Having tracked the growth of one CDO (Chief Data Officer) recently, the Industrial Internet blog looks at the rise of another equally important digital leadership role – Chief Digital Officer.

Chief Digital Officers (CDOs) are in a hot seat. From government to manufacturing to services, everyone seems to be in a race to hire one. Their numbers have doubled every year since 2005 and are expected to triple this year.

Digitalization wave

It's easy to see why. The push comes from digitalization of the shopfloors, supply chains, sales channels and customers. These Industrial Internet-enabled digital innovations go far beyond automation of operations and faster, cheaper and scalable product lines. A network of sensor-fitted smart machines, artificial intelligence and Big Data algorithms promise to change the industrial world of aircraft engines, power plant, rail locomotives and medical imaging equipment. This is sure to redefine business models and alter the competitive landscape and, sometimes, create entirely new industries.

What does a CDO bring to the table?

Someone has to do the heavy lifting required to plug companies into the Industrial Internet age. But the current enterprise IT is not set up to easily deliver business answers to technology questions. IT folks, themselves are not sure if they can keep pace with the digital age. Fifty-one percent of CIOs are concerned that the digital torrent is coming faster than they can cope, and 42 percent don't feel they have the right skills and capabilities to face this future, says this Gartner report.

And that's where the CDO steps in and takes charge as a digital facilitator. A CDO's exact responsibility will depend upon the relative maturity of an organization and its leadership's digital capabilities, but their success rides on how well they combine their operating experience, software product development skills, domain expertise and management skills. They need to make sure that they are more than just a demonstrable sign that a company is serious about digital technology. Positioned to be a catalyst and a link between technology and business functions, they need to

  • Formulate digital business strategy and rally support around that vision
  • Embrace disruptive new business models, enabled by new digital technologies like 3D printing, cloud, analytics and Industrial Internet
  • Manage these transformations and initiatives across operations, supply chain and customers
  • React to market and technology changes in Internet time

Digital pecking order

Being an important part of the digital arsenal, CDOs are well paid and, in some cases, can fast track to the CEO seat. According to the latest report from digital marketing and IT resourcing provider, Mondo, CDOs topped the list of the highest paid digital marketing professionals and the CDO Talent Map 2014 shows more than seven CDOs became CEOs and more than four joined public boards last year.

CDOs are often seen as a threat to other technology and digital marketing roles, but that is not always the story. While CIOs tend to bring the tech acumen, CMOs come from marketing background and chief digital officers are rooted in their analytics and governance experience.

Meeting the digital future

This role seems all set to continue on a growth path till corporate strategies ride on the digital wave. And once digital becomes core part of corporate DNA, skill sets of a CDO will be in a great demand and will drive every role in the C-suite.

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