Zero One: Digital Transformation In-Fighting

Chris Curran, chief technologist and principal at PwC, stepped on the AI Summit stage in San Francisco last week and told a story about a political brouhaha happening inside the C-suite of a retailer, one of his clients.

At the center of the conflict wasn’t artificial intelligence technology per se, but a person – a newly hired chief digital officer. The CEO’s “shiny new” executive enthusiastically began pushing a massive machine learning project much to the chagrin of the CIO and CTO.

“They were super pissed,” Curran says. “But the deal is that the CDO is getting a lot of attention from the leaders and is putting a nine-figure investment request on the table.”

Before we go further, be forewarned: This in-fighting has neither a happy nor sad ending. It’s merely unfinished, much like the story of AI in the enterprise. In fact, Curran led off his talk with a joke generated, ironically, by a voice-enabled AI system. “There are two kinds of people,” he says. “Those who need closure…”

But the notion of political turmoil at the highest levels of corporate leadership with no closure in sight isn’t funny. It’s expensive and can derail careers. AI, machine learning and data fuel digital transformation, but how they fit in the enterprise and who controls them haven’t been figured out yet.

A year ago, the CEO of the retailer hired a CDO to lead digital transformation and emerging technology investment. It’s a common enough hire for bridging the gap between technology and business as the digital economy gains steam. A PwC survey found that 10 to 15 percent of companies have a CDO, but many more have someone in the same role with a different title.

In many ways, the CDO has supplanted the CIO as the shot-caller in tech. A decade ago, the CIO owned virtually all of the technology budget. But a dramatic power shift has occurred over the last few years. This year, Curran says, 68 percent of the tech spend lives outside of the CIO’s budget. No doubt many CIOs harbor at least a little resentment.

Shortly after the CDO came aboard, the CIO and CTO asked Curran for a meeting to discuss technology strategy. But the meeting quickly turned into a gripe session about the CDO, who apparently did very little to involve his C-suite peers.

“This conflict is unbelievable,” Curran says.

The CIO and CTO told Curran that the CDO, having been on the job less than year, began working with business leaders to build a prototype, machine-learning kiosk inside a pilot store. The kiosk would recommend products to customers. Sounds like the kind of aggressive, fail-fast advice you might read in a digital transformation article.

But the fundamentals behind the kiosk were severely lacking. The CDO wasn’t even using the right product catalog and product images. He didn’t have a plan to update the data. He didn’t know how to get customer orders to the back-end and replenishment systems, Curran says.  

In Curran’s view, the CDO failed to engage people, especially the scorned CIO and CTO. High-profile digital transformation projects need a lot of help from various parts of an organization. It’s not the time to establish turf – who controls AI? Who owns the data? Who has the skills? Who holds the knowledge?

“They all want a piece of the pie, all want to get in the game,” Curran says. “So you have to help them do that, not go off in the corner with the sales leader and ignore the CTO or chief analytics officer or whoever it is just because they have a budget.”

The good news, as Curran points out, is that people want to be on this exciting wave of digital transformation, machine learning and AI. Getting them to engage and contribute in a team effort isn’t the problem. “They want to be part of the story,” he says.