Major corporations aren’t paying enough attention to digital at the most senior levels, according to a new analysis from customer management consultancy PeopleTECH.
While most firms claim the digital transformation is a priority, that isn’t translating into a role for digital in the boardroom or C suite.
PeopleTECH found that just 2% of FTSE 100 companies have a chief digital officer (CDO) or equivalent on their board of directors and just 5% have a CDO in their senior management team or executive committee. A further 11% had a senior digital employee listed elsewhere on their website.
The findings suggest that the largest companies aren’t taking the digital transformation seriously enough, PeopleTECH’s managing director Mike Hughes said.
“The sheer impact and importance of digital cannot be under-estimated. I think that a large number of companies confuse IT and digital, and […] still aren’t focused enough at a board level on digital transformation.”
He said that while lacking a place for digital on the board doesn’t mean a company is necessarily lax about the digital transformation, organisations which are surging ahead in digital spaces usually have a senior digital executive leading the project.
In many other firms, the digital team might be siloed and not have input into the company’s overall direction or its products or services. Without a fully integrated digital strategy, firms risk falling behind.
“The chief digital officer (CDO)is arguably the most important role in an entire organisation. Instead of digital transformation falling under the remit of the CIO, CMO or even a COO, having a CDO in place means there is a focus on integrating digital throughout the business and it prevents digital becoming isolated,” he said.
PeopleTECH also surveyed companies on the FTSE AIM (Alternative Investment Market) 100, the ranks of which include younger and more high-growth companies, such as online clothing retailers ASOS and Boohoo and pollster YouGov.
But even among more digitally oriented firms, digital hasn’t reached the highest levels of management. Not a single FTSE AIM 100 firm had a chief digital officer on the board. Just 2% had a chief digital officer on the senior management team or executive committee and another 2% had staff members on their website with digital listed prominently in their job descriptions.
This may be because firms on the FTSE AIM are run by digital natives and thus more likely to have digital embedded at every level of their organisation. They, therefore, may not have as great a need for a senior digital executive to integrate digital efforts.
“If a company has digital embedded in its DNA, then there is less need for a CDO, and that’s certainly the case for many of the firms on the FTSE AIM 100. But that’s not to say that high-growth companies shouldn’t keep focused on digital transformation—it’s vital to all companies irrespective of size, industry or maturity level,” Hughes added.