Companies without a dedicated leader of digital transformation may lose competitive advantage

London, December 14, 2015 - Only 6% of the world’s top 1500 companies have appointed a chief digital officer (CDO) to oversee the digital transformation of their business, according to a new study from PwC’s strategy consulting business, Strategy&. The 2015 Chief Digital Officer Study examined the world’s top 1500 public and private companies by revenue to determine how many have appointed a chief digital officer to plan and oversee the organisation’s digital transformation.

The numbers of CDOs are increasing, with UK companies leading the field, however the Strategy& report warns that most organisations are still not embracing the chief digital officer quickly enough, despite the huge focus on digitisation. The report findings include:

  • Larger companies are ahead of the curve in appointing CDOs. The proportion of companies with more than 10,000 employees that have appointed CDOs hovers between 5% and 9%, but falls to 1 - 3% for companies with fewer employees;
  • Consumer oriented companies including media and entertainment (13%), food and beverage (11%), and consumer products (9%) are most likely to have a CDO in place;
  • European companies are hiring CDOs at faster rates than companies elsewhere: 13% in Europe versus 7% in North America, 5% in South and Latin America, 3% in Asia-Pacific and 2% in the Middle East and Africa.

Of the 86 CDOs the study identified, 31 were appointed just last year, suggesting a realisation amongst top companies that a dedicated digital leader is needed to drive and transform the business into a fully digital enterprise.

Ashley Unwin, head of UK and EMEA Consulting at PwC, says that in a digital world, organisations need to ask themselves why they wouldn’t have a CDO.

“Whilst we haven’t yet witnessed the rise of a European Google, it is encouraging to see major European businesses lead the way in creating senior roles solely focused on digital transformation.”

“Ultimately, the goal of every chief digital officer is to ingrain a digital agenda so deeply into the organisation that it becomes the way of life for everyone.”

“Once digitisation is firmly entrenched in the companies' everyday operations, the question then becomes whether the role is needed anymore – but that day is still a long way off.”

For companies that have appointed a chief digital officer, over 80% have been hired since 2012 and 40% are members of the C-suite (having the designation of “chief officer”). The study says that this suggests the role of the C-suite is being redefined, with many CDOs coming from a variety of backgrounds, the most common being marketing (34%), followed by sales (17%) and technology (14%).

“The chief digital officer role is new and relatively undefined, coming about under very different circumstances than other C-level positions like the CIO and the CMO,” says Martin Roets, a London-based principal at Strategy&.”

“The CDO’s job is to steer the company through an era of mass disruption in every aspect of its external relationships and internal operations.”

“This is an immense challenge, but as the roles become more defined and successes emerge, the concept of the CDO will move rapidly from the large global undertakings to the SME sector.”

Since a digital leader’s role is by definition transformational, CDOs who can adapt to their rapidly changing circumstances while staying tightly aligned to their company's business goals will be best positioned to succeed.

Ashley Unwin warns that companies, regardless of size, must develop and implement a cohesive digital approach that aligns their current position and future strategy in a way that provides real value to the customer.

“Companies competing internationally must do more than simply align technology with existing business goals. Digital is all-encompassing and has the power to transform every aspect of the business, including the business goals themselves.”

“So it’s incumbent on companies to appoint CDOs who proactively help to drive the creation of business strategy - and lead that process if necessary.”

“Consequently, successful CDOs will be a source of significant competitive advantage for European business as they drive change and lead innovation.”

Contact Martina Mazzon
Telephone: +44 20 7393 3251
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