As digital transformation gains pace around the world, business leaders are both looking to acquire digital business acumen and figuring out how they and their departments fit into the new digital enterprise.
When Vlerick Business School recently gathered a panel of Chief Marketing Officers (CMO) to discuss digital innovation, focusing on how they collaborated with their respective Chief Information Officers (CIO), several challenges emerged. As the CMOs were from organizations involved in digital innovation and were individually tech-savvy, one would have expected mutual understanding with their CIOs. In fact, for half of the panel participants the opposite was true and the session revealed some significant trust issues.
Digital transformation is happening and companies need to sort out how they will operate and who is responsible for what. In a 2014 Gartner global survey of executives, 50% said they expect to transform, at some level, into a digital business by the end of 2016. And 54% of board directors said they were directly engaged in digital business transformation.
The Vlerick Business School panel made these four key observations about digital innovation governance from a CMO perspective:
1/ The CMO wants a share of the prize. Digital innovation is a growth area in organizations in terms of strategic – and hence budget – importance. The IT savvy CMO will claim at least a part of that responsibility and budget. Most CMOs leverage their proximity to the customer as a sensible and powerful argument, to increase their share of the prize.
2/ In the digital innovation process the CIO is a welcome partner, but not to the expense of control over the digital business strategy, at least from the CMO perspective. If they collaborate, CMOs prefer to have the CIO involved from the early stages of digital innovation, in order to be more effective. The CIO is then expected to be able to think in terms of customer value creation and to suggest ways to decrease the time-to-market and cost of digital innovations.
3/ A structured collaboration process between CMO and CIO is mostly absent. It is ‘ad hoc’ at best, often ‘live and let live’, and worst case scenario, a true turf war. CMOs describe the IT governance rules and processes as a straitjacket, which is the prime reason to limit the CIO’s involvement.
4/ More positively, CMOs with a strong connection with their CIO counterparts seem to be more successful in the long run. They describe their collaboration as a partnership to the benefit of sustainable end-to-end digital innovation, as an alternative for fast but local innovation.
These observations lead to several further questions:
a) If CIOs are not structurally involved, how long will it take before digital innovation initiatives get stuck in scalability, compliance, reliability and other issues?
b) Digital transformation by definition involves enterprise-wide cultural change. How can deep change succeed, if even the C-suite is not aligned about digital innovation?
c) Then there is the new kid on the block: the Chief Digital Officer. How does a CDO fit into the picture without just increasing digital innovation governance complexity even more?
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Read IEDP's interview with Marion Debruyne Dean of Vlerick Business School in Developing Leaders