The CDO’s top ask: An ecosystem that DELIVERS.
I am starting with a story from the 90s. Bear with me for not only is it interesting, but it also has a context for our friend, the Chief Digital Officer (CDO).
Around 1996 when credit cards exploded into the market amidst the expected initial chaos, the systems were primitive. Merchant-signing banks accepted transactions from all banks, reimbursing themselves by drawing a draft on the issuing banks through the Federal Reserve System. While the merchant banks sent them through the U.S. postal system, the clearing draft was posted to a suspense ledger. And this was merely half of the entire complicated, siloed process!
Naturally, the credit scene suffered from many unprocessed transactions and criminal activities. Until Dee Hock, a bank official organizing regional committees to address this created what became the ubiquitous credit card company, Visa™. His approach was simple: a mindset change from passive subject to the deliberate architect of a holistic banking ecosystem, which ultimately enabled credit cards to take flight. Hock realized early on the need for a self-serving networked organization that would organize, evolve, and invent itself, and creates what is today the credit card ecosystem.
Every revolution needs an ecosystem to make it happen. Industry 4.0 needs a strong ecosystem of manufacturers, ancillaries, and digital enablers like robots, and another deep tech to deliver. The IT revolution of yesterday needed an ecosystem of software products, hardware products, software service providers, engineering colleges, entrepreneurs, and more. Cut to today’s digital revolution: a fully functional, developed digital ecosystem inside and outside the organization is the need of the hour, with the Chief Digital Officer (CDO) at the center of it.
What is a Digital Ecosystem?
A digital ecosystem consists of:
- Chief Digital Officer + team; Chief Information Officer + team & Chief Business/Product Officer + team
- Technology/software service providers
- Management consultants
- Senior leadership and Board
- Finally, the customer
Each of the teams and individuals involved is allotted different and specific tasks. But their end goal is the same – to make digital transformation happen, in line with the business goals.
Challenges of A Digital Ecosystem
The ‘digital culture’, promoted by the CDO and his team is still a work in progress. Becoming a worthy ally to the CIO and his team, who is the primary client of the software or technology service providers, is still a challenge. Getting software service providers and management consultants aligned to the data monetization vision has not been simple either. And there is always the concern of a buy-in from the senior leadership, the Board, and of course, the customer.
Organizations often end up giving more importance to team enhancement than team building. Whereas a small yet cohesive, engaged, and motivated team committed to data monetization is far more effective than a large group of diverse roles with no real connection. Let us take the example of a Fortune 100 insurance company. Digital transformation and data monetization were key goals. Huge teams were formed with a lot of leadership hiring as well. But, due to a lack of focus and too many projects with little cohesion, the output was limited to more overheads than any real execution. Significant restructuring and formation of a small team under an able CDO later, the first big idea and success came about. Risk assessment was a capability honed over years with thousands of enterprise clients. So far, this capability was merely an enabler for their core offering i.e. insurance. But thanks to the data monetization mindset, the big idea emerged: what if risk assessment itself is sold as a service to enterprise clients? Who better than an insurance company, the real risk assessment expert, to offer this crucial service? And the ecosystem made the execution happen. With continuous learning & improvement, collaboration, and consistent delivery.
Now, the role of the CDO is still expanding and fluid. Therefore, its function and placement in the ecosystem are yet to be clearly defined. But the goal is clear – data monetization is built upon a data-first or digital-first culture. The CDO’s team must make this happen with a mix of ideation, identification, strategy, planning, and pilot projects. The CIO and team must enable this with IT infrastructure that is productive and efficient. Technology/software service providers must support digital transformation with full support to the CDO through solutions around supply chain, CRM, sales, training, finance, and more. Management consultants need to step up with developing digital strategies, business mapping, and rethinking revenue streams using digital. The senior leadership and the Board must act as advisors, and executive sponsors and promote culture building. And last but not the least, the customers are the ultimate partners in the true sense.