CDO - A chief data officer (CDO) is a corporate officer responsible for enterprisewide governance and utilization of information as an asset, viadata processing, analysis, data mining, information trading and other means. (Wikipedia)
The race to drive competitive advantage and improved efficiency through better use of information assets is leading to a sharp rise in the number of chief data officers (CDOs). As a result, Gartner predicts that 90% of large companies will have a CDO role by the end of 2019.
“Business leaders are starting to grasp the huge potential of digital business, and demanding a better return on their organizations’ information assets and use of analytics,” says Mario Faria, research vice president at Gartner. “It’s a logical step to create an executive position — the CDO — to handle the many opportunities and responsibilities that arise from industrial-scale collection and harnessing of data.”
CDOs will face a number of challenges, to the extent that only 50% will be successful by the end of 2019. One challenge is that the role will be new in most organizations and most CDOs will be learning on the job. They will have the difficult task of creating an information strategy with relevant metrics that tie the activities of their team to measurable business outcomes.
“With the explosion of datasets everywhere, an important task is determining which information can add business value, drive efficiency or improve risk management,” said Mr Faria. “The CDO’s role will raise expectations of better results from an enterprise information management strategy, with stakeholders wanting a clear idea of the exact mechanics of making success a reality.”
The confluence of high expectations and limited knowledge around information management by business users can make it difficult for CDOs to get the budget and commitment from the business they need to make their plans a success. “This raises a political aspect to the role — building trust and relationships in the organization will be important to achieving success,” adds Faria.
Many CDOs already report high levels of change resistance, particularly from the IT department, over the control of information assets and their governance. Successful CDOs, however, are doing a great job of working with the CIO to lead change and overcome resistance.
“It’s important to account for the soft skills needed in the CDO role, whether you are applying or hiring for the position,” says Faria. “The success of a CDO will to a large extent depend on his or her ability to lead the change as well as gain the enthusiasm, support and resources of business leaders and other key business units.”
About 25% of Fortune 500 companies now have CDOs in place, and more are being hired every day, according to Glenn Finch, global leader for technology and data, IBM Global Business Services (GBS). To give companies a better sense of direction, IBM recently surveyed 37 CDOs from across healthcare, financial services, telecommunications, retail, and manufacturing organizations. This "on the ground" experience was combined with expert perspectives in an IBM study published Thursday that asserts that the addition of a CDO to an executive team supports greater focus and optimized use of data.
IBM's research finds that CDOs are being tasked to drive innovation and optimize use of data in five ways:
- Leverage - finding ways to use existing data.
- Enrichment - augmenting data by combining internal and external sources.
- Monetization - finding new sources of revenue tied to data.
- Protection - ensuring data privacy and security.
- Upkeep - managing the health of data under governance.
"CEOs are saying, "I don't want you to just move and store data better, I want you to figure out how to create a new business model,'" said Finch. "Every CDO we spoke to had at least one monetization request."
IBM's take agrees with Gartner's view of the CDO role, although the latter associates enrichment and monetization more with media and Internet giant CDOs and protection and upkeep more with banks, insurance companies, drug giants, and telecommunications companies. The latter have often seen that governance, compliance, discovery, and privacy challenges aren't being adequately addressed, as they've had instances in which they couldn't respond to regulators or were stung in legal cases in which they couldn't produce information subject to legal discovery.
Adapted from articles by Doug Henschen for Information Week, and an article posted by ITOnline