The rise of the chief data officer
IBM’s research has recognized the chief data officer (CDO) as a business leader and new hero of big data and analytics. The up and coming role emerged in financial services and government following the financial crisis of 2008, positioned to rebuild consumer trust through focus on governance, risk and compliance.
However, the remit has subsequently widened to now also focus on harnessing data to drive business change and growth. At this year’s Data Governance Forum I co-led an interactive session on the importance of the chief data officer role in these areas using a study by the IBM Institute of Business Value (IBV) for reference. My partner in this presentation was the Forum founder himself, David Reed. The audience was engaged and insightful, further driving my investigation of the CDO role in it’s developmental stages.
Transitioning data strategy
Historically, data strategy has resided within IT, but pressures exerted by the emergence of the digital age (where consumers are better informed and less patient) has increased demand for a more personalized and responsive customer experience. This demand has raised the importance of data to the level of a corporate asset, increasingly recognized as necessary and integral to business strategy and execution.
CDOs should closely oversee data assets as organizations move from traditional data warehousing and reporting to predicting what is likely to happen, effectively acting on that insight at the point of impact. To further clarify, there are five important ideas that CDOs should keep in mind in order to drive innovation and growth using data:
- Leverage: find ways to use existing data
- Monetization: find new avenues of earnings and revenue
- Enrichment: augment data by combining internal and external sources
- Upkeep: manage the health of data under governance
- Protection: manage the health of the data under governance
Many CDOs will need to prioritize improving data quality as wider uses of data place greater demands and expose deficiencies. As data is gathered, contributors need assurance that their classification will be honored and, furthermore, those consuming the information will need to know where the underlying data has originated.
CDO reporting models
The IBV Study identifies three reporting models for the CDO, each with their pros and cons:
- CDOs who report to the CIO: These leaders often lack organizational empowerment, but are able to coordinate the technical aspects of managing data
- CDOs who are a direct peer of the CIO: The CDO in this reporting structure may encounter tension, but typically is empowered by the CEO and can often act independently across business units
- CDOs who report into other business lines, such as the CMO or COO: This can create a structure where the CDO is too decoupled from the IT department and potentially lacks influence, but is still able to manage data across business units
Not only is the correct department and reporting model important, the type of person in the role is also key. Influential characters that have a business background and an appreciation of technology and IT practices are typically successful in this role. This is because they have the ability and urgency to bring together business and IT stakeholders to deliver business change.
Managing the data explosion
There has been a data explosion in the market due to increased access to both existing and new sources of data which is significantly affecting governance, business processes, customer experience and much more. The CDO is vital in managing this explosion, which also includes the protection and ethical use of data.
However, CDOs face challenges in engaging business executives when it comes to governance because it is often perceived as inhibiting business initiatives. A CDO can be most productive by supporting business leaders in pursuit of their endeavours, including:
- Helping them better understand the information they have
- Encouraging confidence in sharing and reusing data
- Protecting data from unauthorized use
Want to learn more about Chief Data Officers? Download the IBM IBV study, “The new hero of big data and analytics: The Chief Data Officer,” and follow #dataofficer on Twitter to be part of the conversation.