Is the chief data officer here to stay?

Emerging roles and markets leader, Big Data & Analytics Category Team, IBM

I say “yes!” and I’ll give you three reasons why:

  1. Data is only going to grow in importance
  2. Data needs a senior leader to realize competitive advantage
  3. What happens without a chief data officer (CDO)?

Data is only going to grow in importance

We’ve barely touched the tip of the iceberg regarding what data and analytics can do. Most companies are still only using rudimentary data and analytics, such as dashboards and reports. Even these efforts are fragmented across business units and departments such as finance, operations and marketing. This means the enterprise is still getting answers only by department as opposed to a larger strategic picture that can help drive transformation and ultimately competitive advantage. Many CDOs will spend the next few years struggling to do the “data basics”: actionable, accessible, accurate data.

Data needs senior leadership

Many companies have bold goals and innovative ideas for what they would like to do for customers. Some are trying to understand how to leverage operations to ensure products and services are available when and how a customer likes them. This includes everything from ensuring the right color and style of shoe arrives at the right geography in the right season, to more digital experiences such as ensuring a reward is delivered in real-time to an app that buys coffee. Oh, and by the way, that app requires data enrichment, data leverage, data monetization, data upkeep and data protection. Please see the recent IBM Institute for Business Value Chief Data Officer Report for more information on these five ways to drive growth and innovation using data.

What happens without a CDO?

Okay, so there are those of you who are still skeptical. Perhaps you agree with my first two assertions, but the part you don’t agree with is who should be tackling data within the enterprise. Maybe you are thinking “why is there a chief information officer and, now, a chief data officer?” What is the big difference here? Will one replace the need for the other?

Perhaps the biggest case I can make for a CDO, and why this role is here to stay, is what is happening right now in companies that do not have a senior level enterprise data leader with a sole focus is driving business value from data and analytics. Many CIOs have traditionally focused on data as the lifeblood of a business. The data was something that was important to keep all the ERP systems running and orders being fulfilled. This was, and is, appropriate if the company culture still only wants to use data in the background as a more “transactional” resource.

But for companies that want to use data to drive a competitive advantage, they need someone that really knows how to drive business results using data as the actual product or service, or, at the very least as an integral part of the recipe for doing so. Take for example, the coffee app I mentioned before: it leverages data as the way to drive customer engagement—not in the background, but in the forefront as a key part of what the customer is directly interacting with.

An additional argument is two-fold around delayed or failed attempts to meet regulatory demands that ended up costing the company, or the desire of the CEO to speed to market a new innovative product or service only to find the data was not accurate or not present to deliver on it.

This role will only grow in importance as time goes on. Competitive pressure is being applied across the board and the imagination of the CEO has been captured by the idea of a business leader who also understands and knows how to use data for growth and success.

I welcome your thoughts and lively discussion here—please leave me a comment and connect with me on Twitter so we can all benefit from the debate (see the firestarter tweets that inspired this blog post below).

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