Chief Data Officer: 4 Reasons to Hire a CDO
With a growing emphasis on leveraging data for competitive gain, more companies are hiring chief data officers. Here are four reasons you may want to consider hiring a CDO.
By Priya Singh, Information Builders
Recently, I read an interesting article about how the search effort for the lost Malaysian Airlines MH370 airliner would be better served by a chief data officer (CDO) to pull together the dizzying amount of information (and disinformation, it’s important to add) and get to the real valuable data points that would make the search more effective.
Recently concluded elections in India, the largest democratic process in the world with some 814 million eligible voters (more than the combined population of the European Union and North America) conducted over a period of 35 days, also highlight the need to organize, govern and transform an enormous amount of data into information and get it to the right people at the right time
Global events like these got me thinking about the need for chief data officers and why they are becoming a mainstay in the executive suite.
The role of CDO and its importance for today’s organizations has never been more crucial. Financial services companies are ahead of the game in appointing CDOs with Wells Fargo being the latest bank to appoint its first-ever CDO. Gartner predicts that by 2015, 25 percent of large global organizations will appoint CDOs.
Here are four reasons why CDOs will occupy one of the most important C-level positions in the coming years and why you might want to consider appointing one:
Growing Realization that Data Is an Asset
Data is increasingly seen as a strategic asset, and organizations should be treating it as such. Like any other corporate asset, the data contained within your organization's information systems has financial value. The value of the data increases in direct relationship to the number of people who are able to make use of it and make timely, accurate business decisions.
Just like the CFO, there is a need for an executive whose only focus is to manage and leverage data to maximize business benefits of the organization. The CDO will own the business responsibility and act as the treasurer of this important asset to ensure data is transformed into an information asset and distributed to the right stakeholders for the benefit and growth of the organization.
Rise of Big Data and Digitization
There isn’t much more I can say about the rise of Big Data that you haven’t already read. But here is the key: Big Data is not about collecting and storing all the structured and unstructured data into distributed systems like Hadoop. It’s more accurately described as prioritizing the kind of data that must be brought into the enterprise, maintaining data quality across the data supply chain and applying analytics to provide actionable insights in a timely manner.
Acquiring, storing and retrieving data is just part of the equation. Digitization and the new standard of instant consumption of data have also made it more difficult for organizations to simply rely on IT or a business department to handle information management. A single executive must be named to act as a point person at the top of the organization to make data policy decisions.
Business, IT Collaborate on Data Management
With the advent of Big Data and analytics, there can be a power struggle between business and IT over control and access to data. Organizations that succeed in leveraging their data for better business have already realized that the control needs to be shared with equal ownership on both sides of aisle. This is already happening with data quality and master data management solutions that are increasingly built for business and IT end-users. Power sharing creates opportunities for collaboration between business and IT. The chief data officer is best positioned to be the arbiter that understands the priorities and needs of both and thus is able to build a successful data strategy.
Focus on Analytics and Data Governance
There is no substitute for accurate data in business. Even so, research reports continue to offer statistics supporting the prevalence of bad data in enterprises and corresponding loss of revenue and/or market share.
The stakes are getting higher for organizations to improve data quality and create supporting governance protocols. Mastering data is gaining priority as companies are looking to contextualize the enriched data and analytics to gain actionable insights. This is an area where the CDO will partner with a technology counterpart, such as a CIO, to maintain data accuracy and data quality and provide business context to increase value of data.
Companies should consider creating a C-suite position to tackle the challenges posed by the aforementioned trends and shifts in the landscape. A CDO should ideally be from a key line of business, with significant functional skills and deep understanding of technology. He or she will craft organizational data strategy and partner with the CIO and other senior executive managers to effectively execute the plan.
While IT is and will always be part of information management, the strategic ownership should eventually move to the team led by the CDO. In addition to owning strategy, the CDO should partner with IT to implement data quality and master data management initiatives while partnering with lines-of-business to deliver business intelligence and analytics. In essence, the CDO will manage operational and analytical aspects of data on the basis of a far-reaching data strategy.