CIOs are making the chief digital officer obsolete

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With digital transformation set to dominate business strategy in the coming year and technologies like artificial intelligence and blockchain maturing, opportunities are abounding for the CIO.

For the CDO—not so much.

CEOs’ enthusiasm for naming a chief digital officer to act as an internal change agent is fading, argue two Forrester Research analysts. Instead, they maintain that CEOs increasingly expect their CIOs to lead the digital charge by deploying the underlying technologies, closing the digital skills gap, and joining forces with CMOs and other C-level executives to address transformational issues across business silos.

For many CIOs, greater role clarity and healthier technology budgets will bring a welcome dose of stability, say researchers Pascal Matzke and Matthew Guarini. Still, most CIOs will need to operate in a constant state of flux, as their firms face up to the fact
that organizational silos and digital bolt-on strategies are at odds with providing a true digital experience for their customers.

Armed with clear board mandates, CEOs will take no chances and significantly restructure their companies to accommodate new digital platform and subscription-based businesses models. This shift will accelerate, and by the end of 2018, Matzke and Guarini estimate that global industrial firms like GE and Siemens will generate around 40 percent of their revenues from metered asset usage or similar software-enabled service schemes. This will lead many CEOs to consider spinning off or divesting portions of their business to create a more nimble and focused company.

Product managers
In the face of these near-constant reorganizations, the Forrester analysts suggest that CIOs think and act like product managers. Among other things, they say, this means abandoning a traditional bi-modal approach to development, in favor of concepts like Agile, DevOps and design thinking that allow for faster delivery of new services.

To actively lead their companies’ digital transformation, “CIOs in 2018 will double-down on developing their leadership skills,” the two Forrester analysts write in their report. “Key to this will be showing they can win and retain the necessary talent, and upgrade the culture and structure of their organization, to align with the need for customer obsession.”

Doing so, Matzke and Guarini say, “will present CIOs with the opportunity of a lifetime, allowing them to demonstrate the level of trust and performance that their senior peers and boards require.”

In the course of all this, they add, CIOs will need to re-shape their teams with new talent.

“Our research shows that there is more than enough talent to fill the needs in technology shops today,” the Forrester analysts contend. “However, 65 percent of CIOs state that a skills shortage is holding them back.”

This, they say, will lead many CIOs to reduce their reliance on traditional recruitment channels and look to new sources of talent to re-energize their teams.

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