Few would argue that information technology and data have become ingrained in nearly every aspect of today’s business. Along the way — in no small part due to mobile phone contracts — they now have a major presence on our lives as consumers.
Indeed, for some organizations today data has become such an explosive part of business that they have created a Chief Data Officer (CDO) position to reside next to the Chief Information Officer and the Chief Technology Officer. This evolution clearly acknowledges that data in the business setting is separate from the systems running it. Beyond that, it recognizes that data has a value that, if fully exploited, can help drive profitable business.
Emerging From the Shadows
For most of its history, data has been a shielded, hidden part of most businesses, too often lacking recognition as a value-add or business differentiator. Hard as it might be to believe today, for years it was typically the Head of Data Processing or the Data Processing Manager, who held responsibility for ensuring best data management practices across an enterprise. In practice, those roles, often very narrow in terms of responsibility, could only be held by folks with very technical IT backgrounds and experience.
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Then, sometime in the mid-80s/early 90s, the CIO role was created, in effect elevating a ‘computing person’ to the Board level for the first time. Still, data ownership fell into a gray area of overlap between a company’s IT and operations departments — IT typically responsible for integration and data functions, operations typically responsible for ensuring that integrations ran smoothly.
Finally, a few leading firms have introduced a new role that bridges the gap between IT and operations and takes overall responsibility for data management: the Chief Data Officer. Banking giant Wells Fargo, for example, just announced its first ever CDO to manage the bank’s enterprise data and analytics sector. According to Gartner, 25 percent of all large global organizations will have appointed a CDO by 2015.
The rise of the CDO is a testament to the growing importance that firms are placing on the value of data and data management across the enterprise. More than that, the CDO is giving data a permanent seat at the executive table.
Elevating Data to the C-Suite
For years, even forward-thinking companies were so focused on managing the volume and storage of data, they’ve neglected to really dive into how that information could be used to increase revenue and reduce costs. The CDO ensures that strategic importance of data is properly maintained and managed throughout the organization. Elements of that responsibility would include:
- Leveraging data as a competitive advantage: With access to detailed market information, customer data and predictive analytics, an organization’s CDO is in perfect position to identify ways in which this data can be harnessed. Think of an airline leveraging its data to predict a buyer’s price threshold on a particular day of the week.
- Legitimizing data: CDOs are also in position to help define and execute a data strategy that will drive their organization’s top-line grown. Establishing a uniform set of definitions, standards and governance practices will ensure consistency throughout an organization and enable informed business decisions.
- Inspiring change: 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. Pushing at the C-level for new technology investment is far more efficient than a bottom-up approach with data employees leading the charge for change.
- Identifying new opportunities: The CDO is well equipped to ensure the proper resources are in place to identify potential business opportunities. Think of a global retailer leveraging sales information to target a certain age group or income level with relevant product availability to drive increased purchasing and revenue growth.
Transformational Change
The rise of the Chief Data Officer is a transformational change that elevates the importance of data to the top of the organization. Giving the role of data management a seat at the C-suite table allows organizations to be transparent when it comes to the real cost components of data and the value that data can play in various parts of the organization. It’s a view that has long been missing from the corporate agenda.
Date: July 02, 2014