Nineteen per cent of the world’s top 2,500 companies now have a designated executive to lead their digital agenda, according to a new study from Strategy&, PwC’s strategy consulting business.
The title attached to these executive roles vary from Head of Digital Transformation to CTO, CIO and Chief Digital Officer. To keep things simple the study broadly refers to these execs as CDOs.
The 2016 Global Chief Digital Officer Study looks at the top 2,500 public companies around the world by market capitalisation to better understand how these companies are appointing a digital leader, who they are, and where the position fits into companies’ hierarchies.
Last year only 6 per cent of companies analysed had hired such an executive and 60 per cent of all CDOs were hired during 2016 and 2015.
Within Asia-Pacific, Australia leads the way with a CDO present in 40 per cent of companies.
Companies in the financial services and consumer-focused industries have the highest digital leader ratio and 40 per cent of CDOs are members of the c-suite.
“For a growing number of companies, it’s just not feasible any longer to spread out various digital efforts among separate business units,” says Pierre Peladeau, a leading digital practitioner and study co-author with Strategy&, partner with PwC France.
“It may work during early stages of digitalisation, but as a company moves towards a more advanced stage of digital maturity, a unified approach is needed to execute a more comprehensive digital strategy.”
Taking the helm of a holistic digital strategy means different things for different companies. For this reason digital executives come in various forms, with a variety of different skills in tow.
The leading background of CDOs are ‘marketing sales and customer service’ (39 per cent) and technology (32 per cent).
The type of digital executive a company needs is most directly correlated to the company’s specific mission, condition and requirements, the report said.
Just over half (52 per cent) were recruited internally and 46 per cent were external hires. 16 per cent of CDOs are female, 84 per cent male.
A transformational role
“One of the most daunting challenges for any digital leader is how to develop new digital applications at the same time as they’re dealing with legacy IT systems that have been vital to a company’s operation for years,” says Mathias Herzog, Strategy& co-author and partner with PwC US.
“As this becomes more and more apparent, we should continue to see a growing number of executives with the technical expertise necessary to navigate a company’s multi-faceted digital assets.”
Knowing how to work within these constraints while simultaneously maintaining the operational agility needed to move digitalisation efforts forward will be key for any incumbent digital leader, the report said.
“The CDO’s role, by definition, is transformational,” says Olaf Acker, co-author and Digital Services leader with PwC Strategy& Germany.
“Which means anyone assuming the role has to balance the old technologies with the new, technical expertise with an understanding of internal organisational mechanisms, and a vision for a company’s future that also aligns with its longstanding mission.”