Digital transformations promise organizations faster innovation and increased competitiveness. As investments in data and analytics continue to grow, they are quickly becoming a cornerstone of digital enterprise strategies.
The challenges that many enterprises face in achieving the full value of their investments have more to do with human behavior than with data and technologies.
Data-driven companies are becoming more prevalent. With technology, we can now track unlimited amounts of data, and that data can now be used to drive everything from product innovation to employee engagement.
There’s no surprise that more and more companies are introducing Chief Data Officers (CDOs)(1) to their executive teams since data is playing a bigger role in driving strategy and business success.
What is a Chief Data Officer?
In the early 2000s, the Chief Data Officer (CDO) was first introduced. Originally, the CDO was responsible for data governance and compliance, but these days, the role uses data to drive business outcomes.
Chief Data Officers (not to be confused with Chief Digital Officers) have many responsibilities in relation to data, including:
- Management of data analysis, data governance, and data management
- Maintaining data quality
- Developing a strategy for data and information
Data governance and usage are the responsibilities of the CDO. CDOs understand both strategy and how to use data to drive a business in the right direction. Investors and stakeholders can then justify this direction to the best of CDOs.
Good data operations, or DataOps, are supported by the Chief Data Officer. Process-oriented, automated, and collaborative DataOps take a structured approach to design, implement, and manage data workflows and distributed data architectures.
Roles of a CDO
In every case, however, the Chief Data Officer must use the company’s data to achieve broader business goals. Examples include:
- Ensure secure data collection and processing by developing a data management system
- Develop a culture within your organization that normalizes the sharing of this data and allows you to make informed business decisions
- Using proper data analytics, identify pain points throughout the business process, hopefully reducing them, increasing profit and customer trust at all stages
- Analyzing data to make business decisions
- Securing sensitive data and complying with data regulations (such as GDPR)
To perform these tasks, the CDO uses a variety of technology systems, such as business intelligence platforms and advanced analytics programs.
It is equally important for the CDO to build a team of data professionals who know the company’s industry, the company itself, and its objectives, so that they can apply data analysis to resolve any concerns, challenges, risks, or opportunities.
As part of the position, the CDO is also responsible for developing and maintaining the organization’s data governance policy and procedures, as well as managing data across its lifecycle.
The Evolution of the Position of CDO
For as long as organizations have existed, they have gathered and compiled data. With the rise of computers in the second half of the 20th century, however, data volumes and opportunities for analysis grew exponentially.
Data processing managers and others in the IT department initially handled the data and data analysis, and CIOs were typically responsible and overseen the data programs within their companies.
However, it wasn’t until the first few years of the 21st century that the chief data officer role was created to manage and oversee data.
After the great recession of 2007, compliance regulations increased and the CDO position evolved further. A large part of a CDO’s job at that time was to assist organizations in developing data governance policies to minimize compliance burdens.
Currently, the position focuses on assisting organizations in recognizing the benefits of big data in identifying revenue opportunities and reducing operating costs.
Benefits of the CDO
In recent decades, there has been an explosion of data generated by society, which provided organizations of all types with the opportunity to mine both structured and unstructured data for insights about their business, their industry, their customers, market dynamics, and consumers in general.
Leaders realized that these insights could be used to boost productivity and efficiency in the organization, as well as better connect with customers and create new products and services.
Data mining and analytics have recently become critical to driving digital transformation and to competing in the digital marketplace, according to enterprise leaders.
A CDO can be beneficial to any organization that has evolved to the point where it views data as an asset.
Who Requires a CDO?
Due to the importance of data to organizational success, leadership has begun to see the need for data strategy to be owned by an executive.
An increasing number of organizations have taken on the position attests to this. In 2012, only 12% of large companies had a CDO. As of 2018, this figure was 63%, up from 56% in 2017. By the end of 2019, most large global companies will have established CDOs.
Chief Data Officer vs. Chief Information Officer
The Chief Information Officer’s (CIO’s) job is to select, implement, and manage a company’s technology systems so that it can function at its best.
Some believe that CDOs should report to the CIO, while others see the two roles as a kind of partnership, with the CIO being responsible for the technology infrastructure, and the CDO is in charge of connecting the data and insights collected by the infrastructure to the business priorities.
Chief Data Officer vs. Chief Digital Officer
In the early 2000s, Chief Digital Officers became popular. In various roles, they are responsible for driving digital innovation in the business – leading the charge in digital transformation or running the digital side of the company. By 2023, Gartner predicts 50% of chief digital officers without a chief data officer counterpart will have to assume those responsibilities.
CDO vs. Chief Analytics Officer
According to whom you ask and the nature of your company, there is no difference between a Chief Analytics Officer and a Chief Data Officer. Many consider the CDO role to be a natural evolution of the CAO role, which traditionally has focused on data analysis and business intelligence.
However, some organizations still differentiate between the two, having the CDO focus on higher-level business objectives based on insights gleaned from the CAO.
Most successful organizations are data-driven in some form or another. Big data makes it imperative to become data-driven. No matter what data a business collects, whether it is from customers, clients, internal processes, or financials, it can be used to:
- Enhance product performance
- Gain a competitive edge
With the advent of technology in business, data collection has never been easier, but it also comes with great responsibility.
This is where the CDO (Chief Data Officer) can help.