The important role of the chief transformation officer in digitising financial services

By Stanley Chia | 30 August 2017

The digital revolution has shaken up the business world and fundamentally changed the way we all operate. But while digital technology has been available since the 1950s, the business community is still working hard to ensure all large businesses have a digital first approach. Like any radical overhaul of working practices, it is not without its pressure points.

Companies of all sizes and sectors are undertaking significant transformation programmes, to ensure they are on track to embrace a digital future. With such a huge task on their hands, savvy larger businesses are now looking to a new face in the boardroom to take the helm. Enter the Chief Transformation Officer (CTO). 

Just as the role of the Chief Information Officer (CIO) has evolved into the Chief Innovation Officer in recent years, businesses are now looking for a CTO that can not only manage the development of technology but oversee the transformation of every business process.

Highly capable leaders, Chief Transformation Officers are adept at communicating fluently with multiple stakeholders as well as delivering results on the bottom line. They inspire employees, hold CEOs to account and make sure the end goal of any transformation project is constantly in sight, which leads to improved competitiveness.

And the demand for these individuals is clearly warranted, with recent research by Fujitsu finding that almost 9 in 10 firms (89 per cent) are currently planning, testing or implementing digitalisation initiatives. What’s more, Fujitsu’s survey also found that more than a third of organisations are already enjoying the benefits of investments in digital transformation – including increased revenue and enhanced customer relationships, so the hard work is paying off.

With the benefits of going digital undisputed, it’s no surprise that International Data Corporation (IDC) estimates a $1.2 trillion spend worldwide on Digital Transformation Technologies by the end of this year – a 17.8 per cent increase on 2016.

In addition, IDC predicts more than half of all digital transformation spending in 2017 will go towards technologies that support operating model innovations, to make business operations more responsive and effective. Overhauling legacy systems to increase efficiency is something we’re passionate about, as we have seen first-hand the benefits that digitising a historically time-consuming task can have on a business’s productivity.

By transforming paper-based invoicing to a digital, automated process, friction in the supply chain can be reduced, saving businesses hundreds of thousands. For a business that issues 10,000 invoices a year, potential savings could amount to £59,400.

However, the importance of carefully managing transformation projects should not be underestimated. A successful transition to e-invoicing for example, doesn’t happen overnight. Businesses need to manage their investments carefully, and have access to data and analytics to demonstrate the impact of any digital transformation project.

A study from McKinsey supports this view, with a prediction that 70 per cent of transformation programmes fail. The two main reasons given for this failure are that management behaviour doesn’t support change and employees are resistant to it.

Harvard Business Review’s ‘What is holding back the digital revolution?’ agrees with this, identifying company culture as one of the main reasons that businesses at the front of the digital pack achieve results above other organisations. The report suggests that by having an assigned digital leader to share a compelling vision for the use of digital technology, and the expertise to effectively manage change, organisations will stand a much better chance of succeeding.  

Clearly, having a CTO on board can significantly improve a business’s chance of a successful transformation, and provides the inspiration and guidance that employees need to get behind the change. It’s vital to have someone to shout loudly and clearly about the benefits of change, and to doggedly demonstrate the competitive results it delivers.

Every large business understands the importance of going digital, but do they all understand how crucial it is to have someone driving this change forward. Those that realise the latter too late are in danger of getting left behind.