Do You Need a CDO for Successful Analytics?
The C-suite is growing quickly as larger enterprises define more senior roles. Many of the newest roles are technology-based, such as chief digital officers, chief analytics officers, chief information security officers, chief automation officers, and more. As data becomes increasingly crucial to success in all industries, one of the fastest-growing new C’s has been the Chief Data Officer.
Three or four years ago, almost all the CDOs I knew of were in highly regulated industries and very focused on regulatory compliance. More recently, I’ve noticed a big uptick in Chief Data Officers in a wider range of industries, and while compliance is still part of that, the role is growing. More recently, the role of CDO is focusing on managing data for competitive advantage – particularly for modernization, digital transformation and new business initiatives.
InformationWeek wrote about the changing CDO role a few months ago, and laid out some of the arguments for growth and expansion. From Informatica’s vantage point, we certainly see the increasing trend toward digitization that has more and more companies focusing on data. To name just a few:
- Once considered a traditional telephony company, AT&T now describes itself as a “data services” company.
- GE is changing from an industrial company to a company that leases equipment and uses data and analytics to ensure that the equipment is running efficiently.
- MD Anderson Cancer Center is combining genomic data and operational data to provide highly-personalized approaches to cancer treatment.
- Jones Lang Lasalle is building data analytics into almost all of its services for finding, acquiring, and managing commercial real estate.
These kinds of business initiatives require great data to be successful. And increasingly, that data needs to come from a wide variety of sources within and outside of the organization.
The role of the CDO
The Chief Data Officer has to cut through all the data silos and fiefdoms that tend to lock up data within an organization, make data a shared resource, and align the data strategy with the business strategy. Beyond that, the definition of this very new role can vary widely. Effective CDOs will need to work with all the business units across the company to come up with a data strategy. They will also need to work closely with senior IT management and Architects to ensure that the technical systems being implemented support the data strategy.
The Chief Data Officer and Chief Analytics Officer have closely aligned, but distinct, roles. I went to a conference of CAOs a few months back and they were debating whether the CAO and the CDO should be the same person. The answer is an emphatic “no.” The CDO is responsible for far more than just analytics, and should be seen as a peer with related but distinct interests. Neither can be successful without the other.
Both the CAO and CDO support the business strategy, and the delivery of business value. The CDO creates the environment in which the CAO can derive the insights that grow the business. Therefore, the CDO and CAO must be able to translate business objectives into data needs—not only considering what data is needed to solve a problem, but helping the company to imagine what business value they could deliver if they did not have limitations around their access to data. Together, the CDO and CAO can innovate beyond the perceived constraints of the business’s environment.
Another crucial CDO relationship is with the Enterprise Architect. The CDO sets the data strategy for the organization. The EA is essential to help translate that strategy into an architecture that can implement the strategy, by both meeting the data delivery requirements of the business today and evolving at the speed the business requires.
Data strategy is crucial
It’s critical that the CDO defines a data strategy that supports the business strategy. That data strategy will include analytics, regulatory compliance, and more. While needs vary by company or industry, generally, the CDO must be focused on a data strategy that enables:
- New business initiatives and business models
- Digital transformation
- The inclusion of analytics in products, services, and operations
I once heard someone say that managing data is relatively easy—the hard part is managing the people. I agree, and it’s also the most important part of being a CDO. A Chief Data Officer must work across all parts of the organization to identify needs and opportunities around data, and to forge agreements for how data will be acquired, managed, and used.
So, do you need a CDO for effective analytics? The larger and more complex your data management environment is, and the more the organization is looking to use data to fuel their strategy, the more important a CDO will be to success and business value delivery. If you find that your organization is bogged down because various parts of the organization are “hoarding” their data, that is a strong sign that you need a CDO to help manage data as a corporate resource.