The New and Evolving Role of the Chief Data Officer
More and more companies today understand that data is the most profitable asset of their business. That’s why the newest title in the C-Suite is the CDO: Chief Data Officer.
As of 2018, nearly 68 percent of Fortune 1000 companies have a CDO, but according to Gartner, “the position of Chief Data Officer is still new, untested and amorphous.”
CDOs have a range of responsibilities, including risk mitigation, governance, analysis and value creation. These requirements include IT, operations, finance, product development, customer service and more – because almost every segment of the organization depends on or touches data. Recently, IT industry viewers have noticed a shift from tasks that require defensive attitudes, such as cybersecurity and regulatory compliance, to offensive attitudes, such as monetization of data, actionable business intelligence, and digital marketing improvements.
In addition, responsibilities vary from industry to industry. A leading life sciences research facility notes that they cannot wait weeks or even days for results from their data when patient outcomes are at stake. On the other hand, financial services companies are focused on using data in market insight and modeling to make forecasts in near real-time. In the automotive industry, companies are pushing data into AI and machine learning applications to advance autonomous vehicle technology.
The individual companies and their CDOs may have different requirements, but they all manage vast amounts of data and their cultures and processes are formed around it. Their growth strategy is built on it. The Googles, Facebooks and Amazons of this world have shown us that they can bring in billions of dollars in data. Not every organization is at that level, but it shows how data is the essence of a modern enterprise – and the CDO is the custodian of that valuable asset.
It’s not news that data is valuable, but the growing importance of the CDO role is a sign that companies are investing more in their data: AI and analytics to gain competitive advantage, monetize it instantly, protect intellectual property , reduce costs to improve efficiency and build internal systems around it.
So while the tech industry talks about high-performance data analytics or AI, the CDO hopes to hear ‘here’s how our lives will get better through better decision-making, faster innovation, and faster research to find a cure for diseases that threaten humans. . life.’ Yes, the infrastructure is important, the speed of execution is important, the results clearly matter – but that’s because the goal is to speed up the time to respond, the time to get value and improve the bottom line.
This is a major reason why the CDO role is different from the traditional CIO role, which is to ensure that the infrastructure and technology does not interfere with the organization or its employees. Entertainment studios should not have performance bottlenecks that stifle their creativity. Biomedical research organizations should not have sensitive information unsecured in the cloud or in flight. Companies with employees working from home because of COVID-19 need access to their applications and data regardless of location. So while the CIO may be making decisions about how best to equip the company for its information products, the CDO is focused on turning information into new strategic value. These individuals should work in partnership for the benefit of the entire business ecosystem.
Another reason the CIO and CDO may no longer be interchangeable is scale – again, we’re dealing with datasets in the petascale range, plus performance is an asset that needs to scale significantly. As the workforce grows, support for employees’ IT needs must be scaled. As the customer base grows, those services need to be scaled.
The reality is that the CIO is often so busy managing and planning IT systems that they cannot introduce new data-driven projects, such as analytics or AI / ML, nor can their budget accommodate them. So while the good CIOs have always invested in harnessing information and looking to the future, most CIOs don’t have that luxury. No matter how much you want to write brilliant ML algorithms to gain insight, there is too much other work to do.
In that sense, we sometimes see CIOs managing legacy applications, the day-to-day workload that keeps the business running, and CDOs managing newer applications that grow the business.
Companies have both the need to perform their core activities and the need to constantly repeat. In data-driven environments, improving infrastructure can help improve performance and the ability to develop new products and services, and strategically open new doors for the business. CDOs can “hone” the company’s capabilities and find new ways to profit significantly.
In these cases, the data strategy is is the business strategy and the CDO role should be to define and lead that strategy. I am convinced that more organizations will recognize that a smart CDO delivers a return on investment, and as business data stores grow, so do returns.