Once upon a time, data knew its place. It sat locked in big data warehouses, all nicely structured, and you could only get to it on a need-to-know basis. Life was simple: most of us didn’t need to know. Then the world got social and data exploded—it was everywhere.
Companies found practically overnight that their brands were being talked about, whether they liked it or not. This type of unstructured data is of such magnitude that it now has its own term: “Big Data.” Businesses and governments across the globe are coming to grips with how best to manage and even monetize their data assets. Some are even reimagining what their business model is—with data front and center. This requires fresh thinking, and it also calls for a new role. Step forward the Chief Data Officer, or CDO.
Years ago, CDO might have stood for such unpleasant things as a central dense overcast (the middle of a tropical hurricane) or collateralized debt obligation (the scourge of the finance world that would shake the economy in the 2000s). In today’s world, CDO stands for Chief Data Officer, the executive tasked with wielding data to make better decisions, improve the customer experience and deliver new revenue opportunities.
Current CDOs can recall that distant era when data was merely a sideshow for many. “I remember thinking in one of my MBA classes: why are you teaching me this? I’m never going to need to know about databases. Jump forward 20 years, and I couldn’t have gotten that more wrong,” recounts a CDO from the United Kingdom, interviewed in the IBM Center for Applied Insights study, Your chief data officer: Re-imagining the business of data.
And never mind witnessing progress over the course of twenty years—how about a single year? Last January, Gartner forecast that 25 percent of companies would have a CDO by 2015; just a few weeks ago, Computer Weekly reported on research sponsored by Experian that shows 61 percent of CIOs at large organizations want to recruit a CDO in the next 12 months. It would appear that an aspiration for some is developing into a reality for many.
Consistent with these rising numbers is the proliferation of the position in Europe, somewhat of a late-comer to the CDO party. The CDO position is still most popular within the United States, but other areas are beginning to catch up. As Gartner has noted, CDOs are becoming more commonplace in European banks, as institutions such as Clydesdale Bank, Credit Suisse, Royal Bank of Scotland and Yorkshire Bank now all have the position. It makes sense that banks would be among the early adopters of the CDO role, given that information is often the key to competitive advantage in their industry. Their adoption, however, may also signal an increasingly widespread European acceptance of the role.
In fact, the role in Europe has reached a level of prominence high enough to warrant international discussions. In October, over eighty Chief Data Officers and senior data experts will reconvene for an annual forum in London to address the challenges and responsibilities of their title. The IBM Center for Applied Insights has been having similar conversations in its research.
“I am bringing a lot of clarity and uniformity to the table when it comes to measuring business performance,” says a data leader from the Netherlands that the Center interviewed, adding “any project we do, we do for a reason, and we do it for a reason we can measure.”
As the Center’s report details, CDOs have a multifaceted and significant role. To be successful and, by extension, provide value for their companies, CDOs need to envision a data strategy that activates real change for their businesses, all while transforming the culture within their walls into one that embraces the power of data. According to the study cited by Computer Weekly, CIOs agree with these goals: 90 percent think data is transforming their business, and 92 percent think a CDO should define data strategy and take responsibility for data quality.
Of course, there are still challenges associated with adopting a CDO. Of the CIOs surveyed in the Experian research, 47 percent said that substantial volumes of data were a barrier to recruiting a CDO. Costly investments and general fear of change can also scare off companies, aware that a fresh CDO might want to enact novel measures. Plus, “there is still the perception of: What does a data officer do that IT can’t,” explains a Director of Finance and Operations from the United Kingdom, another one of the interviewees from the Center’s study.
But, as the Experian research indicates, there certainly are benefits to having a CDO to usher in a new era of advanced data collection and use. Capitalizing on big data opportunities, providing a consistent approach to de-risk data-driven projects, and coping with increasing regulation were just three of the areas where CIOs see their potential C-suite comrades contributing.
“I was brought in really to change the way that the business works, moving us from an intuition-based organization to hear what the data is telling us and help the business understand the commercial value data can bring,” says a CDO from the United Kingdom. There will likely be more CDOs joining this one in the coming months and years. Eventually, the acronym won’t even have to be explained, and neither will the value that CDOs bring.