The importance of data within organisations has rapidly increased. Businesses now recognise its real value and are adapting their operating models as a consequence. This acceleration in significance is driving the growing need for senior data professionals to act as the guardians to the amassing amounts of data being produced – the Chief Data Officer (CDO).
Last year Experian Data Quality (EDQ) conducted an initial study into this emerging role, entitled ‘Dawn of the CDO’ which established that 92% of Chief Information Officers (CIOs) would like to see a CDO in place within their organisation. In addition, Gartner* predicts that 25 percent of organisations will have a CDO by 2017, with that figure rising to 50 percent in heavily regulated industries such as banking and insurance. Given these stats, it’s unsurprising that we’re now seeing real momentum in the number of companies appointing of a CDO.
With a clear surge in the role, EDQ conducted a second phase of the research, which explores the role in more detail in order to provide real insight into what it is like to own and manage data. For the report, we spoke with more than 40 CDOs and senior business executives from blue chip, multinationals based in Europe. Overall we found that this new ‘data force’ is being recruited from a variety of backgrounds to fulfil these newly created roles.
What seems to be critical to a CDO’s success is the combination of change management and communication skills, tied in with the ability to identify a progressive roadmap that influences not only short term improvement in data quality, but also enables evolution and disruption of business models. Emanuela Aureli, Consultant at Spencer Stuart, a leading executive search consulting firm, described the role of the CDO as an exciting one: “It’s evolving fast and varies according to the nature and requirements of the organisation. In one type of organisation compliance and regulation may lie behind the creation of the role, whereas in another the CDO is there as a response to business model disruption and the need to drive innovation.” Here I will outline some key findings from the report.
Cloud Is Redefining Architecture Ownership
The rapid adoption of cloud computing is accelerating standardisation of infrastructure and software packages, introducing, as a result, clear rigid ways for information and data to be captured and processed. This in itself is a significant contributor to improvement of data hygiene, a fundamental prerequisite to data quality strategy. Also, by switching to cloud based solutions it creates a standardisation that removes the need for customisation. Therefore time and budget traditionally spent on those activities are now focused on the outcome – the data.
As much as these developments have enabled corporate-wide accessibility of data, during large technology implementations like cloud adoption, data leaders are required to take charge of significant change programmes and need to structure their organisation accordingly. The response has often meant that a CDO has been appointed, at board level, together with an overhaul of various communication structures involving data partners, data stewards and other data professionals.
The study supports this and shows how CDOs are firming taking their seat on the company board, driving business decisions from the top, with 70% reporting directly into the CEO. In another related consequence of the adoption of cloud computing, there has been a clear shift of the Chief Architect role from organisations to technology vendors.
Data In A Digital World
The pace of technological change and increasing expectations from consumers has meant that organisations need to constantly be one step ahead. Digital empowerment coupled with data enables business to remain agile and drives competitive advantage. Given the increasing momentum and variety of opportunities data presents, it is not surprising that the report found a convergence of activities around digital services and data. Mature organisations are already taking advantage of this convergence, which has a direct impact on the monetisation of their initiatives, and in some cases are undertaking a complete rethink of their business model to accommodate this.
Confronting The Ethical Challenge
When looking at how data impacts their business model, the research found that most executives would agree on the following: There should be no change to the way businesses manage operational data, this is too critical (changing this introduces too much risk); refine the way we exploit analytical data (the main contribution of CDOs for now) and investigate the power and use of social data. Although social data, and to an extent names data, is a source of significant insight for a consumer-led business model, it is not yet typically an integral part of an organisation’s data strategy.
This type of data is being handled with an unquestionably high level of integrity amongst the people we have talked to. We found that ethics and self-regulation take precedence over any monetisation potential, regardless of the type of compliance in place. There are some interesting developments in this area, some of the decisions being made by CDOs to address the ethical issues include the appointment of a Chief Ethical Officer, the establishment of bodies like Data Ethic Councils and Consumer Working Groups.
The way organisations perceive data is maturing rapidly, with most boardrooms now recognising that data is important. What’s now needed is a boardroom ‘champion’ to turn the management of data into strategic ‘business as usual’ activity. CDOs have an exciting role to play to shape the future of their organisation, and, whilst cloud computing enables a degree of standardisation, the multitude of aspects that need to be considered makes the appointment of a “Data Tsar”, in some form or another, absolutely essential.