The chief data officer has become an important business leader, unlocking commercial value and influencing company strategy
The future of the chief data officer (CDO) is intriguing as there’s a transformational shift happening. Most sizeable companies will have a CDO by next year and the role is becoming better defined. Like compliance and sustainability leaders before them, the chief data officer was once seen as a policeman telling companies what they can’t do or priests telling them to stop and sin no more. However, the role is now moving along a more progressive and prophetic track.
CDOs are increasingly present in the C-suite, showing their bosses where the next opportunities, as well as threats, lie. The top drivers are sales and revenue growth, cost-reduction and efficiency-savings, and the need to improve customer intelligence. This means CDOs need to find new ways of talking to the top.
Richard Merrygold, director of group data protection at Homeserve, a home assistance provider, says: “CDOs need to sell the benefits. The CDO role is one of looking for efficiencies, simplifying needs, demonstrating cost-benefits, and encouraging businesses to be open and transparent.”
Chief data officer role shifting from gatekeeper to business strategist
Change came out of the 2008 financial market meltdown and is being spurred on by the recent big data breaches, most notably the Cambridge Analytica scandal and the new European Union General Data Protection Regulation (GDPR) requirements. While these demonstrate the importance of the CDO role, they are essentially sticks to beat the leadership with, but the role isn’t all about fear and risk. It is also about stewardship of the company’s data assets.
But Mark Hinds, chief executive of Polymatica, a data science and visual analytics platform, says: “Everyone gets it, but organisations struggle to decide where to land the analytics function.”
The CDO role is evolving and shifting rapidly from gatekeeper to business strategist. Historically it involved collecting data and ensuring, at the basic level, data is protected. The role still does this, but the focus is now about unlocking value. Data assets are strategic sources of insight and leverage for a range of business functions, including risk management, regulatory compliance, sales and marketing, product development, and operational performance. Playing a prophetic role means taking a different approach both to the data and business strategy.
Solving this challenge means focusing on opportunities. A chief data officer needs to understand how information can transform a business and be able to spot opportunities to apply it. Mr Merrygold says: “I try desperately hard in my role as CDO to show the opportunities, not just to get people to understand GDPR. It is a data-driven role, which is not just about telling you not to do something. We need to balance the commercial viability of business, but also warn of the dangers of taking too big a risk.”
CDOs rewriting their job descriptions
The role is increasing in sophistication because companies are transforming their data ecosystems in response to fast-moving technology innovation in digital, mobile payments, big data management, advanced analytics, blockchain, robotics, cognitive learning and automation.
The chief data officer needs to understand the language of the business, and see how data and strategy interests coincide. They also need to talk the language of the analytical community and communicate in ways they appreciate. They need to appreciate the power of technology and know how to push providers to get what they need. This entails a cultural shift for organisations to embrace business analytics and needs to be done top-down.
This all makes the CDO role one of leadership. Mr Hinds believes the CDO “could be the most important role outside of the CEO”. The chief executive needs to be the sponsor of the programme, in partnership with the chief data officer, if it is to succeed.
“What is happening now is that CDOs are rewriting their job description,” says Mr Hinds. “Progressive CEOs want CDOs to be on the top table, to show them how to unlock the commercial value of data, but just don’t know how. The CDO needs to craft the data journey for them. CEOs are frustrated by the lack of insight, the static view of data; they know there is real value there, but need to be shown how to get there.”
CDOs empowering companies and transforming business
Companies through their CDOs are becoming empowered, and the data they work with is funding the transformation of their businesses into truly digital companies, where information is corralled, analytics are powerful and data use is nimble. Everyone needs to speak the language of data. Businesses are embracing artificial intelligence (AI) and machine-learning, and doing so quickly.
Andrew Barnett, CDO at Legal & General Investment Management, explains: “We have AI and so on, as well as big data, but the question is are we creating value? The CDO needs to challenge the business; can we use these new technologies, not just technically, but culturally as well?”
The CDO is the prophet to create profit, as they guide companies through innovation to achieve value for customers and the business
Perry Krug, principal architect at Couchbase, an engagement database company working with CDOs at companies including Disney and GE, agrees. “The CDO needs to instigate a wider cultural transformation across the business,” he says. “This is perhaps the CDO’s main challenge, as we’re constantly hearing people are often reluctant to embrace change. Putting insights from data into practice is therefore as much of a cultural battle as it is a technical one and it’s down to the CDO to lead the charge.”
The chief data officer needs to tell the story of data. Mr Barnett comments: “If we talk about governance, we will lose the room. If we talk prophetically, we will get people in the room.” The CDO is the prophet to create profit, as they guide companies through innovation to achieve value for customers and the business, influencing commercial strategy and future success. This makes the chief data officer no longer a “nice to have”, but a “must have”.