Chief Data Officers Put ‘Strategy’ in Data Strategy
Updated · Aug 19, 2014
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It can feel like a little like executive overload, with companies adding emerging roles like chief digital officer and chief customer officer to the more traditional ranks of chief executive officers, chief financial officers and chief operating officers. As more enterprises begin to view their data as a strategic asset, it’s not surprising that chief data officer (CDO) is now considered one of the hottest new C-level roles.
There is a “huge increase in hiring” of CDOs, said Jane Griffin, managing director of Deloitte Canada‘s Analytics practice, adding, “At least once a week, I get an inquiry from a client or a recruiter or a company wanting my help with reaching out to CDOs.” She recently worked with a pharmaceutical company that was trying to figure out how to hire a CDO after it contacted a few candidates and found that “people were asking for salaries 100 percent more than what they had budgeted.”
According to Gartner, the number of large enterprises with chief data officers has doubled in the past year. It expects that number to hit 17 percent this year and grow to 25 percent by 2015.
From Data Compliance to Data Strategy
While the industries that have been quickest to appoint CDOs — financial services, health care and life sciences – initially did so to help deal with regulatory requirements around their data, Griffin said, attitudes are shifting to take a more holistic and strategic approach to data.
When KeyBank named Ursula Cottone its CDO in September of 2012, her initial focus was on the regulatory environment, due to new requirements created by the Dodd-Frank Act and other legislation in the wake of the 2008 recession. But KeyBank quickly moved from compliance to competitive advantage.
“It’s one thing to have to pull together and aggregate data for regulatory purposes,” Cottone said. “But once you’ve done that, how can you use that data to drive revenue or efficiencies?”
Cottone said her primary responsibility is helping KeyBank innovate around its data, a task that encompasses ensuring data quality, making data more transparent, finding ways to reuse data assets and making it easy for analytics professionals and other staff to access data. She thinks of herself as “an advocate for the use of data as an enterprise asset.”
Cottone has held different business roles in her 15 years with KeyBank, handling strategy, support and project management for IT, marketing, communications, prospecting and other corporate initiatives. She is quick to point out that she is not a technologist.
“You have to be pretty deep in some of the technology to do this, but I am not a programmer,” she said. A peer, an executive who is responsible for KeyBank’s enterprise architecture, helps Cottone determine technical requirements for the bank’s data strategies and directs staff to deliver them, she explained.
All About the Business Outcome
While many CDOs at financial institutions initially reported to IT executives or chief risk officers, it is becoming more common to see them reporting to chief marketing officers or other customer-facing executives, Griffin said. “It depends upon the culture of a company and their priorities. You will often see CDOs report to where data can drive the most value first.”
Cottone reports to a marketing/client insight executive, who in turn reports to KeyBank’s CEO. In discussions with other banking CDOs, she has found that reporting structures are all over the board, with some reporting to technology or operations and others reporting to risk or marketing divisions.
“The role of the CDO is not as clear as the CFO or the CMO, where the title is essentially the job description,” Cottone said, adding that CDOs at banks often report into the line of business where the sponsorship for the role originated.
The CDO role should definitely fall under the purview of business rather than IT, Griffin said. “For a long time business people have delegated the responsibility of data management to IT and have lacked ownership of data. IT should be the manager of information, not the sole responsible party for data quality.”
One of her biggest challenges, Cottone said, is fighting the attitude that data is just another project, a view she said is especially common in IT organizations. “Data doesn’t have a start date and an end date like a project does. People will ask ‘Is it done yet?’ but there is no done.'”
Griffin and Cottone agree that CDOs must possess political acumen and the ability to lead change.
“You need someone who knows how to communicate the value of data and get others to buy into it. They must be well respected by their colleagues and peers and have the ability to build the right kind of organization,” Griffin said.
Leading change can be difficult, Cottone said, because business units often think of data as “theirs” rather than as an enterprise asset. “You need that managerial courage because sometimes you must go toe-to-toe with folks to persuade them to think of data from a different perspective,” she said.
While ensuring data quality is a key part of the CDO role, it is important for CDOs to keep their focus on overall data strategy and not get too caught up in the minutiae of keeping data “clean,” Cottone added. “I say data is like laundry because it always gets dirty. You need to identify the areas you want to work on and how you will address them, with an emphasis on business outcomes. You cannot get too tied up in the laundry.”
Because of the newness of the role, best practices for CDOs are just beginning to emerge. But both Griffin and Cottone expect that to change.
One possibility that at least some companies may want to explore, Griffin said, is to appoint an interim CDO who excels at business strategy and building teams to outline desired data objectives and the framework for achieving them, “someone with an entrepreneurial mind set,” and then move to a CDO who would serve as more of a data steward.
Ann All is the editor of Enterprise Apps Today and eSecurity Planet. She has covered business and technology for more than a decade, writing about everything from business intelligence to virtualization.
Public relations, digital marketing, journalism, copywriting. I have done it all so I am able to communicate any information in a professional manner. Recent work includes creating compelling digital content, and applying SEO strategies to increase website performance. I am a skilled copy editor who can manage budgets and people.