Chief data officers find the right data, enhance its quality, and build confidence in it to drive business value
A few months ago, this column explored the advent of the chief data officer (CDO), a new executive with a clear focus on data, as distinguished from other C-level executives who focus on computer systems, enterprise applications, and information technology. This installment takes a closer look at specific aspects of the role, the individuals who are filling it, and some of their challenges as well as their accomplishments.
The number of CDOs today is small but growing. Gartner predicts that by 2015, among large, global organizations, 25 percent will have CDOs.1 Each organization that creates a new C-level role does so for its own reasons.
Some organizations are looking for leadership of data-centric projects that free chief information officers (CIOs) and chief technical officers (CTOs) to focus on other tasks. These tasks include maintaining and expanding applications, keeping up with changing technology, and leading the shift to cloud computing and a mobile workforce. Some organizations are driven by competitive concerns, seeking to lead rather than follow in tapping into new sources of data and putting them to work for the business. And others are looking to transform their business to a new form in which data takes center stage and analysis of data helps to steer the business toward new opportunities.
In some cases, the search for a CDO is a long and deliberate process; in others, another role evolves into the CDO role as part of a new way of thinking about data. However the CDO came to be, he or she starts off with priorities that vary based on the business goals of the organization. But among CDOs, there is broad agreement on one objective: driving business value gained from enterprise data.
The business value behind the data
What does it mean to drive business value gained from data? The answer always begins with innovation, but specific approaches vary by organization and industry. For companies that provide information services, for example, data generates revenue directly and is often managed as a product. In that scenario, identification of new sources of data might be a CDO responsibility. Another duty might be determining how to package data from diverse sources within and beyond the organization to create new offerings for sale.
Many organizations, however, don’t sell data directly, though the use of data may be central to their business. The goods or services they sell—or the services they offer to citizens in the case of governmental organizations—rely on accurate, timely information. Driving business value from data may include defining the best ways to leverage existing enterprise information. And these days, it very often includes finding and exploiting new data sources, whether from new business partners or from big data sources such as machines (machine data) or people (social media).
Regardless of what the CDO is charged to achieve in terms of revenue enhancement, cost reduction, compliance, or other business goals, a common priority is the development and execution of a data strategy for the organization. The strategy itself can cover a broad range of issues such as data ownership—for example, who owns the data that marketing uses to understand and properly target customers and prospects? It also covers data quality—for example, who is responsible for keeping data clean and timely?
The structure and scope of the organization that is focused on data is also part of the strategy. Creating that team is an important step taken by a new CDO. To minimize internal strife if strong players from other teams are tapped to join the new data office, the CDO needs first to make other C-level executives comfortable with the unique goals of the new data-focused organization.
Data quality enhancement and maintenance
Although the specific problems vary from one organization to the next, “every company has data problems,” says Mario Faria, CDO at a cloud services organization. In organizations that have been plagued with issues caused by poor data, a primary objective is improving and maintaining data quality. In organizations where the top company priority is growth, the related data priority may be finding new sources of information about customers and prospects and using that data to fuel growth. These sources include social media and other sources that were previously unavailable or unusable.
For some organizations, the CDO is the leader of data-focused projects, and the priorities of the CDO are determined by the projects that are chosen for management. Priorities range from cost reduction to identification of new business opportunities to reduction of credit risk exposure—all determined by the collection of managed projects. An example of an organization taking this approach is KeyBank, where CDO Ursula Cottone explains that her office inherits goals, funding, and business justification from the projects it manages.
Peter Aiken, founding director at data management consulting firm Data Blueprint and coauthor of The Case for the Chief Data Officer (CDO): Recasting the C-Suite to Leverage Your Most Valuable Asset, recommends keeping CDOs free from an IT project mind-set.2 However, in organizations where CDOs lead successful projects, those successes sometimes pave the way for a new way of thinking about the value of data that, in turn, opens new possibilities for strategic business leadership based on data and insights derived from data.
Similarly, other CDOs move into their roles to lead specific programs for transforming the use of analytics across the enterprise. Setting up a new organizational structure, creating and running processes and committees focused on information governance, and overseeing certain initiatives become early objectives for those CDOs. However, as in the case of the IT project-focused CDO, in this role the priorities tend to evolve over time. As the function matures, the CDO spends increasing portions of time collaborating with business leaders to identify the types of data that could support top business goals. And then a substantial amount of time goes into finding that data—whether within or beyond the organization—and putting it to work. This process makes the data available to the people and systems that need it, and the CDO works with the chief information security officer (CISO) and security team to make sure the data is appropriately protected and secured.
Confidence in data through information governance
In many organizations that employ a CDO, a central responsibility for that executive is the leadership of information governance for the enterprise. Information governance is a natural fit for the CDO because the orchestration of people, processes, and technology enables an organization to leverage data as an enterprise asset.
Information governance increases an organization’s confidence in its decisions, so the CDO could also be called the chief confidence officer. If there is no information governance program in place when the CDO arrives, the CDO creates one. If information governance is already an ongoing initiative, the CDO becomes the executive sponsor. In that role, the CDO sets direction for governance and performs the critical function of enlisting support from other executives. Regardless of where data stewards and other data owners reside in the organization, the CDO provides direction and oversight to help increase consistency in approach and consistency in interpretation of data across the enterprise.
While information governance exists within companies of all sizes, large organizations typically have a more formal structure, with advisory committees, a data governance council, and multiple stewards of data from different domains. The CDO takes the helm and makes sure that the various components work smoothly and collaborate. In smaller organizations, there is typically less structure surrounding the governance process, and the CDO has an important responsibility to drive the people and governance processes.
In the era of big data, despite increasing interest in and adoption of information governance, governance is often misunderstood. The view that governance is a heavyweight process that impedes progress with various initiatives is a tough one to dispel. With that concern in mind, some organizations—led by CDOs where they exist—practice stealth data governance.
For example, in his organization, Faria says, “There is no formal data governance council. If I called a meeting of a group by that name, no executive would come.” But he accomplishes his goal by calling executive meetings with other names and then discussing key issues and activities related to governance. Similarly, Heather Wilson, CDO at multinational insurer AIG, says, “The word governance—people become deaf to it. Show me the value.” So she focuses on the value of data rather than the governance term when she speaks with CEOs about the value that can be delivered by data.
Does your organization have a CDO? Is a new CDO position planned? If not, who is driving information governance? Please share your thoughts in the comments.
1 “By 2015, 25 Percent of Large Global Organizations Will Have Appointed Chief Data Officers,” Gartner Newsroom, January 2014.
2 The Case for the Chief Data Officer (CDO): Recasting the C-Suite to Leverage Your Most Valuable Asset, by Peter Aiken and Michael Gorman, Morgan Kaufmann, April 2013.
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