The Missing Link in Digital Transformation: The Chief Digital Officer (CDO)

Posted by Jason Kasper on Tue, May 31, 2016 @ 10:00 AM

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As Digital Transformation becomes the predominate term to mean all things Industrial Internet of Things (IIoT), Industry 4.0, and IT/OT convergence, we are increasingly seeing the role of Chief Digital Officer (CDO) come to the forefront to help organizations bridge the gap between the COO and CIO.

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Originally, the CDO role was created to take control of social media and related applications to develop social strategies for brand loyalty and influence within social networks like Facebook, Twitter, and LinkedIn. Now with the promise of IIoT, Industry 4.0 and the convergence of IT/OT, we see an increase in the use of the CDO role to support organizations looking to apply technologies to process, batch, and discrete manufacturing operations in order to drive growth.

This Sounds Like a Job for the CIO!

For an enterprise to effectively pursue Digital Transformation, all departments of the business must for once and for all break down the walls between the siloes in their organization. For the last several years much of the discussion has been about information (IT) versus operational technology (OT). As this discussion has evolved, it has typically been viewed and assumed that the CIO inherit the responsibility.

This is a flawed plan as organizations are essentially adding more work to a job role that is overworked and under budgeted already. The other missing piece it there is a requirement to understand the operations of a business, often a capability lacking in the CIO for now other reason that they don’t have time to learn it. This is where the emphasis and new job role of CDO becomes key. Having skills sets in both areas will create the most value to any organization looking to move forward with any initiative around Digital Transformation.

Where to Start? How about Plant Security

The CDO should start with areas that have been lacking, a major one from our LNS Survey points to security measures in the plant. This is ripe for Digital Transformation. Looking at Figure 1, you can see there is a wide disparately to what is viewed as security in a manufacturing plant. This can be attributed to how systems and processes are implemented over time and the lack of IT processes on the OT side of the business.jason2-1.png

Security evolves quickly and the plant should be flexible enough to keep up. This is a silo between IT and OT that needs to be broken down quickly and the CDO with both and operations and IT background can help.

There Will be Infighting with the CIO

LNS Research often hears of issues of infighting with the CIO when the CDO role is developed. This is mainly attributed to who is ultimately responsible for the system selection, implementation and maintaining the uptime.

Working out a Digitally Transformed security program will be a tough slog. Looking at some specific research about the role responsible for security, more often than not it is the IT department. It will be a sensitive issue to transform the security situation in Figure 1, which most likely was developed with low priority to other business requirements, to one that is best in class.jason1-1.png

The best way forward for the CDO is to be the go between on the needs of operations and the constraints of the CIO. The IT Department has made decisions on security and standardized it for most of the business already; beware of offering a new widget to solve the problems in the plant and be receptive to options that may have been selected already. Eventually, a mutual understanding of issues will take shape and the silos will be broken.

Moving Forward, the CDO Role Will be Common Place

As the CIO role went through trials and tribulations more than 20-30 years ago, the same will go for the CDO. Some organizations will add the “D” to the CIO for a Chief Digital Information Officer, we believe this will have less success as the focus and experience will not be there.

Success will come from those who add the CDO role, and give the clear marching orders on Digital Transformation decisions will have the most success. Focusing first on security should be the fastest way to break down the IT/OT silos and protect operations of a critical flaw that exists today.

Access this NEW eBook, "Manufacturing Metrics in an IoT World: Measuring the Progress of the Industrial Internet of Things," presents results from the fourth iteration of the biennial Metrics that Matter research study conducted between LNS Research and MESA International. It places particular focus on what IIoT means to manufacturers in the MOM space. New Call-to-action

Tags: Internet of Things, IIoT, Digital Transformation