With Enterprises looking for the next phase of growth, a new breed on change makers, the Chief Digital Officers are taking the reins of business as well as technology simultaneously in their hands. Amitabh Mishra, leading the transformation for energy giant Vedanta Resources talks about the role of a CDO and the way for organizations to tap the digital moving forward.
With organizations going from IT-enabled to completely digital, how has the enterprise outlook changed through your journey in the industry?
The enterprise outlook has changed in three fundamental ways: (1) IT is viewed more as “technology innovations” than “keep the lights on” – in other words, IT no longer runs the guts of the information management or MIS systems. IT, combined with Digital, now enables fundamental transformations and innovations to the business model. For example, we are building an end-to-end commodity management chain that combines 100% automation with cutting-edge analytics. It will enable us to bring massive benefits to Sterlite Copper in terms of costs and revenue.
Chief Digital Officer is a new emerging role in large organizations across verticals. How is it different from a CIO? What are the responsibilities of a CDO?
A. You have to remember that CDO is a new role, whereas the role of CIO has been around for years. From the reporting and responsibility perspective, in most organizations, the IT organization – and, by extension the CIO – reports into the CDO, whereas in a few organizations, status quo reigns, that is, the CIO continues to report to the COO, CFO or CEO. Regardless of reporting, here is a fundamental way the CDO role is different from the CIO role: the CDO is essentially a business leader with a solid technology foundation who is responsible for achieving business goals such as cost reduction and revenue increase, whereas the CIO is first and foremost a technology leader that primarily focuses on keeping the lights on with the help of information systems and automation. A CDO is responsible for achieving enhanced business objectives using data, analytics, machine connectivity, IoT and Artificial Intelligence. In other words, he or she is the CEO of the digital organization and a ‘revenue center’, while the CIO is a ‘cost center.’ One isn’t better than the other; both roles have a very important role to play in the evolution of the organization.
“IT, combined with Digital, now enables fundamental transformations and innovations to the business model.”
Chief Digital Officer
How crucial is the involvement of the top management in IT and Digital strategies and decisions?
I would say it’s very crucial. Without the active buy-in and proactive involvement of top management, IT and Digital agendas won’t be very successful. In Harvard Business Review (March 2000), Christensen and Overdorf present a very scientific framework for answering this question. If your Digital strategy fits well with existing values but poorly with existing processes, then your innovation team must be heavyweight dedicated exclusively to the innovation project, with complete responsibility for its success. That’s been precisely our approach at Vedanta. Digital is entrusted to dedicated Chief Digital Officers with their own staff. While the existing organization (e.g. logistics, operations, services, finance, et al.) pitch in whenever necessary, the success of the strategy depends on the CDO and his or her team that has the firm backing and support of top management.
What needs to be done to ready the workforce for the Enterprise’s Digital Journey?
A number of things come to mind. These are the steps top management may want to undertake. First, hire the right digital leader that has a combination of business and technology skills, with the ability to paint a transformative vision and execute that vision. Next, make it a big deal. Talk about it at leadership events, employee events, all-hands meetings and the like. In other words, communicate early and often. Next, create Digital Councils that support the Chief Digital Officer in developing and executing a Digital strategy. Next, let the CDO pick an appropriate partner with proven success in developing and executing end-to-end digital strategies. Finally, publicize small successes and parlay that excitement and confidence to create progressively larger successes.
What are some of the ways in which organizations can benefit from digital transformation? What is the scope and opportunities that can be tapped?
A traditional business, with continuous improvements, will run into a wall sooner or later. Where will the next big growth come from? The answer is digital transformation. Imagine a piece of expensive equipment going down in your factory today. What do you do today? Well, you call the OEM, who sends a technician and a part. Tomorrow, post-Digital transformation, this scenario won’t happen because the technician and the part will show up before the equipment goes down. How? By connecting your equipment to the IoT and monitoring the performance of the asset continuously. Another scenario is a financial and operational dashboard for top management that provides real-time scorecards. Yet another is digital process modeling, a ‘digital twin’ of sorts that enables managers to optimize processes perfectly, taking personality-based inconsistencies out of decision-making. And so on and so forth. In summary, a digital transformation is really just that – it’s a transformation that can propel an organization on the path to years of astounding growth.