CxO Series: What is the COO’s Role During the Shift in Digital Transformation?

May 26, 2017 4:08 pm Published by
coo digital transformation

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As the CxO primarily concerned with logistics, the COO is central to the digital transformation process.

COOs might not lead digitization efforts- only 13% of them take the reins– but without their participation enterprise-level technology initiatives often fail.

They’re the ones with the practical experience to make a cultural shift take root and grow.

That experience is vital. Poor coordination is behind 80% of project failures, and failure is expensive.

For every billion dollars invested in IT technology, $112 million is lost to projects that fizzle out.

The COO can mitigate the risk of project failure by serving as the “voice of reason” within the company.

When the CIO brings a new system to the board room, it’s the COO’s responsibility to assess how well that project fits with current procedures. That’s been a part of the COO role for a long time, and it won’t change during a digital transformation.

What will change are the goals the COO uses to evaluate the company’s needs. Their priorities need to shift to better align with the new face of business.

These are the COO’s primary concerns during a digital transformation:

Partner with IT from the Start

IT used to be seen as a service-provider. They responded to technological requirements generated by leaders without much opportunity for input on what those requirements should be.

When the leadership did ask their opinion, it was generally for brand or spec recommendations.

Digital transformation requires that IT and the CIO be involved in the earliest stages of a project.

Only by working together from the start can appropriate technology and processes be woven into the foundation of a digital strategy, when it’s most cost-effective to make changes.

CIOs and COOs have a lot to offer each other. COOs are notoriously risk-averse when it comes to spending money.

They want the most reliable solution possible and tend to resist new technology until it’s proven itself.

Right now, with data analytics rapidly becoming the defining difference between companies that succeed and those that fall behind, that approach is flawed.

COOs who cultivate a relationship with their CIO can get a feel for what trends are ready for adoption.

On the flip side, CIOs sometimes become fixated on the absolute newest tech and how it can be used to gain a competitive edge.

They need the COO to balance their enthusiasm with practicality, weighing the expected ROI against the required investment (both in money and internal disruption).

Democratize data

Business intelligence is no longer the sole domain of IT.

Enterprise software now commonly features embedded analytics that offer deeper insight into operations and customer activity.

98% of companies report they encourage employees at all levels to base their business decisions on data, and these tools make that possible.

Analytics rely on large amounts of data to be useful, though, and for many organizations data isn’t readily available across departmental boundaries.

41% of companies have data which is too locked up in silos to be accessible by those outside the C-Suite.

Managers who have an idea that may benefit the company have to request permission to access data needed to check their hunch, and that takes time.

37% reported a delay of at least 24 hours is required for permissions to be granted. Some companies experience a lag of a week or more.

Data silos are sometimes the deliberate creation of IT leaders who worry that Shadow IT will compromise their data.

Other times they result from legacy systems that aren’t fully interlinked.

Whatever the reason for their existence, data silos stand in the way of progress.

COOs should work to find ways of sharing data that account for legacy systems and IT concerns.

A thorough data strategy that specifies the ways data can be used at every level will lower the risk of accidental exposure.

This has the side benefit of empowering managers to experiment with their expanded access to information, which makes them feel engaged and valued.

Find the right talent (and keep it)

Renee West, former CEO of Luxor and Excalibur resorts, said, “You can have the best strategy and the best building in the world, but if you don’t have the hearts and minds of the people who work with you, none of it comes to life.”

Nowhere is that more true than in a digitally-driven company.

Technology is in constant change, and the best way to prepare for it is to attract and maintain solid talent.

However, 66 percent of companies say they have trouble with hiring and retention.

This is one part of the digital transformation where the COO can take the lead.

80% of employees would prefer to work for digital leaders, so the COO should develop hiring practices that showcase that aspect.

Augment salary bids with paid training, subscriptions to online trade journals, and attendance at industry conferences when possible.

Give some thought to updating training procedures for new employees, too.

Google gave their new hires a 15% boost in productivity just by creating an onboarding agenda that included digital training components.

Coordinate cross-platform efforts

Multiple platform usage is the rule, not the exception.

Customers might use a website to browse product information, head into a brick and mortar store for a hands-on test of the product, then tweet questions or complaints to the brand on Twitter.

Maintaining a strong cross-platform presence delivers a direct boost to the bottom line.

Aberdeen Group, Inc. found that companies with a strong omnichannel customer engagement strategies have an 89% repeat customer rate.

They also experience a 6% greater increase in year-over-year revenue than companies without multi-channel strategies.

To get on top of omnichannel efforts, the COO should address three areas in particular:

  • Train customer care agents in how to handle concerns across channels, including social media. Agents in all areas need to have the same information about prices, schedules, press releases, and so on.

  • Make customer information available to agents across channels (within the boundaries of privacy policies). 89% of customers complain about having to explain the same problem to different representatives, so agents should be able to see if a customer has already contacted the company through another channel.

  • Conduct regular audits of all channels to ensure the same “brand” is being universally represented. Focus especially on social media sites, which are sometimes manned by interns or lower-ranked employees without the authority to answer more than basic questions.

Partnership for the Future

Some COOs have worried about the growing involvement of CIOs in corporate strategy.

They see transformational CIOs as a risk to their own position, but in reality the CIO/COO team is a powerful combination.

Working together, they can create and implement a strategy that helps their organization grow into a digital leader.

Read how CEO, CIO, COO can join forces to embrace a digital transformation.

To learn more about how we can help you build a winning digital strategy, contact our team of experts today.

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