"Digitisation is a matter for the boss" - That is why it is only logical that digitisation is firmly anchored in the area of management. Today, it is clear to all companies, that they are affected by digitalisation in one way or another and have to deal with it. How However, how the associated change is organised in practice depends very much on the respective company. That is why companies are increasingly asking themselves which functions should best represent digitalisation at the executive level. What role do CIO, CTO or the Chief Data Officer? To provide more clarity, we have taken a closer look at these roles and functions.
Link Tip: In our blog post on Data governance we deal with the question of data management in companies in general.
The CIO - Chief Information Officer
The Chief Information Officer or CIO deals centrally with all relevant Information Technologies and the optimisation of all related processes. However, the function of IT in companies has changed completely in recent years. For a long time now, the IT infrastructure has no longer been just a small area running in the background. Rather, IT has become an essential part of the work in all areas and an Drivers of digitalisation become.
Increasingly, it is even the case that the development of IT structures is synonymous with the development of new business areas. The ability to develop innovation and new products also depends heavily on the degree of expansion and use of information technologies. According to a current study In 42 per cent of cases, the CIO is responsible for creating the digitalisation strategy, and 66 per cent are responsible for its implementation. In addition, cybersecurity is considered another important topic for the CIO. Since IT has also become a central cost factor, financial topics or corporate financing play an important role - reason enough to have a CIO at management level.
The CTO - Chief Technology Officer
The tasks and competences of CIO and CTO overlap to some extent. The two functions cannot be clearly distinguished from each other. Even more than with the CIO, the Chief Technology Officer technological aspects in the centre - both in terms of the infrastructure in the company and the know-how and knowledge of the employees. However, the CTO considers and evaluates the latest technology trends always in terms of their strategic importance for their own company.
One of the most important skills of the CTO is therefore to think unconventionally or to think outside the box. Communication skills in particular are another important characteristic of the CTO. He or she deals with employees from many departments, brings them together and triggers change. Like CIOs, however, CTOs can also be responsible for managing technical infrastructure, cybersecurity and innovation.
The CDO - Chief Digital Officer
About the Chief Digital Officer will be a challenge in view of the big issue of digital transformation written much more frequently than others. Studies show, however, that this function is only slowly gaining a foothold in German companies and that its distribution is very irregular. Especially in large corporations such as DAX companies, it is most common with 40%.
In the study already mentioned above, which deals with the question of the creation and responsibility of the digitalisation strategy, the CDO is also attested a subordinate role in this respect. In only 4 percent of the cases is he responsible for the creation and in 28 percent for the implementation of the digitisation strategy. In addition, the CDO's areas of responsibility overlap with those of others at the management level and cannot always be clearly delineated. However, the strategic tasks of the CDO are always focused on the Digitisation of the company aligned.
The CDO examines, develops and realises digitisation-related new Business models. At the same time, it reviews the existing business models and, if necessary, adapts them to new framework conditions. To fulfil this task, the CDO needs a number of core competencies.
A CDO must be aware of all the latest technological trends and anticipate some of them. He must know what relevance, for example, AI, ChatbotsRFID, NFC or the Blockchain for their own business model. Innovation and change processes determined the CDO's daily work.
The CDO - Chief Data Officer
The Chief Data Officer is a comparatively recent phenomenon. In 2006, such a position was created for the first time at a financial company in the C-level area. The growing awareness of the central importance of data for companies explains the now very lively interest in the CDO.
Gartner even assumes that by 2019, 90% of all large companies will have a Chief Data Officer. According to one estimate, there were just 1,000 worldwide in 2016. A CDO is responsible for all processes related to data acquisition and data processing. He or she thus plays a key role in digitalisation.
At the moment, the CDO responsible for data is most common in the Anglo-American world. The identical abbreviation for Chief Digital Officer and Chief Data Officer as CDO sometimes causes confusion. In rare cases, one also finds the designation Chief Analytics Officer.
What is clear in any case is that data now plays a central role in all areas of a company, and thus also the Importance of the Chief Data Officer will become increasingly important. A regular survey of Fortune 1000 companies found that in 2012, only 12 % had a CDO. In 2018, 63 % already had a Chief Data Officer. Their central tasks are:
- Advise senior management on all processes related to data.
- A comprehensive Data or information strategy and a Data management strategy to develop and establish it in the company
- Initiate and promote data science and advanced analytics projects
- Wherever it is possible to integrate data into the value chain
- Ensuring a high Data quality throughout the company
In some companies, the head of data is only located at the department head level. But there he or she does not have the necessary clout. Sometimes existing business models have to be questioned and completely reorganised. Such far-reaching consequences can only be enforced by someone who is based on Management level acts.
CDO, CIO or CTO - Which roles need to be anchored at board level?
According to Industry association Bitkom in 2016, just 2% of companies with more than 500 employees in Germany had a Chief Digital Officer. Due to the partially overlapping areas of responsibility of the CDO, CIO, CTO and Chief Data Officer, there can also be competitive thinking at the management level.
In addition, many companies still have an unclear picture of which specific functions are to be carried out by the respective positions in management. This leads to misleading job advertisements or appointments that do not lead to the hoped-for success. One solution in this situation is to combine several functions in one person: Chief Information Officer and Chief Data Officer at the same time.
In the face of an increasingly complex situation - GDPR, increasing competition from large corporations such as Facebook, Amazon and Google or exponential data growth & networking - it is absolutely essential the Anchor digitalisation at the management level.
Transformation processes successful to design and Data as a central asset assessable and The ability to handle data in the right way can be decisive for the economic success of companies in the future. That is why it will be exciting to see how the roles of CDO, CIO, CTO and, last but not least, Chief Data Officer will develop in the future.