Xerox are two examples “Exceptional CIOs can play both of these roles, and it’s better for 2. Transforming existing business models to offer new digital the organization to have one person doing both.” services — such as 100Flowers selling via Facebook The challenge, in his view, is that traditional IT functions are 3. Inventing wholly new types of business models — from virtual often not well set up for innovation and new ideas. They don’t currencies in online games, to others selling its digital data have the ability to sit with the sales and marketing organization “In many cases, digital has moved technology toward becoming the and have an intelligent conversation about driving revenue. “To front end of the spear rather than the tail feathers,” argues Bob counter this, CIOs need to know what drives the business, how Concannon, a partner at executive recruitment firm KornFerry. business processes work, and how these all fit together,” adds “Companies are recognizing that a judicious use of IT can lead them Tom Velema, EY’s EMEIA IT Advisory Leader. ”Otherwise you toward increases in sales and returns on investment never before can see why a CDO could step in instead.” possible.” For those CIOs willing to change and step up to the challenge, there is no reason why an existing CIO can’t play a CDO’s role, according to EY Americas IT Transformation Leader David Nichols. “CIOs can provide a high degree of innovation, especially as they already service many business units, from marketing and HR to the supply chain. But to get this right, companies need to rethink how they organize themselves to ensure the greatest impact from digital,” says Nichols. Born to be digital | 7