Data Management Has a Place in the Boardroom, thanks to the CDO
“Data management is commanding a place in boardrooms through the Chief Data Officer,” says Poornima Ramaswamy, Associate Vice President, Enterprise Information Management & Analytics Practice from Cognizant. “Executives recognize the big impact of data on business outcomes. Data is getting its own strategy, its own office, and its own mandate.”
The two of us discussed the important data challenges and opportunities companies are facing today and the ones that are on the horizon, at the Informatica World Tour.
What are the top 3 changes you’ve seen in data management?
- The Digitization of Data: Executives are realizing they can no longer use an ad hoc approach to data management. They need a data strategy to capture data and leverage insights from it. The need for a data strategy is exacerbated by the explosion of data: more sources of data, a greater variety of data available, and the speed with which data is created.
- Chief Data Officers: This is an emerging role for organizations that are aspiring to become data centric, irrespective of the size of the organization or the industry it belongs to. CDOs are becoming the go-to source for enabling business decisions through the clever deployment of data.
- Data Governance: Organizations are heavily focusing on this area, with the responsibility now passing on to the CDO. They are investing in programs, councils and data management technology to support the process. Executives are recognizing that data governance isn’t just for risk and compliance anymore. Data governance is critical if you want to extract value from data to impact the top and bottom line.
You lead the “Office of the CDO” initiative at Cognizant. Let’s talk about this emerging role of the Chief Data Officer.
It’s exciting to see that data management now sits at the C-Suite level. This emphasizes the value of the role of the CDO for business. CDOs are change agents. They are driven by business priorities.
They own the vision, strategy and planning for all data-related initiatives. CDOs manage the information ecosystem, including data governance and data management.
Most importantly, CDOs educate employees on the power and possibilities of data. CDOs can map the organization’s data supply chain into a big-picture view of available data — who creates it, where it resides and who consumes it. They also show the way as to how insights can be gleaned from data to support both day-to-day decision making and strategy formulation.
To be successful, CDOs require sponsorship from the C-Suite and they must foster collaboration between business and IT.
Can you share some stats about the CDO role?
The CDO is one of the fastest emerging roles in the information management space globally, according to Gartner. Here are some statistics:
- 25% of large global enterprises will have appointed a CDO by the end of this year
- 60% of organizations need, or are in the process of hiring, a CDO or senior executive in charge of data
- By geography
- 65% are in North America
- 25% are in Europe
- 22% are in APAC
- By industry
- 45-50% of CDOs work in the Banking & Financial Services & Government industries
- Healthcare, Pharma, Retail are catching up
- 25% of the Fortune 500 have CDOs
- 2X more women are CDOs than CIOs
What’s the typical background of a CDO?
CDOs come from a variety of backgrounds. We’ve seen:
- 40%-45% emerge from business services
- 30-35% from data and analytics
- 20% come from technology background
Who does a CDO typically report to?
CDO reporting options depend on key business priorities.
- In businesses where regulation, risk management and risk mitigation are key business priorities, the CDO typically reports to the Chief Risk Officer or Chief Operating Officer.
- In businesses where digital and innovation are the key business priorities, the CDO typically reports to the Line-of-Business (LOB) Heads or even CEO.
The reporting relationships we’ve seen are aimed mainly at ensuring the CDO can drive data strategy to support the overall business strategy without being influenced or constrained by a specific LOB’s priorities.
Is there a common set of expectations for the role of CDO?
The CDO is responsible for transforming the organization to an insights and data-driven culture. The common CDO mandate across industries focuses on:
- Establishing a data driven culture with effective governance. Gain trust within the business community. Drive a sense of data ownership.
- Data stewardship by implementing data management strategies and standards. Institutionalize data quality management.
- Influence decision-making with quality data for analytics.
- Influence ROI through data enrichment and improved understanding of customers. Help the business deliver superior customer experiences.
- Encourage Innovation through experimentation and exploration of data
What are the most common challenges facing CDOs?
- Assigning business meaning to data
- Establishing and improving data governance
- Promoting a culture of data sharing
- Building new revenue streams, enriching and leveraging data-as-a-service
- Delivering Know Your Customer (KYC) in a real and tangible fashion
- Fixing legacy data infrastructure issues while investing for the future for big data analytics and data sciences
How would you characterize the relationship between the business and IT when it comes to data driven initiatives?
50% of organizations lack any formal structure to align IT investments with business strategy, according to the IT Governance Institute. Both IT and business executives are frustrated with IT’s ability to drive innovation, according to McKinsey & Company survey.
There is a need to focus on the business objective and not purely on an IT or technology envisioned solution. Also, there is a need to have a clear mandate from the C-suite on how IT will enable and help drive business objectives without becoming a hurdle.
On the other hand, it is also incumbent on business to treat IT as a partner at the table and not just an enabling and support function. Specific to data, this means business users have to be willing to look at data initiatives not only from a siloed LOB-centric view but also as a corporate asset.
What are the most common drivers you’re seeing for big data analytics initiatives?
Many big data analytics initiatives have a dual mandate of ‘Run Different’ and Run ‘Better’.
- Run Different initiatives are focused on improving customer intimacy, creating an omnichannel experience and enriching existing internal data with other data or data from across siloes to monetize data for top line growth.
- Run Better initiatives are both IT cost optimization and business process optimization.
Both these mandates are have some common drivers.
- Improving the quality of decision making through better planning and forecasting
- Increasing the speed of decision making
- Identifying opportunities for monetization of data
- Handling higher volumes of data and varied methods of data delivery
- Competing more effectively in the digital economy
Tell me about Cognizant’s Big Decisions initiative, which helps companies implement a data-driven culture and take advantage of advanced analytics.
BigDecisions is our Big Data Analytics Platform, a new approach to information management and analytics. It brings together almost all elements of the data-2-foresight value chain under one platform. It’s an integrated approach to using information for business decision making.
We have brought together Cognizant’s domain expertise, Informatica’s market leading data management technologies, and other industry players for analytics technology and cloud services like Microsoft Azure to offer integrated value, right from ingesting varied data sources to providing domain specific analytics capabilities.
In addition to standard analytical capabilities such as reporting, BI and interactive dashboards, BigDecisions provides advanced data sciences related algorithms used frequently for business functions like segmentation, prediction, forecasting and optimization through its data exploration and analytical workbench.
We have partnered with several product vendors for embedding analytical capabilities, the most prominent of them being the Microsoft Cortana Analytics Platform.
Any closing thoughts?
“Data is the new oil” is a cliché, but very relevant. I’d like to extend that further with, “Insights are the new energy”. To move from data to insights, we need to have three things in place:
- A strong data management foundation, preferably under a Chief Data Officer
- The right combination of platform and technology
- A sound data driven culture across the board
With these three pillars right, any organization can very successfully compete and lead the digital economy. These three pillars are also required for organizations to reach their goal of making data monetization a reality.
The bottom line is that CDOs play a very important role in a company that wants to leverage its data for strategic advantage. CDOs help their organizations move towards managing data as a strategic asset.
If you enjoyed the insights shared in this interview Poornima Ramaswamy from Cognizant, join us for an upcoming Informatica World Tour in a city near you.