Originally, we knew the CEO (Chief Executive Officer), CFO (Chief Financial Officer) and CTO (Chief Technical Officer). As the CXO concept worked well and was widely adopted even in non-English speaking countries, we saw the CMO (Marketing), the COO (Operations), the CIO (Information) flourish. More recently, the CDO (Chief Digital Officer) arrived.
In many cases, he is responsible for the process of digitizing a company.
But is its presence a guarantee of success? Do you really need a CDO to complete a digital transformation?
I have already mentioned that the digitization of a utility can not come down to a WEB site or to digital invoices. Rather, it is a process of global transformation that is gradually affecting in particular the internal operating processes, the relationship with customers, the way in which the utility conducts its operations and interacts with its environment. This is the complete transformation of a business over a long period.
The digital transformation of a utility is not the adoption or further development of digital technologies. These technologies often develop spontaneously. Rather, it is the management of the consequences of the invasion of these technologies and of the resulting creation of value.
An easy access to data and knowledge changes a lot: for energy-consuming customers, for each link in the value chain, for the management of utilities. Value creation is now accessible to many “outside” providers, not belonging to traditional value chains.
The presence of a CDO within an organization may reveal an excellent understanding of the stakes by the General Management. It can also be a lure for observers, to mask the lack of understanding or appropriation of the stakes. It can not therefore guarantee that the utility’s transformation is in progress or to come.
In this respect, I observe quite regularly the following points:
- A CDO must report to the CEO; it is an almost essential condition for digitization to be a true transformation. Otherwise, the CDO often reports to the CIO; this positioning in the company reflects a too narrow conception of digitization, seen as a form of computerization.
- The CDO is not a CIO in charge of investment and control of the OPEX. Because digitization seen as the purchase of the necessary equipment can prove to be of little consequence.
A CDO reporting to the CEO brings several benefits:
- Through its continued presence within the General Management, it can more easily integrate digitization into the company’s strategy.
- It can also share a diagnosis, vision, plan of action, very useful for the “alignment” of an organization during a transformation.
- It can ensure the consistency of the various initiatives carried out in the company: digitization very often involves transverse processes that organizations traditionally designed as independent silos have some difficulties to carry out.
- It can stimulate a global dynamic, avoiding certain parts of the company falling behind in the transformation.
However, a CDO is not enough. Relays in the main businesses and departments are essential to relay and develop efforts and actions in existing organizations, because it is well, in the long term, the whole company and all the energy systems that must be digitized.
The CDO is then a conductor, both strategic and operational, with an aim on the company and on all its relations with its environment.
Few utilities have appointed a CDO. This should not reflect less exposure of the energy sector to digital technologies. On the contrary, digital technologies are likely to be of great support for utilities facing the turmoil in their market. Their digital transformation is certainly at the heart of their stakes. Will they be able to perceive it quickly and put themselves in running order to transform themselves?