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Digital Transformation and the
Chief Digital Officer (CDO) Magician for Digital Transformation or
just Corporate PR?
Helmar Hipp
8. Juni 2015
Helmar Hipp - July,11 2015 https://de.linkedin.com/in/helmarhipp
Need, Role, Tasks and Objectives
1. Trends – the business changes massively
2. Disruption in companies and the need for a CDO
3. Examples for a CDO (Chief Digital Officer)
4. Chief Digital Officer: Requirements, tasks and role in the
organisation
Disclaimer:
Presentation contains 100% text and content.
No fancy pictures for entertainment only.
Digital Transformation and the
Chief Digital Officer (CDO) – Agenda
70% of all U.S. car buyers research online, an anverage of 18 hours
per person (Polk, US) …. This goes inline with many other areas like
real estate, dating.
Digital marketing creates a survival of the fittest and fastest business
model change across almost all industries.
Retail businesses have to fight every day, every minute for new users
on search engines and in social media.
B2B und B2C companies need to in fundamentally change their
interaction with customers – driven by the principles of digital
marketing.
Companies, that do not manage DIGITAL strategically, will loose their
competitive position or may even face extinction, say 88% of the
respondents (Accenture, US, 2014)
Trends: The world changes (1)
Digital transformation has a mssive impact on all business areas.
Numerical economy shakes business foundations:
• “Acceleration of time” by algorithms, AI, software
• Networked economy
• Consumer takes the power
• Globalisation of competition and price pressure
• Marginal costs of Zero in digital / Winner takes it all – Model
• Logic of specialisation and excellence
Strategic design of all business dimensions towards the numerical economy
Even old industries recently define digital strategies:
Steel: Strtegic Goal of Klöckner & Co: 50% of all revenues will be
digital transaction in 5 years from now.
Trends: The world changes (2) – numerical
economy
Even with a revenue decline of “only” 20-30 % a business
may become extinct
Digital Transformation: How does it work?
Syste
ms G
row
th
Warning signals Emergency Development Industrialisation
Old Business
Current business
foundation
Digital: New
Business Models
(Disruption)
Adaptive Digitisation
Old Business
Phase of critical decisions/
shift of resources /
new management
Disruption
Signs of
shifting paradigms
Past I Present I Future Time
Businesses experience relevant changes and innovations in:
• Customer Experience
• Operational excellence, adaptive innovation
• Business model changes, often driven by disruptive innovation
In detail >>
Digital Transformation:
Implications in important areas
Digital Transformation: Goals and areas of change
MIT Digital Transformation Study, 2013 cited by Adjuvi LLC.
• Enterprise data and information aggregation are growing rapidly
• Technology kills first market participants (Analogy: How has the Internet changed the printing and publishing industry?)
• Focus of IT shifts from pure systems management towards
managing requirements at customer interfaces and usability
• Role and relevance of intermediaries are in decline
• Pressure on IT increases, to migrate from a cost center towards a
strategic business generator.
• More and more Digital Natives (Generation Z) in the company
• Touch UI, App Stores, Smart mobil, Cloud, Social Meda, Internet
of Things become frequently used vocabulary
Changes in businesses and early signs of
Digital Transformation
Accenture shows in reports:
• 38% der CMOs beklagen mangelhafte Beteiligung durch IT.
• 31% der CIOs sagen, Marketing sei technologisch unzureichend
versiert.
CMOs und CIOs haben immer mehr Konflikte, bei Fragen um
Gestaltung, Verantwortung (Gartner, 2014)
Es gibt sowohl zuwenig IT, als auch zu wenig Marketing Mitarbeiter,
die Digital Marketing (inkl. Tech Themen) hinreichend verstehen.
Marketing Tech wird laut Gartner ab 2017 mehr Investitionen
bedürfen als klassische IT.
Integration Tech/IT und Marketing wird “mission-critical”.
Organisational deficiencies in the era of Digital
Transformation: Clash of Marketing and IT
Companies, that reach theirs customers faster, deliver a better
customer experience and communicate better with theirs customer,
will advance in competition.
This changes businesses globally.
Dimension of
change in
companies
Success factors in Digital Transformation
People
Tech-
nology Strategy
Culture
Qualifications
Talent
MarTech
IoT
Mobile
Cloud
Business Models
Markets
Disruptors
Digital Transformation =
CEO / Executive Task & Commitment
CEO has to cover old/core business &
new business.
Need for Digital Transformation
Lead on Eexcutive Board Level
Integration of all initiatives
Digital Transformation in a CDO on Exec Level
People
Tech-
nology Strategy
Cief Digital Officer can be the driving force for change:
He hat the ability to – with a mix of experience of know-how in
technology, business building and consumer orientation – to unite
marketing and technology, and contribute on strategy definition as
well as cultural ecolution.
What percentage of companies do have a CDO
by sector?
CDO Talent Map: CDO Summit (NYC Feb 2013)
Large sectors like retail, finance, services have a backlog
• 25% of all US Large Corporates will have a CDO by 2016 CDO
(Gartner, Russell Reynolds)
• Number of CDOs in US large Corporates hat quadrupled in
2012-2014 (CDO Club)
• Examples
• Atif Rafiq, Global Digital Officer, Mc Donald´s
• Adam Brotman, CDO, Starbucks
• Charlie Redmayne, CDO Harper Collins, now CEO
More and more CDO positions defined & filled
• For businesses facing disruptive challengs (Analog to digital,
paid to free/freemium), e.g. media, publishing, …
Transformative product- and technology-know-how,
Development of Business Models, Consumer-Interfaces, Process-
and Management-Know-how for new branches >>
Online-Entrepreneuer within company
• For Consumer Goods and Services:
Online Marketing and Social Media Know-how, in conjunction
with brand management and consumer engagement.
• For e-Commerce, Online Retail, Producer with Online Sales:
E-Commerce and Transactions-Expertise: Building abd
developing reach, conversion, revenue, management of
channels, SKUs, customer journey
Skills & Know-how: What is a good CDO?
• Strategic – focused but open for change
• Execution – delivers results
• Comitted – thinking sustainable
• Deleops relationships – generates buy-in for digitale topics
• Respected leader with board, customers and has maximum
support of CEO
• People – attracts good people
• Entrepreneurial – develops new business and revenue
• Innovator – develops a transformative and disruptive vision with
the board, drives implementation
Personality: How acts a versed CDO?
Positioning of Chief Digital Officer in
Executive Management Structure
CIO Chief
Information
Officer
CMO Chief
Marketing
Officer
CDO Chief
Digital
Officer COO Chief
Operation
Officer
CEO Implementation of a
agile IT-Strategy,
Multiplatform/-device
with customer/userfocus
Build Customer-Intelligence
Optimise Usability
(Lean UX), Focus on
Conversion and Metrics
Improvement of
operational efficiency
through digital
processes (Lean Ops)
Digital Transformation
is core within strategy,
Ontop of CEO Agenda
Responsibility for
Digital Transformation
and manages digital
projects with CIO, CMO, COO
Marketing will be domintaed by online, offline will be secondary.
CMO has a focus on advertising, CDO ha sthe view on all digital
customer touchpoints (information, transaction, delivery, service….)
Holistic view of the customer journey >> possible trend towards a Chief
Customer Experience position.
CDO does not replace CIO – CIO has focus on functional technical
systems, hosting, architecture > CDO manages customer needs and
impact on all areas based on analytics
CDO may also be a Business Development oder Chief Innovation
Officer function on executive level with high strategic focus
CDO is probably a transition position until 2020, for the era until the
company has fully embraced & implemented the digital transformation.
Wired Magazine 2014, Preston Editor in Chief Information Week, Wired.com/2014.year-of-the-cdo
CDO within the Management Organisation
Chief Digital Officer Role – Modern Heptathlon
CDO
Developing Digital Marketing
Strategy
Shaping Digital User Experience
Ensuring Mult-Channel/Device
Transforms Processes
towards Digital
Implements new digital Business
Models
Recruts Digital Talent
Reports to the Board
Disruptive New Busines Models Separated Orga- New Value Chains,
Innovation Products/Services nisation and P&L, Growth,
Platforms, Netzworks M&A, PE Invest- Leading Digitale
with customers/partners ment Change
Adaptive Digital Processes & Coopertion CDO Efficiency Gain,
Innovation Internet Technology, with BUs, CMO, CIO Productivity Gain
Customer Centricity in existing
Core Business Business,
I Direct ROI
Methods Digital Methods and Tools from Silicon Valley / Start-ups
Innovation (Build Measure Learn / Fail fast, learn fast / OKR Method / Business
Canvas, Think big, act small)
Digital Transformation: Goals & Implementation
Development Implementation Result
Innovation and delivering Value for customers and partners
Helmar Hipp
+49-175-1818808
https://de.linkedin.com/in/helmarhipp
Over 15 years in management positions in digital and internet sector
Managed digital transformation successfully and built digital business
in several sectors
M&A, Venture Capital and PE experience from over 60 transactions
Contact details
