Tue, October 26, 2021


The roles and characteristics of Chief Digital Officer (CDO) and how CDO can help orchestrate the digital transformation journey

As information technology has dramatically reshaped all industries, many companies are pursuing and driving the digital transformation initiatives, in an effort to capture the benefits of these trends or simply catch up their peers.

To make digital industrial transformation a reality, a company needs both a nerve center and a dedicated digital function. Creating an operational structure with digital leader is key to drive the transformation successfully. It is therefore highly important that the organization would need to appoint so-called a chief digital officer (CDO), a senior leader responsible for the organization's long-term digital vision and the subsequent execution of the transformation efforts.

The Rise of the Chief Digital Officer

CDO think holistically about how a company’s strategy is executed across all digital channels. They own and drive digital strategy throughout the organization to help business unit leaders unlock value.

While many required core leadership skills remain the same whether it is a business or digital leader, there are some particular demands of digital disruption call for certain new skills as well. Based on Deloitte survey and analysis, the new skills required for CDO are;

  1. Transformative vision and forward-looking perspective - this is the most important skill to possess, which includes the ability to anticipate markets and trends, make savvy business decisions and solve tough problems in turbulent times.
  2. Digital literacy - it goes without saying, that understanding technology is a must-have skill for CDO, the leader needs to have general digital literacy, as opposed to hard-core technical skills like programming or data science. This is critical skill because it supports the first skill cited: having transformative vision and being forward-looking. It is often much easier and more effective to equip the business leaders become digitally literate than it is to teach technologists the strategic and business knowledge.
  3. Adaptability - as the pace of change in digital world, a leader must also be change oriented - that is open-minded, adaptable, and innovative. Constantly and continually, leaders need to update their knowledge stores which can be obtained through formal education, in-house training, or cross-generational reverse-mentoring programs.

The digital function

The key elements that will help CDOs achieving their vision and goals are what we called 'Digital Function'. Digital function is the enabling force that drives the digital transformation strategy, road map and oversees delivery of transformation initiatives across the company.

The most successful transformation efforts tend to integrate these 5 elements or 5Ds.

  1. Digital strategy - acts as a digital North star to help better communicate and guide all digital initiatives across the enterprise. Setting the strategy and road map is the first step in the path that CDOs need to chart. Strategy defines the broad business goals to be achieved, the road map outlines how the company's existing technical architecture, processes and planned initiatives need to be revamped. Organization should seek inputs from various stakeholders (customers, partners, shareholders, communities), prioritize and schedule the plan and finally get validated again by those key stakeholders, both inside and outside the firm.
  2. Digital investment - most or all projects will be needed funding, the CDO should oversee the investment governance model to help creating influence across the organization. 3-steps must be performed well; Filter (only projects align with the digital strategy), Score (evaluate project based on multi-dimensional scores) and Prioritize by its impacts and ease of execution.
  3. Digital operations - perhaps, this is one of the most difficult elements to be decided which may require thoroughly review and might be adjusted and iterative. Digital operation is served as a backbone of all digital activities. It must be clearly lay out governance, accountability and metrics to consistently monitor digital initiatives' efficiency and execution. 
  4. Digitalization of customer journey - digital transformation mostly seek to improve customer outcomes by creating a more customer-centric organizational culture. It may begin with the development of a sense-and-respond capability to gather customer information and leverage feedback to take action to deliver business capability improvements which requires collaboration across the digital function and the broader organization.
  5. Digital DNA - in partnership with MIT, Deloitte developed concept of Digital DNA which is centered around embedded a digital-first mindset and ways of working into an organization. It can serve as a blueprint for bringing a digital transformation to life, to help companies to organize, operate and behave in digital ways. Cultural changes are some of the hardest to drive within organizations, and embedding Digital DNA requires substantive effort but it can deliver outsized, long-lasting returns. You can find more information about Digital DNA from our Deloitte insight.

Not sure where to start? Most of the time, the best place would be your highest value asset - customers. Customer centricity is always a top-of-mind in most executives. Conducting an outside-in analysis, interview or survey customers to understand their pain points (coupled with design thinking concept), gaining feedback from all touchpoints are a solid foundation to develop your own digital strategy and road map.

By Dr. Narain Chutijirawong, Executive Director of Deloitte Thailand

Published : October 05, 2021