Data continues to proliferate. In fact, IDC forecasts a ten-fold increase in worldwide data by 2025, with the role of chief data officer (CDO) becoming critical and frequently regarded as one of the linchpins of digital transformation today.
While most business leaders view the CDO as vital, there is still confusion about what the role involves, and the right background required for an applicant. Broadly speaking, a CDO is regarded as the steward for an organization’s “data ownership and responsibility.”
But it's new territory, with the role covering everything from data integration to monetizing and realizing value from data to establishing an overarching data strategy for an organization.
According to Gartner’s 2018 Chief Data Officer survey, today’s CDOs have one of the toughest seats at the executive table – with demonstrating meaningful business impact being the biggest burden. As a result, a CDO’s job tenure averages only 2.4 years.
Making the Right Hire
There are several challenges facing CDOs, but corporate culture, buy-in, and chain of command are the biggest to overcome from the outset. There can be no doubt, leading an organization’s data and analytics program can be difficult at the best of times. It’s even more challenging if stakeholders have low levels of data literacy, don’t understand the benefits that can be gained from being data-driven, or if they’re resistant to change.
Organizations that can understand these challenges, and are prepared to work with their CDOs on driving transformation or change, will be most likely to succeed. It does, however, take time, skill, and strategy. Before jumping in to hire a CDO, organizations must understand how this figure will contribute to their overarching business and transformation goals. Key considerations for organizations seeking a CDO include; how much technological expertise do we require? Who will they report to? How much responsibility will they have? What outcomes do we want to achieve?
There are three key considerations that stand out for business leaders to focus on when making this critical hire.
Customer Intelligence: An effective CDO should be able to develop a 360-degree view of customers and predict how best to optimize their experience. They will be concerned with customer intelligence initiatives around what's working and what's not while capturing and leveraging customer sentiments on external channels such as Twitter and LinkedIn.
Risk, governance, and compliance: The majority of CDOs originate from this function due to the huge priority it's been given over the past few years. Focused on making sure a company's data is accurate and secure, while also meeting regulatory compliance needs, a CDO should be able to work with legal departments and perhaps security teams to be successful in these areas.
New business models: Much like CEOs, CDOs must focus on maximizing profit, and this can be seen during the implementation of business process management and ERP systems. CDOs must work together with CIOs on implementing new solutions and technologies to drive return on investment (ROI), especially where data is involved.
Skills, Skills, Skills
Technical prowess, specialist knowledge, and change management expertise are all key characteristics for the CDO. But as the name suggests, CDOs must also have data skills at their core. They must de-silo people, ideas, and data – identifying opportunities to use data across an organization better.
Business leaders wanting to drive transformational change must fully evaluate the skillsets and attributes of their CDOs to ensure that their background and experience are the right fit for their organization. Being able to read, work with, analyze, and argue with data is fundamental to business success – with the ability to propel a business forward and reveal actual enterprise value.
Driving Transformation Change, Then What?
Transformation must be seen as a journey — not a destination. The same is true for the role of the CDO and broader digital transformation initiatives. In 2012, only 12% of Fortune 1000 companies had a CDO. Last year that rose to almost 68%. While the profile of a CDO is changing as expectations of the role mature, there can be no doubt that innovation and data will continue to be top priorities for organizations into the future.
Some believe the next natural step for the CDO role is for it to disappear altogether. After all, once data is fully integrated into a business and is driving value, what more is there to do? My view? We are not there yet.
CDOs play a critical role in stewarding data, something that organizations have struggled to fully leverage, protect, or monetize to date. While in an ideal world, data might be used more strategically across a business, most organizations will still require a champion to ensure transformation continues, at scale, while remaining relevant. That said, the CDO's role will continue to evolve as the workforce becomes more data literate, and customer demand changes. The basic principles of the role – centered around driving value from data – will remain the same, which is why it's critical to make the right initial hire.
Sharryn Napier, Vice President and Regional Director for Qlik Australia and New Zealand, wrote this article.
The views and opinions expressed in this article are those of the author and do not necessarily reflect those of CDOTrends.