The CIO-CDO Partnership: Collaborating to Drive Critical #Growth

[Former Member]

In a world of Amazon, Apple, Uber etc. people demand easy, on-demand interactions – both online and offline. Many credit it to the rise of the social, mobile, and networked world. Regardless of the underlying drivers, this changing consumer expectation is fundamentally changing today’s business landscape. Savvy companies are taking advantage of this shift toward “anytime, anywhere" economy by making omnicommerce a core part of their strategy. And with this, we have seen the rise of new C-level executive: the chief digital officer, or CDO. CDOs represent a new breed of leadership that blends technology experience and entrepreneurial acumen to drive growth and innovation.

As Bryan Kirschner, director of the Apigee Institute, told CIO.com: “As mobile technology and data analytics completely reshape the business landscape, building a truly digital DNA is imperative for survival in today’s competitive app economy. Many companies are seeking CDOs to lead this enterprise-wide transformation.” In fact, Gartner estimates that 25% of organizations will have a CDO in place by 2017 – and this number rises to 50% for heavily regulated industries.

What does this mean for existing technology leaders? Who owns the strategy and technology required to drive an effective, end-to-end omnicommerce approach? And should CIOs worry about dividing up boundaries between the CIO and CDO before there’s even a successful digital business in place? These are important questions – one that I personally spend a lot of time thinking about as the COO of SAP Digital, SAP's new business unit focused on individuals as part of our direct to consumer push. And how they are answered will influence how well these executives will collaborate and how much they will actually accomplish. We are in our early days (2nd innings of a 9 innings baseball game for the sports fan out there,) but during this short time there are a couple of things we have learned.

Going Beyond Collaboration

We’ve all read about how CIOs and CDOs must collaborate to achieve better results. Collaboration is critical because at a minimum, CIOs are responsible for executing on the technology architecture and overall IT requirements of a digital business. But to drive critical growth for the business, these two C-level executives need to go one step further and view themselves as partners.

Partnership takes collaboration one step further by recognizing the unique strengths that each participant brings to table and building a common vision that cement their status as essential contributors to customer satisfaction and revenue growth.  In today’s constantly evolving digital economy, a symbiotic partnership between CIO and CDO is essential because when it comes to digital, the sand under IT’s feet is constantly shifting, making it impossible to know everything in advance.

CDOs champion many initiatives that most businesses have yet to focus on, such as driving incremental revenue from ecommerce and developing new digital offerings designed for today's consumer. While they must be technically adept, most CDOs are business leaders first; The CDO’s focus should really be about creating value and innovating business models in the same way a start-up would. Business acumen and entrepreneurial spirit are key.

CIOs need to stay current on ever-expanding and evolving technologies to enable the business; examples include remarketing tools like SeeWhy, which targets abandoned shopping cart users. They must go beyond getting the basics of software development lifecycle and build agile technology organizations that can quickly scale up or down as needed to meet business needs. And finally, they need to foster a culture of continuous improvement and become comfortable executing in a constantly changing and evolving technology and business environment. 

A Customer-First Mindset

There's no reason that a CDO's success should come at a CIO's expense. Keeping in mind that “a rising tide lifts all boats,” they both need to just stay focused on finding new ways to serve customers – for example, by catching up to (and anticipating) customer expectations and making an omnichannel, end-to-end customer experience a reality. Engaging with people on a one-to-one level has long been a dream of business, and CDOs are at the front lines of delivering this experience.

But for omnichannel strategies to come to fruition, CIOs are also critical. As suggested in IDC FutureScape: Worldwide CIO Agenda 2015 Predictions, by 2017 CIOs will own and spend 80% of their time on critical areas, such as “analytics, cyber security, and creating new revenue streams through digital services." And with the shift, they will need to evolve the key performance indicators (KPIs) for their teams, from delivery schedules to business metrics focused on outcomes. In fact, these KPIs are a natural alignment point with CDOs, particularly if the business metrics focus on revenue growth and customer satisfaction.

Regulated industries, such as insurance and finance, offer examples of shifting KPIs for digital business, as well as successful partnership. A KPI for a consumer bank may have previously been scope and budget of delivery or cost-per-transaction, but under pressure to grow, banks have developed new digital offerings, such as Online Accounts, to drive new revenue. CDOs and CIOs are collaborating using common KPIs, such as Assets Under Management (AUM), to make this happen.

Your Next Move

Forward-thinking businesses do more than simply catch up. They are constantly asking “What will customers want tomorrow?” As Wayne Gretzky said, “Go where the puck is going, not where it's been." To move forward, CDOs, CIOs and other key executives must be in alignment and acting as partners.

Guided by a growth-oriented, customer-first mindset, CIOs should welcome the arrival of CDOs. Working in tandem, both will play pivotal roles in leading their organization through the digital revolution.

Let’s Connect

I would love to exchange collaboration ideas and best practices from other practitioners out there either here or on twitter madhuraggarwal