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Every company needs a C-level executive focused on Digital Transformation (and it should not be the CIO)

FEB 24, 2020 | Matt Hatton
 
region: ALL sector: ALL technology: ALL

Within most organisations, all aspects of technology are handled by the IT department, and hence sit under the Chief Information Officer (CIO). The problem with that approach is that it’s very difficult to manage the two competing aspects of IT. I’ve described them as “wheels on” and “wheels up” before. The former is the practical role of keeping the wheels on the bus as it’s moving, i.e. the quite mundane functional activities such as providing everyone with a PC and a phone, handling network security, managing software for various departments such as sales or accounts, and so forth. The latter is about applying new technology to your core business to make yourself more competitive or more efficient. The same department can’t and shouldn’t do both. Inevitably prioritisation shifts to maintaining the status quo and budgets for new game-changing initiatives get eaten up by existing operational costs.

It’s a bit of a cliché these days that all companies are technology companies, but that doesn’t make it any less true; IT is strategic like it has never been before. For this reason, I firmly advocate every company having a C-level executive focused on the disruptive new technologies, separate from the CIO. And that role has to have real bite. It has been quite fashionable in recent years to appoint a Chief Digital Officer (CDO), but in many cases this has been a wishy-washy role that is little more than corporate virtue signalling. Even more critical than that, responsibility for transformational activities, whether it be Robotic Process Automation, IoT or Artificial Intelligence often sits within Innovation or Strategy business units that lack credibility within an organisation and are seen as ivory towers.

What is needed is the equivalent of the Chief Technology Officer (CTO). Within technology companies, having a CTO is a given. You need someone in charge of developing the tech that goes into your products (or in many cases IS your product). But it’s not so common within most other sectors, particular below the scale of large corporates. These organisations are missing out on having a strategic technology vision and a department responsible for delivering on it. A CTO’s office, in contrast, gives the necessary heft to the role of using new technologies to apply to business processes.

This isn’t to say that CDO is necessarily the wrong title, and there are many examples where the role is very important in the organisation structure. But the CxO role, be it CTO or CDO, needs to have real capabilities, overseeing the strategic technology direction without having to worry about handling everyday IT systems, the majority of which are fairly generic. Getting a CTO is no magic wand to unleashing an enterprise’s potential. But it does help it to prioritise appropriately.

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