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The data explosion has led to a significant increase of investment in big data projects. Many companies are looking at the data they are collecting in an entirely new way. Data is now recognised as an asset that can be leveraged to tap into new sources of business value.
According to MHR analytics, more than three quarters (76 per cent) of UK companies implemented at least one Big Data project during 2017. This figure will undoubtedly continue to grow year on year as slower-moving businesses come to recognise the central role that data can play in their success.
More innovative companies are already investing in efforts to establish a company-wide data focused culture. This situation means the role of Chief Data Officer (CDO) is becoming increasingly important. Without a clear strategic vision on what to do with hundreds of terabytes of data, companies can quickly get bogged down in the details.
The Value of a CDO
Commenting in The Chief Data Officer’s Playbook, Henric Jogin, Technical Director at IDG Sweden, offers a clear explanation of the value and necessity of having a capable CDO behind the wheel of ongoing big data projects:
“The Chief Data Officer is the voice of data within a company and represents data as a strategic asset. Company data is very valuable. In fact, one could argue that there is a very real exchange rate between data and profits, whether you use data intelligently to increase efficiency, increase sales or create new new business opportunities entirely. Deeper insight into customer relations, decisions, the market and so on is of tremendous value. To empower IDG Sweden by giving us that insight in an actionable manner – through technology, workflow, visibility, and compliance – is my ultimate goal,” he said.
The specific applications of data will vary widely from business to business, but it is clear that in order to get ahead in today’s markets, it is an asset that needs to be used wisely.
Origins of the CDO
The role of the CDO is relatively new. In the past, data was very much a secondary priority for most companies. Responsibility for data was commonly relegated to the purview of data architects and analysts. In most instances, these early data proponents did not get a seat at the executive table to state their case about the potential value locked up in company hard drives.
But eventually, a variety of use cases provided unmistakable evidence of the power of big data.
Executives around the world soon caught on to the power of data as a corporate asset. However, figuring out how to use data to deliver tangible results is not straightforward. Therefore, many companies struggled with how best to organise around data – as an activity, a business function, and a capability.
In response to the challenge, a number of leading companies came to the realisation that a new organisational role was needed: the Chief Data Officer (CDO).
The first corporate CDOs arose as a direct consequence of the financial crisis of 2008-2009. The initial factor driving the appointment of CDOs was a response to increased regulatory and compliance reporting demands. This was particularly true in banking and financial services, where new regulatory requirements necessitated greater scrutiny of data quality, data accuracy, data transparency, data privacy, and data reporting.
There were tangible consequences to be paid for not “getting the data right.” Financial services CDOs were mandated with managing the regulators, ensuring reliable data quality and transparency, and making sure businesses were on a firm footing from a data and reporting perspective. Given this situation, the first generation of CDOs primarily played defense.
However, this quickly began to change as companies learned how to leverage their data to improve efficiency and identify new business opportunities. Rather than just keeping on top of compliance, CDOs began making significant contributions to profit margins.
Chief Data Officers and the Age of Information
The ongoing data explosion doesn’t show any signs of slowing down.
As previously highlighted by Henric Jogin, the CDO has now become a key player in most large companies. Developing and managing a comprehensive data strategy is essential to keep up with the rate of change in modern business.
Such strategies require strong leadership and direction from a CDO. However, as business processes continue to grow increasingly complex, the role and responsibilities of the CDO will change and evolve.
While we don’t know exactly what the future will hold, this does not mean there aren’t proven guidelines on what constitutes effective data strategy and management. The Chief Data Officers Playbook is a resource designed to help current and aspiring CDO’s build an understanding of all facets of the role. Featuring contributions from thought-leaders in the world of data, the book covers the secret ingredients of the successful CDO and offers pragmatic guidance on how to avoid the hype cycle which has sprung up around big data technology.
When they take their position in a company, CDOs need to manage the expectations of others in relation to what can be achieved with data in a given time period. As the book explains, a failure to do so may result in the initial high hopes of the organisation falling into a “trough of disillusionment”. Ideally, CDOs should aim to deliver incremental improvements over time. Building a data-focused culture within a business cannot be done overnight.
Authors of the book, Caroline Carruthers and Peter Jackson, are practising CDOs themselves and put the publication together using years of first-hand experience. The pair appeared on a recent episode of Venturi’s Voice podcast to dispel some common misconceptions about the role and discuss the future direction of big data technology.
Regardless of how the CDO role evolves, the value of data will not diminish any time soon. As companies continue to increase their investment in big data projects, the onus is now the CDO to deliver an ROI and open up doors to new business opportunities.
The CDO is fast becoming a vital organisational linchpin.
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