The case for a Chief Digital Officer

When nobody in the corporation owns the strategy to exploit the consumer data the way the supply chain data is exploited for the benefit of the business, there might be a case for a Chief Digital Officer

Hagen Wenzek, 2013-06-26

In the early 2000s a major disruption swept through industrial companies and retailers: what started out as the Internet bubble became e-business and made all of their supply chains incredibly transparent. As a result, suppliers were forced to benchmark their prices against competition all over the world. They had to operate inventories at the client's site and open their manufacturing methods and show their costs. The benefits promised to a company that embraced that change were so great, that they took every effort to transform their operations, re-align their suppliers on a global level (including outsourcing to e.g. China) and innovated their products faster than ever before.

What has become mainstream on the supply side over the course of the last decade appeared also on the sell side. Here it is the transparency of the customer that provides tremendous opportunity. Consumers are handing their most private data to advertisers. Every one of their moves online or offline can be tracked and traced. And few clever advertisers provide most precisely targeted ads at every demography - since the tablet revolution even to most affluent consumers - and achieve up to 90% profit margin on their transactions.

However, that promise has not started a widespread transformation of operations, sales nor even marketing. Most of the time that 'Big Data' sits in big databases and might clumsily be harvested by individual data scientists using good old Excel. What is missing is a comprehensive strategy to exploit the sell side data in the same way as it was developed and executed on the supply side years ago. This lack is even more surprising given the advances in technology, especially thanks to cloud computing with its principles of scalability, self-service and drastically reduced costs. Developing such a strategy with the certainty that it can be executed successfully requires an understanding of marketing, technology, customer behavior, and the digital ecosystem paired with strategic thinking and execution capabilities.

The owner and driver of this strategic space is often referred to as the Chief Digital Officer, or, as visionary thinker and transformative doer Irving Wladawsky-Berger likes to say,"essentially the senior executive responsible for helping the organization transition into the 21st century digital economy and digital society".

Do you have somebody like this in your company?