Data and technology are two very different things. That’s why each needs a different approach.
Technology is managed by a Chief Information Officer (CIO) or chief technology officer (CTO). However, a chief data officer (CDO) is the person who liaises between the IT department and the business side of an organisation.
Just a CTO in disguise?
Chief data officers’ job descriptions vary by business and geography and have evolved rapidly over time.
In the early days, when CDOs were just emerging, much of their role was about data governance and regulatory compliance.
Some people thought the CDO was just a chief information officer in disguise, but others quickly agreed that data and technology needed different skill sets.
The span of control and ownership of CDOs’ functions quickly grew to include data security, privacy and analytics.
Recently, new roles such as chief information security officers, chief privacy officers and chief analytics officers have emerged to meet this need.
Chief data officers are now largely found leading data strategy and data stewardship – ensuring an organisation’s data governance and usage is managed to best practice, while actively seeking out new, innovative and profitable uses of that data.
Garbage in, garbage out
Companies often want to jump straight to the exciting part at the end without first laying the right foundations, such as ensuring data quality.
This is one of the biggest challenges for CDOs, because if the data is not of good quality and accurate, it’s of no value to the business.
Many corporations know more about the value of their car parks or boardroom table than about the value of their data.
It’s not represented anywhere in the company’s balance sheet, although perhaps it should be.
A New Zealand perspective
Historically, there’s a list of NZ businesses which have boldly charged into new territories (notably Australia) to ‘plant their flags’ – only to have them shredded and see the flag-bearer return wearing the battle scars of defeat.
There are similar stories of businesses failing in their own domestic market segments.
Any misplaced beliefs that the view “in God we trust – everyone else, bring data” would see them through, have long since vanished.
Today, it’s estimated that 60% of New Zealand business-to-consumer corporations have adopted net promoter scores as their leading success metric.
Most of these companies have created data management and monetisation capabilities to enhance enterprise functions, strengthen their competitiveness, and create new sources of revenue.
Underpinning this is a growing hunger to achieve strategic revolution.
To achieve this, someone must lead the strategic data activities and represent data as a strategic asset – and this is where a CDO role comes in.
The CDO reports to the chief executive on core fundamentals and business growth initiatives, often measured by:
- Creating a data-driven corporate culture.
- Setting up a corporate enterprise-wide data strategy.
- Lowering costs.
- Creating additional, new revenue streams.
- Reducing fraud.
- Managing complex data projects, such as artificial intelligence (AI).
- Lifting profits.
Chief data officers’ duties can also include ensuring the company complies with all regulatory mandates, while continually enhancing data governance.
Perhaps largely due to regulatory pressures, financial services firms have taken the lead in appointing CDOs.
It’s also a trend among companies in other industries dealing with huge amounts of data, like retail, healthcare and government.
Fad or fixed role?
Even today, some corporations expect too much from their CDO or set murky priorities for them.
This could, in part, be driven by a lack of knowledge, experience, skills and understanding of the CDO role by the CEO or the board.
The data strategy needs to be aligned with the company’s core strategy.
In the absence of knowledge at a board or c-suite level, who then is qualified to sign off on this, or ask the CDO the hard questions?
A major challenge for CDOs is legacy issues, especially because the average tenure of this role is around two-and-a-half years.
The corporate landscape in NZ is littered with’ legacy companies’, those which evolved through acquisitions, which have legacy systems or legacy data environments.
Typically, as volumes of data increase exponentially each year, a firm has a limited appetite to invest in the large-scale change needed to address the mishmash resulting from being a legacy entity.
By global standards, the CDO role is relatively new in New Zealand and corporations are still trying to work out how best to position them.
Consequently, some companies expect the impossible from their CDO.
There are examples of ‘domestically grown’ CDOs struggling to sell their accomplishments to a business audience because they just don’t speak the same language.
On the flip side, there are examples (admittedly, fewer) of CDOs with global experience who have cemented their roles by ensuring data analytics and AI are included in their remit.
This is because it’s easier to show value in these areas than in data management.
To be or not to be a business with a CDO?
Businesses are continuing to adjust to hybrid work locations and schedules, and there are challenges. How do you protect data when employees are outside the office – when the office doesn’t exist at all.
No company is immune to this, nor to the impacts of technological, social or economic disruption.
The pressure is on businesses – and those who want to win will have a CDO in the team. It makes a lot of sense. The data tells us so.