Over the past five years, a number of market research companies and consulting firms have been advocating that enterprises need to add a Chief Digital Officer (CDO) to their executive leadership team to guide them through the ‘digital transformation process.’ Now, we’re talking about adding another player to the table – the Chief IoT Officer.

Chief IoT or Chief Digital Officer?

Is it really necessary to expand the CXO suite again to respond to another overhyped technology trend?

Of course, we think it is exactly the right time to consider making this move or instead assign an existing executive the authority to assume this role.

Although everyone is talking about going ‘digital’ and capitalizing on the IoT, very few organizations have been able to respond to these trends because they don’t have an executive-level champion to lead the way.

It has become clear that becoming a ‘digital’ company requires a different approach to engaging with customers, partners and other stakeholders. It also requires a different set of software and organizational skills to perform this function. Wikipedia states the CDO as “not only a digital expert, but may also be a seasoned general manager. As the role frequently is transformational, CDOs generally are responsible for the adoption of digital technologies across a business.”[1]

McKinsey & Co. claims, “the CDO is now a ‘transformer in chief’, charged with coordinating and managing comprehensive changes that address everything from updating how a company works to building out entirely new businesses.”[2]

Most CIOs are trained to manage software and systems, inhouse or via third-party services like the Cloud, and are not equipped to handle the customer-facing CDO responsibilities and serve as a ‘change agent’.

So, Gartner predicted in 2012 that 25% of organizations would employ a CDO by 2015. Although many companies have added CDOs to the executive teams, the market has fallen short of Gartner’s prediction…unless you include the newest form of CDO – the Chief Data Officer.

Now, even as many organizations are still determining if they need a CDO, a new set of challenges are emerging as a result of IoT that are raising the stakes from an executive leadership standpoint.

Although the primary objective of pursuing an IoT strategy is to better understand and serve customers, the business implications go far beyond this customer-centric ideal. IoT can also help an organization become more operationally efficient, and uncover new market opportunities. As a result, the IoT can have a wider impact than the digital transformation process.

The digital transformation process is primarily focused on changing the customer experience on a human level. This changes the way the marketing and sales process and customer service and support functions operate.

IoT redefines how products and services are designed so they can capture valuable information about how customers behave. This means every corporate function from product design to customer support has to be involved in a successful IoT initiative.

CDOs can change the way businesses interact with their  customers, and CIOs can help select, implement and manage IoT solutions, but it takes a more multifaceted set of skills to identify the strategic opportunities and address the organizational challenges IoT.

Read the longer version of this article on Datamation.


[1] https://en.wikipedia.org/wiki/Chief_digital_officer

[2] http://www.mckinsey.com/business-functions/organization/our-insights/transformer-in-chief-the-new-chief-digital-officer