Although success with digital transformation still eludes many organizations, a growing number of firms are embracing the strategy and are assigning a chief digital officer to lead the effort, according to Strategy&, PwC’s strategy consulting business, which recently released its Global Chief Digital Officer Study.
The increase in the number of digital leaders highlights that companies are making a concerted effort toward becoming a more digital organization, and having someone lead that effort is imperative, the study says. This trend is believed to be due to the fact that companies continue to face shifting challenges and have to adapt to changes within the organizational structure.
“For a growing number of companies, it’s just not feasible any longer to spread out various digital efforts among separate business units,” says Pierre Peladeau, a leading digital practitioner and study co-author with Strategy&, partner with PwC France. “It may work during early stages of digitalization, but as a company moves towards a more advanced stage of digital maturity, a unified approach is needed to execute a more comprehensive digital strategy.”
Of the 2,500 organizations studied by PwC, 19 percent have appointed an executive to oversee the digital transformation of their business. Also, 38 percent of organizations in EMEA and 23 percent of the companies in North America have a CDO. Of all CDOs identified, 60 percent were hired in 2015 and 2016. Although these numbers might seem rather modest, it has more than tripled since last year, when only 6 percent of organizations had hired a CDO, the study reveals.
Organizations in the financial services and consumer-focused industries have a higher ratio of digital leaders. According to the study, 35 percent of insurance companies have digital leaders, with banking and consumer services companies coming in at a ratio of 27 percent apiece.
Additionally, European companies appear to be ahead of the pack when it comes to hiring digital leaders. The ratios by continent are 38 percent in Europe, 23 percent in North America, 13 percent in South and Latin America, and 7 percent in Asia.
“The CDO’s role, by definition, is transformational,” says Olaf Acker, co-author and digital services leader with PwC Strategy& Germany. “Which means that anyone assuming the role has to balance the old technologies with the new; technical expertise with an understanding of internal organizational mechanisms; and a vision for a company’s future that also aligns with its longstanding mission.”