What Are The Chief Digital Officer Responsibilities? – 6 CDO Responsibilities Explained

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Frequently, businesses are attempting to incorporate the most recent technologies into their operations. They might hire a group of experts in information technology (IT), with the chief digital officer (CDO) typically in charge of the department as a whole. You can decide if working as a CDO is the right career path for you by learning more about the job.

We list the responsibilities of the chief digital officer, define what a chief digital officer is, talk about their qualifications, and talk about the skills that are necessary to succeed in this position in this article.

There is a lot on the plate for chief digital officers (CDOs); In addition to being accountable for their organization’s digital transformation and future-proofing, they must do so without interfering with the CIO and CTO.

That could make sense of why the job isn’t excessively normal – a few associations don’t ‘formally’ have a CDO, it’s simply an integral part of the CIO and CTO jobs. Businesses, on the other hand, are gravitating toward the CDO more and more as they realize that this sector of IT requires specialized attention that cannot be provided by any of the other positions currently in place.

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Naturally, the COVID pandemic has accelerated a new appreciation for the CDO role, as with all current digital trends. In response to the disruption caused by the pandemic, 69% of boards have increased their digital business initiatives, according to a recent Gartner Board of Directors survey. This includes the widespread adoption of digital services like virtual private networks (VPNs) and platforms for video conferencing as well as the trend toward remote work.

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Who is a chief digital officer?

A C-level specialist known as a Chief Digital Officer, or CDO, is in charge of driving digital transformation within a company by establishing an innovative ecosystem that will eventually transform an analog business into a digital one. A CDO makes use of digital information and cutting-edge technologies like the cloud, the Internet of Things, mobile apps, social media, machine learning-based products, and digital marketing to make this conversion possible.

6 key chief digital officer responsibilities

Mr.Garry gave a keynote address on the rise of the Chief Digital Officer a few weeks ago at the Argyle Leadership in Digital Marketing Forum in New York. It turned out that half of the attendees were thinking about applying for the CDO position while the other half already did so.

The demands of the modern digital era necessitate a CDO position. After all, who else will make sure that the company’s most important strategies are supported by new organizational competencies and emerging technologies?

Due to the fact that it is a real job description for a Chief Digital Officer of a financial service company, that last sentence ought to be in quotes. In response to my own inquiry: Numerous people Chief Information Officers, Chief Marketing Officers, Chief Technology Officers, Chief Data Officers, Chief Strategy Officers, and newly appointed Chief Marketing Technology Officers all anticipate implementing digital capabilities in their day-to-day responsibilities.

In the interim, newly appointed CDOs face additional difficulties. They are caught between CIOs’ and CMOs’ divergent perspectives. They are expected to make use of the technology expertise of an IT department that is frequently marginalized. It is unclear who owns digitally connected solutions like mobile, big data, and analytics. Digital initiatives may even be hampered by high-touch legacy cultures. As it turns out, many businesses hire the CDO before fully defining the position. To be truly effective, the CDO, in my opinion, must excel at six essential functions.

The chief digital officer’s responsibilities typically center on three main areas: leadership, strategy, and operations. The specifics of each of these areas differ based on the company’s particular difficulties and organizational structure. The following are typical duties and responsibilities that businesses frequently assign to their CDO:

  1. Develop a digital strategy
  2. Plan and execute digital initiatives
  3. Keep informed of digital trends and technologies
  4. Establish metrics to determine ROI
  5. Create a relationship with partners and customers
  6. Attract and retain top talent

1. Develop a digital strategy

The creation of a digital strategy outlining precisely how the organization can achieve success in its digital endeavors is one of the CDO’s most important responsibilities. This frequently entails analyzing the organization’s current digital capabilities and comparing it to data from competitors and similar businesses. The CDO then creates a strategy for how the business can achieve its objectives with the leadership team and, frequently, the IT team. Because it ensures that the business is making the most of its resources, a well-written plan is cost-effective for the company.

One of the most important responsibilities of the CDO is developing a clearly defined digital transformation strategy with an understanding of the steps required to achieve it. A CDO collaborates with cross-functional partners and teams to ensure that everyone is on the same page when mapping and converting traditional processes to digital ones. A CDO is also responsible for integrating all relevant digital initiatives with the strategic planning process to ensure leadership commitment, appropriate resource allocation, and plan execution.

A digital-first culture must be built in order to adapt to digital changes. The ideal candidate for that position is the Chief Digital Officer. By communicating their vision to the teams and incorporating it into their work, they help the business achieve its digital transformation goals.

CDOs must take into account all aspects of the business in order to design the digitization of the company and permanently embed digital within it. The development of agile skills among employees and the introduction of new work formats will also be part of the cultural shifts.

2. Plan and execute digital initiatives

Facilitating digital initiatives is the responsibility of the chief digital officer. The company may undertake these projects to enhance their digital capabilities. In addition, it is the CDO’s responsibility to ensure that the company successfully implements the initiatives, measures their success, and makes any necessary plan adjustments. In addition, they ensure that the implementation costs remain within the budget. It is critical that each initiative adheres to the company’s overarching strategy.

3. Keep informed of digital trends and technologies

The chief digital officer’s success depends on how well they keep up with industry trends and technological advancements that could affect or benefit the business. This involves networking with other CDOs and industry leaders, reading industry news, and attending conferences. In addition, it is the CDO’s responsibility to ensure that the business is utilizing the most efficient technology for its requirements and to educate the leadership team about the impact of technology on their operations.

There is a constant stream of new technology-related innovations. A chief digital officer (CDO) is an executive who is in charge of bringing about change and steering a company’s move toward digitalization. As such, he or she must be aware of emerging technologies in order to achieve the objectives. This can include Internet of Things (IoT) systems, chatbots powered by AI, and CRMs.

4. Establish metrics to determine ROI

To determine the return on investment (ROI) or the success of their digital initiatives, chief digital officers develop a set of clear and measurable metrics. These can be quantitative or qualitative measures, such as enhancing brand perception, or goals like increasing sales or leads by a certain percentage. Additionally, these metrics can be used to evaluate both the internal and external effects of the company’s digital direction, such as productivity and efficiency.

Digital transformation is only half the work; A CDO will be responsible for keeping an eye on all of the projects to determine whether they are successful and add value, such as increasing customer engagement or driving new revenue. A CDO should calculate return on investment (ROI) and report on the outcomes of digital projects initiated because these things can be measured.

5. Create a relationship with partners and customers

The CDO leverages their influence and ability to communicate effectively to establish and maintain external relationships that enhance the digital ecosystem of the organization. Partnerships with other businesses, such as technology providers or businesses that may complement the company, typically make up the majority of these relationships.

They may also include interactions with customers and other stakeholders and collaborative projects with academic institutions, government agencies, and other organizations. The CDO is accountable for maintaining these relationships and ensuring that they are beneficial to both parties.

6. Attract and retain top talent

The CDO collaborates with the HR department to recruit talent capable of assisting the company in realizing its digital vision. Additionally, they equip the workforce with the technological expertise required to support the expansion of the business. This indicates that the CDO collaborates with other departments to educate team members on how to make the most of digital platforms to enhance their work performance.

This shows that the company is investing in the development of its employees, which may increase their engagement and productivity, which helps retain talent. Additionally, it aids in the recruitment of fresh talent who are frequently exuberant about the potential opportunities presented by a digitally focused organization.

As it is impossible to build digital capabilities throughout the company without the right people on a team, a CDO should collaborate with the HR team to retain talent. Digital innovation and transformation are currently in greater demand than there are qualified specialists on the market or within organizations. Therefore, a CDO assists recruiters in locating potential candidates to fill staffing gaps.

What is a chief digital officer?

A senior executive who is primarily accountable for the digital strategy of the company is known as a chief digital officer (CDO). This indicates that they take a comprehensive approach to the digital presence of the company and guide it through its digital transformation and expansion, typically by utilizing cutting-edge technologies and big data.

Data analysts, computer engineers, digital marketers, and other IT professionals are often managed by CDOs. They frequently have a lot of experience in the field. They are able to quickly identify any technological gaps or difficulties and figure out how to appropriately respond to them to boost the organization’s performance as a result.

The CDO is responsible for directing and coordinating their organization’s efforts to implement a digital transformation strategy. This means adhering to a company vision to bring their business into the future and ensure that all departments, from IT to finance, contribute to the company’s goals for digital transformation. They may not have created this vision themselves.

How does a CDO differ from a CIO and CTO?

To ensure that the company achieves success in its technological endeavors, chief digital officers, chief information officers (CIOs), and chief technology officers (CTOs) frequently collaborate. All of them are executive positions that involve overseeing a company’s technology departments and necessitate strong management and leadership abilities.

The CTO, on the other hand, looks externally at technological advancements that the organization can leverage to improve their business, whereas the CIO typically focuses on innovations within the company, such as improving processes. Leading the entire organization toward becoming more digitally advanced is the CDO’s primary concern.

Qualifications of a chief digital officer

The CDO is a very technical person who knows a lot about how to use technology to make an organization work better. They have a wealth of industry experience in addition to in-depth knowledge of the most recent technologies and industry trends. Common qualifications include:

  1. Education
  2. Certifications
  3. Experience

1. Education

A bachelor’s degree in computer science, information technology, information systems, engineering, or another relevant field is typically required for CDO positions. Additionally, they might hold a relevant advanced degree, like a master’s or doctoral degree. They often get additional training in management or business, which helps them understand how technology and business interact in a complicated way.

2. Certifications

Certifications may not be required, but they are frequently advantageous for CDOs. These show and validate their technical knowledge and expertise. A CDO’s level of expertise typically determines the kinds of certifications they may hold. A CDO, for instance, who has held a position as a developer and is employed in the software industry may hold a programming language certification. Project management, software development, data analysis, and IT leadership are some popular certifications for CDOs.

3. Experience

Through well-thought-out strategies and initiatives, a chief digital officer steers the entire organization’s digital evolution. They need to have a lot of relevant work experience in order to be effective. Candidates with five to seven years of experience in positions requiring team management, project leadership, and the use of technology are typically taken into consideration by employers. Additionally, a professional who has pioneered technological advancements may be preferred by businesses.

8 Essential skills for chief digital officers

When hiring a CDO, employers take into account a candidate’s skills as well as their education and experience. CDOs who succeed have a combination of technical and non-technical skills that enable them to manage an organization’s digital transformation in an efficient manner. The following are some of the necessary skills for a CDO:

  1. Information communication technology (ICT) skills
  2. Communication
  3. Decision-making
  4. Leadership
  5. Business acumen
  6. Extensive understanding of digital structures and products
  7. Project management
  8. Data understanding

1. Information communication technology (ICT) skills

A CDO must be knowledgeable in information and communication technologies (ICT), which include software, hardware, and the internet for electronic information communication and sharing. Programming, web development, and data analysis are the most common ICT skills for a CDO. When choosing which new technologies to implement, they may have an understanding of the most recent technologies, such as artificial intelligence and machine learning. They might also know how to use a variety of software programs well.

A CDO’s skills are primarily focused on information technology. If you look at the table, you will notice that the majority of CDOs have a degree in addition to Business Administration in Computer Science or Software Engineering. This is because many businesses require their Chief Digital Officers to have an IT degree. A CDO needs to understand how cutting-edge technologies like machine learning, data engineering, and the Internet of Things work in order to make better decisions regarding digital transformation.

2. Communication

CDOs with strong communication skills are able to plan and implement their digital strategies with clients, external partners, and multiple organizational teams. Additionally, it assists them in training and interacting with the workforce of the business. It is essential for them to be able to clearly and easily understand technological concepts as they maintain the digital ecosystem and communicate with stakeholders frequently.

The Chief Digital Officer must be able to communicate digital processes and their benefits to all parties, inside and outside the organization. The CDO’s primary responsibility is to implement novel approaches to standard workflows, which can frequently result in disruption, especially within the company. That’s why it’s important for CDOs to communicate openly and clearly about their efforts to improve.

3. Decision-making

The organization’s success in its digital transformation is influenced by the CDO’s decision-making skills. They need to be able to look at a situation and figure out the best course of action. They must also be able to collaborate with a variety of stakeholders and consider a variety of points of view in order to make well-informed decisions that are in the organization’s best interest.

4. Leadership

The CDO is a senior position that requires leadership and teamwork skills. They must be able to motivate their teams to accomplish their objectives and work effectively. The ability to manage one’s own time, collaborate effectively with others, communicate clearly, and make decisions when necessary are all aspects of leadership. By highlighting their management experience, candidates frequently demonstrate this ability.

The CDO must be a successful leader who has managed cross-functional teams and developed them in a fast-paced, complex, mission-focused environment. In order to achieve operational goals and plans, they oversee, coordinate, lead, and evaluate professional employees’ work. In order to foster a culture of continuous improvement and place a high priority on the professional development of all team members, the CDO needs to be an inspiring leader.

5. Business acumen

This senior position, known as the “voice of the business,” is tasked with enhancing a company’s productivity and efficiency by utilizing BI and analytics in addition to technology. They must comprehend the corporate domain, assess the market, and identify profit opportunities for this.

6. Extensive understanding of digital structures and products

The CDO’s second skin is digital. This specialist tests new technologies to learn about them and how they affect business. The CDO decides whether a company should pay attention to the next emerging digital trend. However, it is essential for the CDO to be able to distinguish the real thing from the noise, or the trendsetting from the irrelevant.

7. Project management

Among the top five most frequently mentioned CDO specialist skills are proven abilities in project management, particularly in the IT field. The goal of a CDO is to create a “funnel” of experiments that can be quickly tested by focusing on real-world business issues. The CDO must be familiar with Agile project management best practices and methodologies because digital transformation is also a project.

8. Data understanding 

Digitalization will occur for everything that can be digital. This requires a significant amount of data use. As a result, CDOs must have a thorough understanding of how a company’s data pipeline should be constructed when implementing digital products as well as an excellent understanding of end-to-end data processes.

Who does the chief digital officer report to?

The chief digital officer could report to the CEO, COO, CFO, CTO, CIO, or even the CMO, depending on the job description, responsibilities, and importance level. The CDO role can be very different and new to some organizations.

For instance, if the chief digital officer plays a more visionary role and is in charge of shaping the company’s digital future, the CDO might report to the CEO or COO, and other C-level executives might report to the chief digital officer. The CDO may report to the CFO for businesses that need to incorporate new technologies into their financial services procedures.

The CDO may report to the CTO in situations that necessitate technical decisions regarding products and services. The CDO may report to the CIO if digital transformation focuses on IT-related processes. The CDO may report to the CMO in businesses working to analyze customer buying patterns and enhance customer experiences. Experts agree that the CDO should have authority comparable to that of other C-suite executives in order to maintain influence and succeed.

Chief digital officer vs CIO vs CTO vs CDO

Digital transformation can benefit from the direct involvement of the CDO, CIO, and CTO. In the past, an organization’s chief information officer has been in charge of running the company’s internal IT infrastructure and services. 

On the other hand, the chief technology officer is in charge of managing client relations, staying up to date on new technologies, and developing policies and procedures that make use of technology to make products and services better for customers. The chief digital officer position was created to be more focused on the outside world, focusing on the people, processes, and technology required to create digital advantage and enhance customer experience.

The roles of the CIO, CTO, and CDO have become more and more muddled over time. In point of fact, the chief digital information officer (CDO) is sometimes referred to as such. When it comes to defining their roles, the ambiguous lines can also apply to chief digital officers, chief data officers, and chief analytics officers. Many of these roles can be combined into one title, depending on the industry and company size.

In practice, businesses are discovering that integrating, modernizing, or eliminating legacy systems and applications is necessary to transition from an analog to a digital business model. As a result, job requirements for chief digital officer positions have changed as a result of the growing recognition of the significance of technology expertise to the creation of an efficient digital strategy.

Additionally, businesses are coming to the realization that creating a digital advantage is not a task for a single individual but rather an enterprise-wide endeavor that necessitates the expertise and input of executives from the C-suite, managerial ranks, and employee ranks.

Chief information officer vs chief digital officer (CIO vs CDO)

A corporate executive known as the Chief Information Officer (CIO) is in charge of establishing and overseeing information technology (IT) infrastructure as well as ensuring that the entire IT department functions effectively.

Additionally, it is their responsibility to outline a company’s tech-related strategic goals. Today, a company’s IT architecture and infrastructure are the CIO’s primary focus. Digital transformation is one of many areas of responsibility that fall under the purview of some businesses. The Chief Digital Information Officer position may arise as a result.

The CDO is in charge of the company’s overall digitization strategy and direct business connection, while the CIO is in charge of the technical aspects of digitization. They frequently collaborate, complementing one another’s roles, in large corporations.

Chief technology officer vs chief digital officer (CTO vs CDO)

The term “Chief Technology Officer” (CTO) refers to a corporate executive who is in charge of developing and implementing the technology stack necessary for business expansion. The term “CTO” originally came from the position of “CIO.” CTOs focus on a company’s technology operations, external customers who buy products, and ways to boost revenue and profitability.

The CDO’s role in the company is more inward-looking, whereas the CTO has a more outward-looking role that focuses on identifying and implementing new technologies. They are thought to solve technical issues that already exist.

Chief marketing officer vs chief digital officer (CMO vs CDO)

A corporate executive known as a Chief Marketing Officer (CMO) is in charge of planning, developing, and carrying out a company’s marketing and advertising initiatives. CMOs are frequently the ones who drive digitization and the innovation agenda.

The CDO, like the CMO, supports the shift to digital marketing: from conventional marketing to mobile devices, social networks, and wearable technology. CDOs devise strategies for exploring novel opportunities and opening up new markets.

Salary of the chief digital officer

Depending on the responsibilities associated with the CDO’s diverse, expanding, and evolving role, the average compensation of a chief digital officer in the United States can vary significantly. The average annual salary for a CDO in the United States, according to ZipRecuiter, is approximately $150,000, with a range of $125,500 to $192,500. Salary.com puts the average annual salary at $204,500, with a narrower range of $181,000 to $224,000, and Payscale puts the average annual base salary at $203,000, including bonuses.

Future of the CDO role

Many businesses are still in the process of digital transformation or have not yet started. According to Enterprise Strategy Group (ESG), a division of TechTarget, nearly three-quarters of businesses are in process, just beginning, or only planning to digitally transform, while one-fourth of businesses reported that they are at the maturity level of implementing and optimizing several digital transformation initiatives.

Younger businesses and startups are more likely to be data-centric, whereas older businesses are much more motivated to transform digitally in light of the COVID-19 pandemic’s disruptions to operations, workforces, and supply chains. The evolving role and title of chief digital officer ought to achieve greater clarity and importance as more businesses accelerate their digital transformation initiatives to maximize their digital assets, incorporate new technologies, and maintain high-level competition.

Additionally, there ought to be less resistance to change across the entire organization. The ideal combination of technology, marketing and communication skills, business acumen, and executive experience will be required of future CDOs.

6 roles and responsibilities of the chief digital officer

As it turns out, many businesses hire the CDO before fully defining the position. To be truly effective, the CDO, in my opinion, must excel at six essential roles and responsibilities:

  1. Link strategic priorities to digital capabilities. If digital is not assisting the company in reaching its goals, it will not receive the visibility or support it requires.
  2. Assume the role of executive sponsor for the innovation of digital processes. Digital capabilities may not be measured by other executives in terms of new functionality or economies of scale. Consider, for instance, the difficulties associated with digitizing the mortgage loan application and the ways in which it will affect a number of existing business procedures.
  3. Create and manage the portfolio of digital projects. Executives in the line of business might be in charge of actually putting digital solutions into use. It is essential to have centralized control over the often-differing digital initiatives.
  4. Analyze the return on investment and new efficiencies. Utilizing technology to replace manual procedures results in revenue generation and cost savings. Because the CDO is in charge of all digital initiatives, he or she is uniquely qualified to gauge success.
  5. Find strategies for attracting and retaining top talent. Companies frequently have digital visions that are more mature than skills.
  6. During delivery, be the “executive intermediary.” During the rollout of digital capabilities, this frequently entails involving other executives, reestablishing priorities, coaching, or acting as a tiebreaker.

Where do CDO come from?

CDOs should have a solid education because they hold high-level management positions. In addition, the expertise typically encompasses both technological and business fields.

For instance, Microsoft’s CDO Andrew Wilson has a degree from Loughborough University in Leicestershire, UK, in both computer science and business studies. Faraz Shafiq, a CDO at Amazon Web Services, has a Bachelor of Science degree in computer science and an MBA from the Haas School of Business at UC Berkeley.

Most of the time, CDOs are promoted from other C-Level positions like Senior Managing Director, Chief Information Officer, and Chief Data and Analytics Officer within the company. The promotion may be contingent on the accomplishment of digitization or other recognition projects. In addition, it is necessary to demonstrate management skills, extensive specialist knowledge, and hands-on experience in the technical and business fields.

The top management member faces significant demands and difficulties due to the immense responsibility of the CDO. It’s a good idea that most opportunities require more than 15-20 years of involvement with this or related jobs. However, in smaller businesses, CDO duties are frequently performed by CIOs or even CEOs.

It isn’t so phenomenal for such profoundly qualified leaders to be allured away by talent scouts and selected for another organization, which is one more approach to progressing to CDO.

A CDO’s credentials cannot be attributed to a specific degree program. The only things that matter are the “transformer” mindset and the prolonged experience in the related fields. However, as the table demonstrates, CDOs must possess a Master’s degree in a related field, such as marketing, computer science, business administration, or communications.

When do companies need a CDO?

You shouldn’t just grab something without thinking about it just because it’s there, right? The existence of a Chief Digital Officer position can be thought of in the same way. If you run a large company with many departments and are just starting to implement digital transformation, you should hire a CDO or promote one of your innovative employees to this position.

However, a CIO, CTO, CMO, or even CEO may begin to assume a broader role, including those belonging to the CDO, in smaller organizations with smaller budgets.

At the same time, the need to create a separate position disappears when larger businesses already have some kind of digital transformation underway, meaning that CDO responsibilities are handled by other specialists. In the reverse situation, small businesses that are unsure of where to begin their digital transformation journey may choose to hire a specialist.

Why is a CDO role is worth of attention?

Digitization will not let up anytime soon. Whether they like it or not, companies must invest in digital activities to remain competitive. One application’s integration can make a big difference. In addition, it is not about integrating software; rather, it is about comprehending all of the requirements of the business and locating the ideal solution to enable digitalization.

The Chief Digital Officer (CDO) makes sure that digital activities support and align with the organization’s overall strategy. The CDO position will continue to be in high demand due to the fact that many businesses have not fully adopted the digital world.

Researchers discuss the CDO’s role profile, their contribution to digital transformation, and future prospects for the CDO position in terms of its possible disappearance or the promotion of CDOs to other top executive roles, about 15 years into the CDO position’s existence.

How does a company add a CDO role to its C-level board?

The CDO’s or “transformer in chief’s” position can be anchored in a variety of ways.

  1. Creation of a new digital-focused department
  2. Promotion of an existing manager role
  3. Merging specialist teams

1. Creation of a new digital-focused department

With the arrangement of a CDO to the corporate leader level, another division is made in the administration board. This demonstrates that it is not about managing the company’s digital capabilities as such but rather about their massive future-oriented expansion.

2. Promotion of an existing manager role

The entire organization is made aware that the current strategy has been reprioritized to digital by the promotion of a top manager who is in charge of digital transformation. It is possible to keep the organizational structure largely the same.

This prompts just minor changes in capabilities in the organization. Most of the time, the motivation for this choice is a desire to expand existing markets and create more cutting-edge products. The purpose of this scenario is to demonstrate to employees that digitalization is already having a significant impact on the company’s progress and that the business is on the right path.

3. Merging specialist teams

Managers of digital projects that are already widely dispersed throughout the company can come together to form a digital team and share responsibility for their portion of the work. As a consequence of this, employees who deal with digital issues are centralized, but they continue to work in their traditional areas. In this variant, structure and organization are largely unaffected.

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