Rise of the CDO: The Great Mediator

Hannah Datz, VP Retail North America, SAP Hybris
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Hannah Datz, VP Retail North America, SAP Hybris

Every two years a new turn of phrase in retail tech becomes the hot button. Recent examples include “omni-channel,” “360-degree customer,” and “real-time.” As each has risen and declined in popular use, the constant among these buzzwords is the challenge for organizations to truly define what they mean to their business. Take the newest hot word: digital.

  â€‹Digital Officers In The Retail Space Are Gaining More Power And Access To Ceos Than Ever   

The definition of digital isn’t constant: ask the CMO what digital means to retail business, versus the CIO or the CFO, and you’re likely to get three very different perspectives. Digital is everything—in its most common form it’s a retailer’s sales channel, often enabled by a commerce solution, and accessible through any device. In a more nuanced form, digital is the connection of the physical store to the online experience, driven by truly understanding the consumer throughout their entire brand experience. Still, a different twist is the concept of digital business as a whole. The digital definition for most visionary CEOs goes beyond a sales channel, and outlines how enterprises run—with the ability to make split-second decisions, driven by automation and artificial intelligence, reducing time to market in every line of business, from finance to customer service. Unlike the trendy words before it, the digital craze has given way to a new kind of a leader, one who has been tasked with making sense of these varying perspectives, and ultimately, unifying the organization under a common understanding.

Enter, the Chief Digital Officer

A new type of executive responsible for turning a buzzword into a business strategy. Digital officers in the retail space are gaining more power and access to CEOs than ever. The way a company defines digital can impact where the CDO sits within an organization, and her core responsibility.

Many world-class organizations SAP works with are structured with the CDO reporting to the CIO, and the CDO is responsible for driving the front office's core technology, in accordance with the platforms and investments that are in place today. Still, other successful retailers use the CDO as an underling of the CMO, to help bring a technical, analytical perspective to the marketing organization, as marketers gain more power and larger budgets to make technology decisions.

Most interesting are the companies that are trending toward something new, where the CDO either reports directly to the CEO between these two organizations or actually owns the technical line of business. In this model, the digital officer owns the entire technology portfolio, leaving the CIO to care for the core, back-end systems that make the company run. Organizations that opt for this model are saying something interesting about their business—that technology needs to be a revenue generator first, rather than a cost center. While CIOs in this model support the cost of running the company, the CDOs will have their own teams working on how technology can actually help the bottom line. In other words, retailers are placing much more accountability around technology than ever before.

What impact does this model have for employees at large? It bridges the talent gap between technology-minded leaders and brand leaders, for the good of consumers. Take most organizations, whose CIO and CMO live independently. The need for IT and marketing to work more closely is everprevalant due to customer expectations blending the two–consumers expect a strong brand experience, but also one that meets their need for intuitive interfaces and rapid response times. In the organizations that are able to foster harmony between the CIO and CMO, customer expectations can be met. But in the lower levels of many organizations, there is often a power struggle between the need for marketing-friendly solutions and the demand for a platform than can expand easily with changing business models. The good news is that this shouldn’t be a choice, and for many of our customers, it isn’t. Yet, the organizational struggle exists.

The Digital Office is the Perfect Answer

One leader tasked with bringing these two groups together in harmony. And given the CDOs’ ability to expand beyond technical into a profit center business model, they are rising in organizations all over the world.

What does this organizational shift mean for consumers? In short, more opportunities for consumers to interact with the brand and make purchases. The retail world is ever-dependant on quick movement of goods, personalization and lightning fast reaction times in customer service. Because of that, retail marketers are more engaged than ever with the individual consumer’s wants and needs. Gone are the “Mad Men” days of high advertising budgets with no way to measure success. Marketers are data savvy, quick to react to that data, and are true impactors to the bottom line. Enabled with the right technology platform, consumers reap the benefits of that knowledge.

When retailers aren’t equipped, they lose. For example, the coat that your shopper clicked on her Facebook feed three weeks ago was not displayed as the spotlight item on your commerce site. Or, the pants she tried on in-store went on sale and she never knew about it, despite the fact that you were overstocked. In this new organizational structure under the CDO, unifying the marketing complexities with technology and automation, companies are open to every possible purchase by the consumer, because marketing is enabled with the right technology, and the technology people understand the needs of marketing. The CDO unifies and mediates.

As Chief Digital Officers continue to prove their worth, and their ability to unite brand with tech to drive profit, they will continue to become more valuable to retail CEOs. While the digital term that gave them a rise to power may be a fad, their value in the organization is likely to increase.

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