Effective data stewardship is undoubtedly a key aspect of the chief data officer (CDO) role. But these top executives are more than just data minders. Increasingly, they are seen as innovative, achievement-oriented leaders. Their task: to convert one of today’s most precious commodities into new sources of revenue and growth.
Data is the lifeblood of the modern enterprise. In a healthy organization, it flows freely and enriches all of the functions, processes, organs, and limbs of a business. Indeed, data has become so essential that the CDO is emerging as one of the most important executives in the new C-level suite.
Data as an Asset
In every kind of organization – large or small, from public sector to retail, data is now regarded as an asset. And because any asset needs more than reactive management of day-to-day issues to deliver maximum value, businesses are recognizing the need for proactive and visionary data leadership.
To provide this, the CDO position was first introduced as a key strategic role in the highly-regulated government and finance sectors. The last couple of years have also seen CDOs appointed across multiple other industries.
The CDO role is still not widespread – there were only 250 people with this job title at the end of 2014, according to David Mathison, the founder and CEO of a professional association known as the Chief Digital Officer Club. However, the chief data officer position has been identified as one of the top emerging executive posts.
More than Data Management
While chief information officers (CIOs) own an organization’s IT systems, CDOs oversee all of the data that flows through those systems. Data policies, procedures, and governance are normally part of their remit. In addition, CDOs are increasingly spearheading data monetization and value creation efforts.
Building a strong data foundation is just the beginning of a CDO’s responsibilities. By ensuring the free flow of sophisticated data and healthy analysis behind the scenes, the CDO can help the rest of the business simplify processes.
A top-notch CDO is one who has a deep understanding of how data yields growth, and how new data flows can lead directly to new sources of revenue and cost control. Well thought-out data strategies can make complex transactions look routine, and unlock hidden insights that identify a company’s best customers and its least valuable suppliers.
Maximizing Potential Returns
As CDOs are hired in industries beyond finance and government, we see their potential to protect and enhance return on large investments. For example, a first-class CDO is essential to successful mergers and acquisitions.
Too many of these projects suffer delays and diminished returns because the newly-combined organizations simply do not speak the same language. Parallel systems limp along for months or even years.
CDOs can change that, because they are masters of rationalizing and translating data. They can accelerate the timeline of a post-merger transition on every dimension, from delivering a comprehensive view of joint customers to ensuring that sales teams are properly compensated.
Working with the CIO
In the early days of enterprise computing as a discipline, data leadership was typically associated with the CIO. Without question, CIOs have been essential to creating, implementing, and maintaining the automation that has helped business realize massive economies of scale.
Today, however, data is such a rich discipline that understanding and leveraging it requires the specialization and focus that a CDO offers. At the same time, the demands on a CIO’s time have expanded exponentially, due to the rapid pace of digital transformation.
CDOs bring with them an intimate understanding of how data impacts the business. This means they can help the CIO to choose the most appropriate and targeted solutions to support the sheer volume and variety of data that this digital revolution is generating.
Because data has traditionally been part of the IT fabric, the CIO/CDO relationship can become contentious. There is no one-size-fits-all approach to defining the right mix of responsibilities and duties of the two technology leaders. However, whether the CIO and CDO are peers, have a reporting relationship, or are managed in completely separate departments, there is ample room for harmony and joint endeavors.
Transformation and Innovation
Because most organizations are still introducing the CDO into the hierarchy, the CIO has a unique opportunity to take a proactive role and lead the discussion about the creation and definition of the new role. One common approach is to allow the CIO to focus on responsibilities that emphasize risk management, excellence in execution, and enterprise-wide security and stability. The CDO, in turn, can focus on transformation and innovation, identifying new opportunities to spin enterprise data into gold.
Let’s connect: Read my previous blog on The Judo of the CDO. Connect with me on Twitter @etalors1 to talk further about chief data officers. Get the inside scoop on contemporary business technology, told by the people who know it best. Read our latest edition of Simplify IT e-zine for interesting perspectives about key IT technologies which are driving business transformations.