Digital leaders lack manpower and quick decisions!

In the wake of digitalization, companies are changing their strategies: new job profiles are being created or old ones are being given new areas of responsibility. New positions as Chief Digital Officer and Chief Data Officer are particularly common. Both are management positions that face great challenges in digital transformation. This is the conclusion of a recent study by Artefact and Kienbaum.

In their “European CD²O Study — Profiles, Challenges & Enablers of European Digital & Data Leaders”, Artefact, a global provider of digital and data solutions, and the management consulting firm Kienbaum have investigated the challenges European companies face when it comes to digitalization and the role of the Chief Digital Officer (CDiO) and Chief Data Officer (CDaO). To this end, 100 European digital and data experts from 21 industries were surveyed and around 500 profiles from professional networks and corporate websites were analyzed. The results show that Chief Digital and Data Officers play an essential role in the digitalization process, but at the same time have to deal with growing responsibilities and challenges. According to Artefact and Kienbaum, experienced specialists in the fields of digital and data are significantly driving the transformation of European companies; these positions can now be found in most companies in various industries. About 95 per cent of the companies surveyed have experts who are responsible for digital processes and 81 per cent employ specialists who explicitly take care of company data. Both areas are strongly male-dominated, but there are significantly more women in the position of Chief Digital Officer than as Chief Data Officer.

Both positions, CDiO and CDaO, are now relatively common in companies. The role of Chief Data Officer is significantly newer, with 75 per cent of the CDaOs investigated having been hired in the last three years. This demonstrates that data collection and processing is becoming increasingly important for the success of a company.

Obstacles to digitalization in companies

As important as both positions are for the digitalization of companies, CDiO and CDaO often face many challenges in practice. High budget pressure, fierce competition for new talent and the legitimization of one’s own position within management, just to name a few.

Chief Digital Officers mainly complain about too complex decision-making processes within the company as a result of differing views on digital issues. Chief Data Officers, on the other hand, face tensions within the company regarding the utilization of data and are critical of too rigid organizational structures. Both positions see a major problem in the recruitment of qualified job candidates. Companies often use external mediators for this purpose: “For more than five years now, the number of digital management positions being filled with the help of external consulting services has been increasing significantly. However, in order to be perceived as an attractive employer, far-reaching developments are necessary, for example, the general organizational design, agile work processes or leadership behaviour,” says Sebastian Holmer, Practice Head Digital/Technology at Kienbaum.

In addition, the digital and data experts surveyed also stated that they are increasingly facing industry-specific challenges. For example, the experts in the banking and insurance sector see a great need for long-term data and AI solutions to better position themselves vis-à-vis the competition posed by newly emerging neo-banks. On the other hand, experts in the retail sector are focusing primarily on the areas of omnichannel user experience and the use of data to optimize the supply chain and operational processes.

Important trends for CDiO and CDaO

In addition to perceived challenges, the experts were also asked about the most important trends they will be dealing with in the future. These include edge AI, quantum computing, virtual reality and data security.

“Digital, data and AI are constantly and massively influencing the competitiveness of today’s businesses — it is, therefore, a never-ending journey for which we must be equipped. Our study shows that we need profiles with specific and deep expertise to be prepared for this. The topic has to be practised and driven by the board, but clear profiles are still necessary for the implementation”, comments Hannes Weissensteiner, Managing Partner DACH at Artefact.

Takeaways

• Around 95 per cent of the companies surveyed have experts who are responsible for digital processes and 81 per cent employ specialists who explicitly take care of company data.
• Budget pressure, their own positioning and the competition for new talents are the top challenges for CDOs

Find the full study here.