Chief Data Officers (CDOs): The New Business Leaders
IDC’s State of the Chief Data Officer (CDO) survey commissioned by Informatica found that CDOs are the new business leaders. (Traditionally, CDOs are senior executives who are responsible for data governance and management.) In the survey, nearly 60 percent of CDOs report to a business leader, and the most common organizational hierarchy structure is reporting into the chief executive officer (CEO). In addition, the primary stakeholders CDOs must collaborate with to ensure their success include business executives such as CEOs, chief financial officers (CFOs), chief operations officers (COOs), and chief digital officers (the other CDO role).
While the charter of chief data officers was traditionally focused on ensuring regulatory compliance, it has now expanded to empowering broad and consistent use of data to improve business outcomes. In fact, four of the top five key performance indicators (KPIs) for CDO success are business-oriented, including:
- Innovation and revenue
- Customer satisfaction and success
- Operational efficiency and excellence
- Productivity and capacity
Demonstrating Business Value With a Data Strategy
One of the best ways to demonstrate the business value that you as the CDO deliver to your organization is by creating a data strategy that is mapped to business goals, processes and outcomes. A well-thought-out data strategy is also one of the best ways to ensure successfully using data to improve business performance. This table provides examples of how to map the value chain of data, which you can use to demonstrate how data strategy will support business strategy and specific processes and analyses that are required by business initiatives:
A data strategy also helps you create a shared vision and understanding across lines-of-business, organizational functions, and individuals. It helps you clearly articulate “What’s in it for me?” to stakeholders, which is critical to changing culture and behavior. For example, if your CFO is concerned because days sales outstanding (DSO) has been increasing and negatively impacting liquidity and cash flow, you can show that
- Accurate inventory data improves accuracy of delivery-date quotes
- Accurate shipping data increases on-time delivery rates
- Accurate contact data decreases invoice delivery time
- Accurate tax data decreases invoice disputes
All of which will help your CFO improve DSO one of his key performance indicators.
One CDO that has demonstrated that he is a business leader first and foremost is Sri Mishra, chief data and technology officer at JDRF International. At the MIT CDOIQ Symposium, on August 19, 2020, Sri was presented with the award for Transformation of Collaboration from Inwards to Outwards. The award was given for his team’s work in using data and analytics to identify, segment, and better engage with donors, volunteers, and other supporters to accelerate JDRF’s mission to improve the lives of people with type 1 diabetes. Key mission performance benefits included:
- Productivity increases of 40 percent
- Click through rate increases of five percent
- Conversion rate increases of two percent
- Local volunteer-to-family-in-need match rate increases of 80 percent
To hear more about how JDRF uses data to accelerate mission outcomes, read the story here.
I would love to hear how you are leading your business with data. What best practices can you share with your peers? What business value have you been able to demonstrate?
The recognition that CDOs are business leaders is just one observation from the State of the Chief Data Officer survey. To learn more, download the IDC Infobrief.