The rise of chief digital officers

The rise of chief digital officers

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A new position is emerging in the top corporate hierarchy and he or she will lead the company to the digital age. Chief digital officers are now considered crucial roles in telecommunication companies, and it would not be long before other sectors also appoint similar positions in their management…

A new position is emerging in the top corporate hierarchy and he or she will lead the company to the digital age.

Chief digital officers are now considered crucial roles in telecommunication companies, and it would not be long before other sectors also appoint similar positions in their management.

Abhay Kumar, the regional vice president for Asia Pacific of global software company Amdocs, believes that chief digital officers or CDOs will drive the growth of industries.

A CDO is a top executive who guides the company’s or organization’s digital transformation and oversees operations in the rapidly changing digital sectors such as as mobile applications, social media and electronic commerce.

“We believe in the importance of an emerging role called chief digital officer. This person is going to lead the digital strategy for the [telecom] operators,” Kumar says in a news briefing at Discovery Primea in Makati City.

Kumar speaks on behalf of Amdocs, which provides software solutions and services for communications, entertainment and media service providers.

Amdocs regional vice president for Asia Pacific Abhay Kumar

He cites the results of a global survey conducted for Amdocs by research firm IDC, showing that 90 percent of operators in Asia Pacific recognize the importance of having a chief digital officer to lead and drive transformation strategy.

The same survey, however, shows that only 29 percent of the telecom companies have appointed CDOs so far.

“They want it, but they don’t have it,” says Kumar, in explaining the companies piecemeal approach in their digital strategy.

Kumar says a CDO is somebody who understands what is needed to be taken and who drives the execution of the digital strategy. “It is a cross between the CEO [chief executive officer], the CMO [chief marketing officer] and the CIO [chief information officer]. It is somebody who looks at the technology dimension and is able to bridge that gap. It is a very critical function,” says Kumar.

“You have a very strong management person, and a very strong technology person, and they have to get together in one body, and that’s what works. Only 29 percent of operators believe that they have the person,” he says.

Kumar says the CDO’s main role is the digital transformation of telecom companies. The IDC survey shows that service providers in Asia Pacific believe they are not transforming fast enough to meet the demands of today’s digital era.

According to the survey, 47 percent of local C-level and other service provider decision makers predict that it will take their companies more than five years to transform. This is not fast enough according to 76 percent of respondents who believe that the communications industry will be outpaced by other industries.

Kumar says among the factors is the lack of holistic approach, as telco operators take piecemeal strategies. “When you want to offer digital transformation or digital experience to customers, you need to have the ability to look at all the systems that exist in the organization and provide a single, unified view,” he says.

Many operators in the Asia-Pacific region are still in legacy platforms, he says. The Philippines is a little quicker to adopt digital transformation compared to other countries, as operators catch up with the demand of tech-savvy Filipino subscribers, who are actively engaged in social media, he says.

Kumar says in the Philippines, operators are in different stages of transformation. “I think they have taken piecemeal approach so far, but they are seriously looking, talking about digital right now. They are talking about the big play, so I think they have just started how to go about it, and how to go down that path, but they have not started on the embarkation yet,” he says.

“The advantage of the Philippines is that if you look over the years, the subscribers have become pretty advanced in terms of digital, the way they use smartphones, the way they use e-commerce. You and I as subscribers are going to demand more. For me [if I were a CEO], I will say let us create a wrapper sooner than later, so that the subscribers will feel a little more comfortable with the service they are getting. I think the journey has started,” says Kumar.

He says it is important for operators to create a holistic digital strategy, look at the big picture and see how to change the whole market.

According to the IDC survey, 33 percent of service providers in Asia Pacific still do not have a digital strategy in place.

Around 85 percent of the industry is still executing digital transformation projects as stand-alone initiatives without alignment to a broader technology roadmap or business strategy.

Results also show that 67 percent of respondents in Asia Pacific believe that the communications industry has strong technology capabilities but will find it difficult to implement and bring to market digital transformation projects quickly enough.

When asked what factor would most help their companies transform into digital service providers, having the right skills to create and implement digital transformation strategies were ranked first and second; the use of customer experience as a design principle for new products and services was the third most helpful factor. All of these were well ahead of having the necessary financial capital, which ranked sixth.

The study suggests that to deploy new digital capabilities and accelerate the pace of digital transformation, service providers are looking to share the challenge with partners.

In the next 12 months, 43 percent of respondents say they will invest in managed services as part of their transformation in order to enable solutions for new areas. In general, IT services vendors are ranked as the most valuable partners for the execution of digital transformation projects, ahead of specialist digital consultants. Systems integrators ranked third together with third-party players specializing in standalone digital solutions. Strategy consultants ranked fourth together with managed services vendors and network equipment vendors ranked fifth.

“The majority of service providers today are actively working to deploy digital technologies to improve their businesses, but this is happening without a unifying top-level vision and strategy. They are also telling us they are struggling to re-align processes and re-train staff at the same time, further delaying real business outcomes,” says Andy Hicks, research director for telecoms and networking at IDC. “They may be able to keep up with other service providers, but they don’t think they can keep up in the broader digital world unless they address gaps in digital strategy, skills and leadership. Our research suggests they will source professional services to bridge some of these gaps.”

Kumar says digital transformation is a critical enabler for capturing digital age opportunities and delivering a new world of customer experience.

“As digital transformation is made up of multiple projects and initiatives, it’s clear from this research that companies in Asia Pacific fear timelines are slipping, and that they have serious concerns as to whether they have enough strategic focus and digital skills to transform fast enough,” he says.

Kumar says Amdocs helps customers accelerate their journey to become digital service providers with a broad range of industry-specific offerings spanning services and tightly integrated software solutions, innovation with partner ecosystem including digital domain experts, and global business process best practices to simplify the complexity involved.

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