Today organizations are building their businesses based on data science. But does this automatically mean that the existing structure knows how to make the best use of data? Not necessarily so, which is why a new portfolio of Chief Data Officers (CDO) are springing up to bridge the gap between CMOs, CIOs and CFOs. So what makes this new position the most coveted today? It’s not the appeal of sifting through mountains of data but the ability to build businesses to a greater level on the power of data. That is exactly why the CDO can play a valuable role in ensuring that an organization values its data across every function of the enterprise. Gartner reports that the average budget globally for the office of the CDO is $6.5 million, with North American companies budgeting more than twice the amount of their European counterparts.
Chief data officers today are often brought in as governance gurus. The position was born out of the financial industry, in which companies have heavy compliance and regulatory requirements. As digitization increased, organizations widely began to accept the role of analytics in helping them to better compete by creating custom offerings which resulted in better outcomes as well. The reason that a C-level executive is now in-charge of data is because until now data was never treated as an enterprise-wide asset. What has changed is the realization that organizations need to solve their data problems first! Ensuring data quality, information strategy and master data management were and are primary responsibilities for CDOs, according to research.
Currently the best definition of a Chief Data Officer is “someone who is responsible for using data and analytics to increase revenue and profitability”. Key responsibilities for the CDO start with setting an appropriate data policy. This becomes the anchor to which all activities align. Policy is a core piece of the puzzle and the content is now well understood. In terms of reporting structures, they interact equally with the CIO and the CEO and also support the COO. It is expected that the now technically oriented CDO will move to a more business and strategy role in the coming years. The CDO is well equipped to ensure the proper resources are in place to identify potential business opportunities. Consider a global retailer leveraging sales information to target a certain age group or income level with pertinent product features to drive up purchasing frequency and revenue growth.
The growing role of the CDO means that even enterprise data architects will find their roles expanding as they become the best friends of the CDOs. The CDO will be seen pushing Enterprise Architecture into a mature strategy oriented role that will affect all business decisions and investments. With new data management technologies hitting the market daily, the CDO is uniquely positioned to bring insight into how such innovation can transform his or her company’s business.
Today data can be monetized akin to an asset and is part of the overall company strategy for growth. Hence it has to be well categorised, catalogued and maintained for making the best of it. The CDO is then the role that is most regarded and probably will grow to be the most coveted position in an organization. The rise of the Chief Data Officer is a transformational change that elevates the importance of data to the top of the organization.