For GE's CIO, CDOs are meant to focus on commercial products
- In the digital age, a lot of emphasis is placed on the rise of chief digital officers to help pivot companies' internal processes. But the true focus of a CDO should be commercial products, according to Jim Fowler, VP and CIO of General Electric, speaking at the MIT Sloan CIO Symposium last week.
- "If you're bringing a chief digital officer inside the company to make the company work more effective, more productive, that's the role of the CIO," Fowler said. "If you are going to sell commercial product and you're working to start to build software, analytics that you want to sell outside to your customers, then absolutely, a chief digital officer could put together marketing message, product strategy, figuring out how you commercialize — that's the value."
- The "CIO is focused on GE for GE," Fowler said, while Bill Ruh, SVP and CDO for GE and CEO for GE Digital, is working to turn GE into a $10 billion software business. Though there is some overlap in the roles, at GE the CIO is focused on internal transformation, while the CDO is working to digitize products.
Transformation is hard for a 125-year-old company. In recent years, GE has been on a path of pivoting away from its industrial roots to become a software business. Not only does the company have to make its internal business competitive in the digital age, it also has to rethink its product portfolio.
Making true transformation possible requires investment from executive leadership. For GE CEO Jeff Immelt, it's an "all-encompassing change" that requires buy-in from all levels of the business. Immelt is key to driving digital initiatives both inside the company and commercially through its products, according to Fowler. That's one of the reasons it is possible for Fowler's organization to have a $700 million target for operating profit generation as a way to help make GE more efficient.
There's a lot of push and pull across organizations, as companies in every sector work to modernize. But a new leadership structure does not guarantee a company will be able to compete down the line. Too often there is tension between internal leadership over who is truly responsible for digital transformation. At GE, the lines are clear. Everyone is bought into digital initiatives, but the CIO and the CDO are focused on transformation in different parts of the business.
Sure, there is more emphasis on internal technology business units helping to contribute to the bottom line, but it comes as a goal for overall modernization and streamlining of services. The more agile IT can become, the easier it will be for companies to compete long term.
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