Authored by By R “Ray” Wang, founder, chairman, and principal analyst, Constellation Research and Published in CRM Magazine April Edition
WHEN the pandemic started having its enormous impact on businesses a year ago, most companies scrambled to accelerate digital transformation efforts. This undertaking ranged from rekindling digital channel projects to doubling down on digital channels to putting subscription business models into overdrive. Often led by chief information officers, chief marketing officers, chief technology officers, and chief digital officers, these efforts successfully shifted channel revenue from physical to digital while tackling the challenges of remote work delivery. Five years’ worth of digital transformation was compressed into less than a year.
As organizations now shift to the post-pandemic reality, the “light” digital projects focused on digital channels will not be enough to sustain true digital initiatives. The simple monetization models will face intense competition. The lack of a digital business model will leave organizations exposed.
In fact, digital leaders will have to invest in three key areas to emerge successful in the post-pandemic era:
- Digital business models. Leaders must think hard about how their digital strategies will coexist with traditional business models. They must determine where their mix of financial investment and human capital will reside.
- Digital monetization. Organizations must rethink monetization efforts across ad revenue, search revenue, goods, services, memberships, and subscriptions. Selection of monetization models will be driven by business model decisions.
- Digital channels. While websites, mobile apps, and chats played a key role in enabling pandemic CX, digital leaders must determine how investment dollars will be allocated in a post-pandemic world, as hybrid models will dominate the landscape. Business models and monetization models will determine levels of channel investment.
Consequently, who leads such initiatives going forward will be hotly contested. In fact, the role of the chief digital officer must be revisited, given the uneven job description and responsibilities across different industries. In many cases, CTOs have served as chief digital officers; in others, the role has been filled by CMOs deploying a marketing tech strategy; in still others, CIOs charged with keeping the lights on in traditional IT have also helmed digital initiatives. While each approach has merit, the lack of clarity and consistency around the CDO role has created tension and confusion in board rooms and among executive leadership teams.
Over the next 12 to 18 months, almost every organization will have beefed up their digital leadership. The rush to anoint a chief digital officer to centrally own all digital initiatives may no longer make sense given the adoption of digital inside organizations and the accelerated digital transformation experienced by leadership. How a CDO is defined may no longer be important.
However, what digital leaders do will play a role. Expect every role in CX to take on digital initiatives:
- Chief executive officers will beef up their direct reports and design for new digital business models, assess future partnerships for joint venture approaches, and create a digital culture that supports innovation and execution.
- Chief marketing officers will accelerate their digital presence, project their brand’s mission and purpose across all digital channels, apply account-based strategies, improve personalization and relevance, and reduce customer acquisition costs.
- Chief service officers will improve incident-to-resolution responses via digital channels, identify new monetization models for service, and apply Internet of Things models to remote service capabilities.
- Chief customer officers will use digital channels to improve community and engagement efforts for higher customer retention, satisfaction, and loyalty.
- Chief revenue officers will design for new revenue optimization capabilities, build out digital monetization, apply machine learning and AI to dynamic pricing, improve account based strategies, and improve revenue per customer.
- Chief information officers will bring their project execution expertise, improve the overall digital infrastructure and channels, support digital monetization models, compete for data supremacy, and future-proof architecture for new digital business models.
While CDOs may still exist, the entire executive leadership team will grow digital skills, as analyst Esteban Kolsky and I predicted back in 2009. The era of the stand-alone CDO driving all digital initiatives will give way to suites of leaders with digital responsibilities. The transition to this digital leadership will prepare enterprises to compete with the likes of AirBnB, Apple, Amazon, DoorDash, Facebook, Google, Netflix, Tesla, Uber, and Zillow in a wide variety of industries.
R “Ray” Wang is founder, chairman, and principal analyst of Constellation Research. He is the author of the business strategy and technology blog “A Software Insider’s Point of View” and co-host of DisrupTV, the No. 1 Tech and Society weekly podcast. His new book, Everybody Wants to Rule the World, will be published by Harper Collins Leadership on July 13, 2021
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