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What does the role of CDO mean for channel companies?

Chief digital officers may hold the keys to many of your customers' decisions, and, just as importantly, to your own company's evolution.

As channel companies evaluate trends in technology and identify key players within an organization who can influence decisions affecting their projects, it might be time to think about how the role of the chief digital officer will impact digital transformation engagements across a company's business operations.

Although the role of CDO is not ubiquitous across corporations, government entities, nonprofit organizations, or small and medium-sized businesses, the recently published Harvey Nash/KPMG CIO Survey shows that the number of CDOs is growing and their influence is increasing.

Conducted between December 12, 2015, and April 10, 2016, across 82 countries, the survey found that one in five companies now employ a CDO, almost tripling the number since 2014.  Among the 3,352 CIOs and technology leaders polled, 46% said CDOs are twice as likely to report to CEOs as to CIOs (21%). This is important when considering that respondents also said the CEO is most likely to "own" digital (21%), and IT (16%) is almost twice as likely to "own" digital as their marketing peers (9%).

According to PwC Strategy&, a PwC firm, a CDO is responsible for defining the company's digital strategy and executing its cross-functional transformation into a fully digital enterprise.

The role of CDO at Logicalis

Chris Gabriel, CDO, Logicalis EuropeChris Gabriel

Chris Gabriel, CDO at Logicalis Europe, an international IT solutions and managed services provider, said a CDO is as much a visionary as a disrupter who is thinking several years ahead about how new technologies will transform businesses and the platforms they operate on.

"I think that the channel is set for a fair amount of disruption over the next few years, and my job is to think about how that is going to happen to us before it just happens," Gabriel said.

He added that a CDO's responsibility is to create a digital business that centers on experiences, processes and platforms.

"A CDO has to develop a digital business that generates revenue streams from those experiences, processes and platforms, because it disrupts the experience a customer has, it disrupts the way that traditional services have been delivered in the past by using manual business processes, and it uses digital platforms to do that," Gabriel said.

He noted that his job is to envision what the market will look like over the next three to five years as cloud technology, automation of business processes, the internet of things (IoT) and blockchain technology disrupt business operations.

"The way I look at my role is I'm here to create digital symmetry," Gabriel said. "I can go and talk to the CDO at a company and give them some great ideas about IoT and talk to them about consumer experiences, but to make that happen, someone has got to run IT in a different way to deliver all the things that the CDO wants to do."

In addition to engaging with his counterpart and line-of-business managers at customer sites, Gabriel said he has to be the modernizing agent for the CIO.

"I have to let the CIO know that I can see the second to third platform that they'll need in a few years' time, and I have to tell them what they will need to do to transition from that second to third platform for their business," he said.

The challenges involved

Gabriel was promoted from chief technology officer to the role of CDO nine months ago and is Logicalis' first CDO. One of the challenges of the job, he said, is trying to strike a balance between disruption and operational modernization, which involves thinking about how his company will fit into the managed service marketplace and what that will look like in the next three years. For customers, he thinks about their future demands and asks them what think they will need for future growth as they seek to obtain more value from their investments, he said.

As CDO, Gabriel has also found that he has struck a new conversation with original equipment manufacturers (OEMs) that typically discuss with partners the development of new technology. In the past, the discussion also centered on the OEM sharing with the partner what partner program they'll fall into and what specifications are required for partners to sell OEM products to customers.

"It's very difficult to step out of that and challenge OEMs in terms of how we at Logicalis think they need to work differently. I'll mention no names, but when you talk to the OEMs about their cloud strategy, for example, they'll tell you how they want to engage with customers and what they want to put in place for the channel. As a CDO, my challenge … is to tell them they keep repeating the same thing and actually what we end up with is always less tangible results for the customer because no one is thinking about the long-term outcome of the customer's business. I tell OEMs, 'Don't give me the traditional channel program; we need to do something different,'" Gabriel said.

Requirements for digital business transformation

Roman Friedrich, partner, PwC Strategy&Roman Friedrich

As IT solution providers think about having a CDO at their own company or how they can best work with a client's CDO on digital implementation projects, digital transformation at a company 10 years and older can be difficult to do, said Roman Friedrich, partner at PwC's Strategy&.

For one thing, CDOs are struggling to hire and retain people that can work on their digital projects. Additionally, many companies, particularly large enterprises in sectors such as telecommunications or financial institutions, are structured in an operating model in which several of their business operations run on manual business processes and legacy systems, Friedrich said.

He added that many companies are organized to work and collaborate in a way that lends itself to supporting a culture of work that is hard to change.

"If companies don't change the way they organize their business processes and the way they function, if they don't empower people in decision-making and change how they measure their success, they will lock themselves into the traditional old world," Friedrich said. "The operation model change is at least as important as having the right people in place. If you put the right people in place and you have the wrong operating model, you won't get the benefit of the confidence you will need when you embark on a digital transformation strategy. You'll be destroyed."

Friedrich also said every company that wants to be a completely digital business must do the following:

  1. Have digitized customer interactions;
  2. Have automated business processes;
  3. Collect data in specific areas, whether it be data on customer processes or an internal business process;
  4. Find out what business insights the data presents and how you can apply those insights to digital processes that will improve customer interactions or internal business processes; and
  5. Use that data to disrupt your own business model.

Becoming a valuable partner to CDOs

John Gorup, director of content, AppirioJohn Gorup

As more established companies are threatened by fully digital startups -- for example, the disruption Uber has caused to the taxi industry or AirBnB's disruption of the hospitality industry -- channel partners need to prepare for the increasing number of CDOs that companies will hire in the near future, said John Gorup, director of content at Appirio, a cloud solution provider headquartered in Indianapolis, Ind.

He also said CDOs require more than technical acumen; the role of CDO calls for a person who can understand business strategy as well as branding, customer experience and worker experience.

The channel partners that will be successful will engage with CDOs to help them educate their organizations [and] to help them understand that digital business is a more holistic change involving every business unit in a company.
John Gorupdirector of content, Appirio

He added that channel partners need to align their sales efforts with a CDO's particular agenda, which is something that will pose a challenge for most sales teams.

"The reason why this is hard is that while all CDOs face the same general challenges, they each face critical challenges that are unique to them. Each CDO has to rethink their company's strategy based on their industry, their brand, their internal capabilities and their target customers," Gorup said.

He added that CDOs need engagement and support from channel partners because it's a position that's inherently set up for disappointment.

"The temptation for business stakeholders is to see a digital transformation as bolting on a smartphone app to a traditional business," Gorup said. "The channel partners that will be successful will engage with CDOs to help them educate their organizations [and] to help them understand that digital business is a more holistic change involving every business unit in a company."

With these challenges in mind, Gorup said the good news is there are many ways a channel partner can become valuable to a CDO.

"Providing good services and products is a table stake for channel partners. However, partners that distinguish themselves will help CDOs through thought leadership, building communities for CDOs to share best practices and ideas, and providing case studies on how successful CDOs navigate the job," Gorup said.

"One of the CDO's biggest challenges is facilitating bidirectional communication with their customer communities. Channel partners need to step up to give guidance on how this can successfully be done."

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