Do We Need a Chief Digital Officer?

The digitalization of businesses has created an imperative for change that cannot be resisted. IT has to support fundamental organizational change. IT must become a business enabler, rather than obstructing change.

However, enabling new forms of digital business requires that IT take a fundamentally different role. In fact, IT is not about technology anymore, it must focus on understanding and fostering the digital business. It must enable the shift to new business models and support this shift by ensuring agility in the underlying technology, whether on premise or in the cloud.

Never since the industrial revolution have we seen such a fundamental change in business. This is more than just “industry 4.0”, a term quite popular in Germany to describe the change that affects manufacturing by connecting plants, things, and customers. This revolution affects any type of business; whether this is the automotive industry and connected vehicles, the utilities and smart metering together with decentralized power generation based on solar or wind power; or whether it is a fundamental change in the publishing and printing industry. This is all about the digitalization of businesses.

The new ABC is simple: Agile Businesses – Connected to their customers, partners and associates.

It has to master this change, but can IT do this? It sees itself as supplier of technology rather than a business enabler, and this explains why things do not work or are insecure. For example, businesses started adopting the cloud so quickly in order to gain agility.

In today’s world of the Agile Business Connected the biggest challenge and matter of survival for organizations is bridging the gap between business and IT. IT is the essential enabler of digitalization, for this new business model. However, as long as the focus is on traditional IT, the gap will remain. There needs to be a new role at the C-level of organizations – the person that drives this digitalization. This person should envisage and understand the new business models and together with their team make them work. This must be the person that bridges the gap between business and IT and therefore enables digitalization.

This could be the CIO or could be a new role in the organization, with the CIO being responsible for the “technology” piece within IT. But one thing is clear to me: organizations need someone who drives the digitalization of business with a strong understanding of both business and technology.

This article has originally appeared in the KuppingerCole Analysts' View newsletter.



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