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Turning CIOs into digital heroes

Nurdianah Md Nur | Aug. 16, 2016
What do CIOs need to do to be an effective partner of business transformation?

Digital transformation (DX) is no longer just a buzzword. IDC predicts that by the end of next year, 60 percent of APAC 1000 enterprises are expected to have DX at the centre of their corporate strategy.

Despite that, the majority of organisations in the Asia Pacific excluding Japan region (APeJ) are still in the early stages of DX. According to IDC's DX MaturityScape, 45 percent of organisations in the region are in the first stage of DX maturity, which is the ad hoc level. These digital resisters are said to have digital initiatives that are disconnected, poorly aligned with enterprise strategy, and not focused on the customer experience.  

Meanwhile, a third of APeJ organisations are in the opportunistic stage of DX maturity (ie. the second level). Called digital explorers, these organisations have established basic digital capabilities but their digitally enabled customer experiences and products are inconsistent and poorly integrated, according to IDC.

The fight to lead DX

To progress to the next stage of DX maturity, most APeJ organisations (60 percent) will most likely create an independent corporate executive position to oversee DX implementation, said IDC.

There are two ways of filling the DX executive role, Sandra Ng, Group Vice President of IDC's Asia/Pacific Practice Group, told CIO Asia. "The first school of thought believes that a company should look externally to fill this role of leading DX. This executive will usually be called the Chief Digital Officer or sometimes the Chief Innovation Officer."

"However, some organisations believe that they have existing executives who are capable of leading DX. When companies follow this second school of thought, the typical favourite candidates are the Chief Marketing Officer, Chief Operating Officer, or the Chief Information Officer (CIO)," she added.

Despite being poised to lead DX, CIOs are found to be the weakest candidate. "The main reason for this is that CIOs' leading key performance indicator (KPI) is [usually] based on cost management, optimisation and productivity gains. Very few CIOs are measured based on business innovation and revenue generation, which is different from other functional roles like marketing or operations," Ng explained.

To help CIOs step up their game and be an effective partner in business transformation, IDC has developed a Leading in 3D framework. According to the framework, CIOs in future will be judged by their ability to manage three crucial dimensions on a continuous basis while anticipating the next wave of digital transformation.

The first dimension is innovate, which requires CIOs to partner the business to create digital innovations. "CIOs will need to transform their IT teams to be able to think from an innovation perspective, as well as to support and enable innovation. This requires bringing in new talents or retraining existing employees so that they can support and enable business innovation through technology," said Ng.

 

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