Author: Mark Firth/Monday, May 20, 2019/Categories: Blogs

As organizations look to strengthen their digital transformation initiatives one question that crosses everyone’s mind is that can CIOs act as the CDOs for organizations today? Or there exists a need a separate CDO who can partner with the business and IT to drive digital transformation?

To seek an answer to this question, one must take a deep dive into how innovation takes place in organizational settings. IT has always been at the forefront when it comes to strategic deployment of new technologies for business transformation. But the role of technology has reached far beyond just supporting business operations. Today, technology is enabling data management, reporting, and analytics, which help to deliver improved customer experiences and create innovative business models. This has opened up new revenue streams through digitally enhanced, data-driven products, services, and experiences.

Gartner refers to bimodal innovation which has 2 modes. Innovation in mode 1 is focused on IT infrastructure efficiency and reliability where as in Mode 2 innovation is focused on increasing business agility, transforming customer-facing processes and customer experiences, and developing new business models.In mode 1, the CIO runs the IT organization wherein he/she commands what can be done and what can’t be done on the IT systems, what can be accessed and what can’t be. The CIO is in charge and in control. In mode 2, as one moves to the world of digital, it is the customer who is in control and demands what he/she wants.

The answer to the question lies in understanding the difference between data and information and how these are respectively managed in order to achieve improved intelligence and insights for an organization. For example, investing in new digital platforms is critical to enabling digital transformation initiatives. But sometimes digital transformation can’t be scaled to the organization as a whole because of incompatibilities with core systems, lack of security, or compliance issues etc. The person in charge ( most likely a CIO) struggles to manage both, the transactional IT stack and the digital stack. There’s a need for a better operating model between the two and how they will work together.

According to The SAP Digital Transformation Executive Study, in order to be successful organizations must combine the best of these modes to follow what is typically known as a bimodal approach to innovation. However, the traditional CIO role largely encompasses keeping the company running efficiently and effectively, at the lowest cost and least disruption. In comparison, CDOs are more about disruption and digital transformation. In some organizations, the CIO and a CDO are clearly defined. For example, the CIO influences digital decisions while also overseeing the IT operation across the workforce where as a CDO can be seen as a supporting role to the CIO in developing digital initiatives to help the organisation.

The traditional CIO can be interpreted as a manager of continuity while the CDO is a manager of change. Organizations very well understand the fact that they need to balance continuity of the current business on the one hand with rapid technological change and deep strategic transformations on the other, which is why the two separate leadership roles exist. But then again, a large number of CIOs are looking at bridging the gap between the two, blurring both roles and making the position of CDO redundant!