The Use of Chief Digital Officer in Gaming & Hospitality
Modernizing the role of IT to create and unlock enterprise value through digital.
- Digital is the new normal. COVID-19 was the volatile breaking point that forced change in the industry on an IT, business, and customer level.
- Digital is not embedded or formally structured within the IT organization.
- Executive leadership does not have the digital culture or understanding required to enable a digitally enabled IT department.
Our Advice
Critical Insight
Gaming and hospitality organizations lag in focus on a truly digital role. As your organization shifts to an omnichannel platform business, the role of IT needing to pivot to a revenue operating model is increased and requires a chief digital office role to fall under IT.
Impact and Result
Embed digital into IT and leverage this report’s contents to make the case to the business:
- Articulate the importance and effectiveness of embedding digital in IT versus a business department.
- Analyze the current state of the CDO role in the gaming and hospitality industry as well as adjacent industries.
- Choose your own digital journey depending on where you’re at on the IT maturity ladder.
The Use of Chief Digital Officer in Gaming & Hospitality
Modernizing the role of IT to create and unlock enterprise value through “digital.”
Analyst Perspective
Digital is not a trend.
Your guests’ lifestyles, habits, and preferences have changed immensely since COVID-19. Digital is not a trend – it’s the way. For organizations to be most successful in their digital transformation journey, a digital leader is crucial. Organizations will be faced with many questions on this matter: Why do I need a digital leader? Who does a digital leader report to? Where do they sit in the organization’s structure? Is the hiring of a digital leader common among Gaming & Hospitality organizations?
This report is designed to educate Gaming & Hospitality organizations on the role of a chief digital officer (CDO) and the importance for the role to be embedded within IT. The report can be leveraged as a “make the case” for business executives.
Monica Pagtalunan
Research Analyst, Industry Practice
Info-Tech Research Group
Executive Summary
| Your Challenge | Common Obstacles | Info-Tech’s Approach |
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Digital is the new normal. COVID-19 was the volatile breaking point that forced change in the industry on an IT, business, and customer level. Digital is not embedded or formally structured within the IT organization. Executive leadership does not have the digital culture or understanding required to enable a digitally enabled IT department. |
The Gaming & Hospitality industry is behind the curve when it comes to embedding a digital leadership role in the organization:
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Embed digital into IT and leverage this report’s contents to make the case to the business:
|
Info-Tech Insight
Gaming & Hospitality organizations lag in focus on a truly digital role. As your organization shifts to a platform business, the role of IT needing to pivot to a revenue operating model is increased and requires a digital leader to fall under IT.
Becoming a digital business
Automate tasks to free up time for innovation.
Business activities (tasks, procedures, processes, etc.) are used to create, sell, buy, and deliver goods and services.
When we convert information into a readable format used by computers, we call this digitization (e.g. converting paper into digital format). When we convert these activities into a format to be processed by a computer, we have digitalization (e.g. scheduling appointments online).
These two processes alter how work takes place in an organization and form the foundation of the concept digital transformation.
We maintain that digital transformation is all about becoming a “digital business” – an organization that performs more than 66% of all work activities via executable code.
As organizations take a step closer to this optimal state, new avenues are open to identify advances to promote growth, enhance customer experiences, secure sustainability, drive operational efficiencies, and unearth potential future business ventures.
Key Concepts:
Digital: The representation of a physical item in a format used by computers.
Digitization: Conversion of information and processes into a digital format.
Digitalization: Conversion of information into a format to be processed by a computer.
The CDO enables a platform strategy
Your digital leader will develop interactions that can jump from physical to digital, and vice versa, but keeps the identity of the customer intact in both environments by curating content, delivering seamless interactions, and orchestrating value across the ecosystem.
- Mobile application
- Loyalty platform
- Casino management system
- iGaming/Sports betting platform
- Customer relationship management
- Property management system
- Central reservation system
Structure redesign matters
Your organization must redesign the IT structure to align to the strategic objectives of the enterprise.
Adaptability is at the core of staying competitive today. Digital technology and information transparency are driving organizations to reorganize around customer responsiveness. To remain relevant and competitive, your reporting structure must be forward looking and ready to adapt to rapid pivots in technology or customer demand.
Structure is not just an organizational chart. The design of your organization dictates how roles function. If not aligned to the strategic direction, the structure will act as a bungee cord and pull the organization back toward its old strategic direction. Structure supports strategy, but strategy also follows structure.
Visual Extract: This is Info-Tech’s IT maturity ladder where organizations can visually determine where they are in their current state and where they want to successfully climb to as their aspirational state. In relation to the CDO initiative, when an organization achieves Innovator level, the operating model and IT leadership title is going to change because considering digital in your portfolio helps to achieve competitive advantage.
Steps to embed digital in IT
Enable your organization’s ability to thrive in a digital economy.
Journey #1: If your IT department is viewed as a “business partner” or “innovator.”
1
Use of CDO in Gaming
Make the case to roll digital into IT.
2
Redesign Your Organization Structure
Taking on digital capabilities is a critical redesign driver.
3
Define Your Digital Business Strategy
Cross-collaboratively build your people, processes, and technology initiatives.
Journey #2: If your IT department is viewed as a “trusted operator” or below.
1
Define Your Digital Business Strategy
Cross-collaboratively build your people, processes, and technology initiatives.
2
Redesign Your Organization Structure
Taking on digital capabilities is a critical redesign driver.
3
Use of CDO in Gaming
Make the case to roll digital into IT.
Gaming & Hospitality Organizations must strongly consider a CDO role
The Gaming & Hospitality industry is vulnerable to significant changes that are reshaping value – facing a digital threat with e-commerce, online sports betting, and iGaming. For example, digital-first fantasy sports betting companies like FanDuel (with 12 million users and $1.9 billion in revenue) are new entrants into real-money gambling that have become a digital threat to the industry. The CDO should bridge the brick-and-mortar and online experience gap to counter this disruption.
Organizations must improve operational efficiency and resiliency for years to come. Many organizations in the Gaming & Hospitality industry have not fully embraced the power of artificial intelligence and machine learning to benefit both internal processes and external guest experiences. The industry will require a disruptive perspective from someone (CDO) who can improve and re-engineer business functions and processes to better enable a seamless and personalized digital guest experience.
Embracing the digital era will benefit your organization and by extension, the entire industry. It would allow the organization and industry to expand existing revenue streams and tap into new growth strategies including new customers, new products and services, and new business models. The industry should move beyond basic digital implementations and toward a fundamental and seamless transformation of the business, taking advantage of new/er concepts to transform the industry.
The CDO can unlock organizational value post-pandemic
Build business resilience and customer relationships.
97% of surveyed executives say COVID-19 accelerated their digital transformation, using the pandemic as a stimulus for change. – Forbes, 2020
- COVID-19 has irrefutably changed livelihoods, businesses, and the economy. During the pandemic, digital tools have acted as a lifeline, helping businesses and economies survive, and in the process, have acted as a catalyst for digital transformation.
- Although the chief digital officer role has steadily been increasing since it was created in 2010, COVID-19 has accelerated a post-pandemic push for a CDO because of its ability to enable the following:
- Enterprise-wide digital transformation: Improve and digitize all aspects of the business internally and externally by modernizing systems, introducing agile processes, and embracing innovative technology to increase business resilience.
- Seamless customer journey: The pandemic made organizations realize that they must prioritize the digital experiences for their customers to optimize customer relationships. The CDO will help the organization be better positioned to tackle the post-pandemic new normal where consumers’ needs and expectations have drastically changed.
According to an IBM Study:
92%
Percentage of surveyed organizations that scored high in digital maturity have a CDO.
65%
Percentage of surveyed organizations that scored low in digital maturity do not have a CDO.
- IBM, 2019
Three ways to embed the CDO role into your organization
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| Role Distinction and Reporting Structure | Common Structures:
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