More companies hiring chief digital officers to oversee digital growth of business: study
Asia Pacific companies will take up such a hiring at faster pace in coming years.
Pedestrians cross a road in the central business district of Singapore. PHOTO: BLOOMBERG
SINGAPORE - More companies are hiring chief digital officers (CDOs) to oversee the digital transformation of their business, a new study has found, observing that the hype around the new position is here to stay, and that Asia Pacific companies will take up such a hiring at faster pace in coming years.
Nearly 19 per cent of the world's top 2,500 companies appointed a CDO, a number more than triple from last year's percentage, when only 6 per cent of companies analysed had hired such an executive, said Strategy&'s 2016 chief digital officer study.
Strategy&, the strategy consulting business of PwC, defined CDO as that executive, no matter of the title, who has been given the task of putting into practice the digital mission of his or her company or business unit. As much as 60 per cent of the digital leaders identified in the study were hired within the last two years across industries, company sizes, and regions.
Companies in the financial services and consumer-focused industries have the highest digital leader ratio, with 35 per cent of insurance companies having digital leaders, and 27 per cent of both banking and consumer products companies as well.
European companies were hiring them at faster rates than companies elsewhere (38 per cent in Europe versus 23 per cent in North America, 13 per cent in South and Latin America, and 7 per cent in Asia-Pacific).
Whilst the Asia Pacific numbers are comparatively lower, the regional take-up rate is expected to grow significantly as the importance of leading digital efforts in a coordinated fashion becomes increasing compelling in Asia's fast moving markets.
"Across the region, we are beginning to see a 'leap frog' to advanced digital technologies supporting omnichannel front-end to cloud based platforms," said Pierre Legrand, technology consulting Leader at PwC South East Asian Consulting. "Sponsorship and support from key C-suite executives will be required to drive a cohesive approach across their companies to achieve modern and consumer driven customer outcomes.
"We also believe that there is an even greater drive to digitise processes. A shift of attention to empower employees - with new tools such as robotic process automation (RPA) and artificial intelligence to automate commodity activities and allow humans to focus on high value customer interactions - is becoming one of the modern CDO's new focus areas."
Larger companies also continue to remain ahead of the curve in appointing digital leaders. "For a growing number of companies, it's just not feasible any longer to spread out various digital efforts among separate business units," says Mr Legrand. "It may work during early stages of digitisation, 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."
While some look externally for digital leaders, others engage existing leadership and a diverse group of stakeholders to help manage the transition. For these reasons, digital executives come in various forms, with a variety of different skills in tow. While leaders with marketing and sales backgrounds dominated last year (34 per cent and 17 per cent respectively), this year 32 per cent of digital leaders bring technology backgrounds to the job, up from 14 per cent.
Greg Unsworth, digital business leader at PwC Singapore said, "This reflects the importance of appointing the right leaders with the required governance, responsibility and authority to move the organisation as one. Parachuting in "outsiders" without sufficient institutional knowledge and influence is considered too risky by many."
* This article first appeared in The Straits Times"