Despite recognising data’s value and role in improved business performance, many organisations remain ill-equipped to deal with the data they currently have. Gaining access to as much data as possible is an admirable goal, however without people who know how to actually process and make that data actionable, the full potential of data will never be realised. It’s for this reason that Chief Data Officers (CDOs) have become so vital. Peter Jackson, Chief Data and Analytics Officer, Exasol, explains more.
Data is the lifeblood of an organisation, with over three quarters of IT directors worldwide claiming that it’s their most valuable asset. But while it’s clear that businesses recognise the potential of data and the role it can play in improving overall business performance and customer engagement, many aren’t investing enough in deriving true value from it.
Without the right people with the right skills who know how to govern, manage, process, interpret and make data actionable, the full potential of data will never be realised. And this can have a negative impact on financial performance.
It’s for this reason that the Chief Data Officer (CDO) role has become so popular in recent times. They’re quickly establishing themselves as one of the most valuable business leaders and senior executives in an organisation – skilled in both understanding data and how to apply insights to wider business operations.
The rise of the CDO
The first CDO was appointed almost 19 years ago by CapitalOne, largely in response to the passing of the Sarbanes-Oxley Act of 2002, which was put in place following a number of highly publicised financial scandals at the time. At that point, the role was primarily focused on compliance and data governance.
Since then, the CDO remit has expanded significantly. They’re now integral to overall business processes and performance, with Forrester finding CDOs to be present in 89% of companies that have systematically harnessed data to improve differentiation in the market they operate and have invested accordingly to optimise its use.
This exponential business impact and change is due to the level of responsibility and accountability the CDO has. Impactful CDOs lead the strategic direction of the company and understand and leverage data to support, shape and influence that strategy.
As a result, the promise of a CDO is that they can drive the business forward across the board – advancing innovation, operational efficiencies and revenue growth. Doing this relies on a breadth of knowledge and skills and relationships with every department, from HR and marketing to sales and finance. This breadth means they can develop a strategy and infrastructure that is built on every department having access to the data insights they need.
It’s this data-driven enterprise-wide approach that makes the CDO central to business success, and in possession of business skills that are rare for many executives to have. For example, they can look at core data and see how it can be used logically to improve business practices, they can sell the idea of change to stakeholders throughout the organisation and get them to receive it positively, and they can drive the transformation needed to truly be a data-driven business.
A champion for data
Many organisations currently lack a CDO, so it’s currently the CIO, CEO or Chief Digital Officer that leads the charge on data insights. For example, Deloitte found that 29% of companies had their CEO spearheading data analytics. However, the same research found 67% of business executives said they were not comfortable accessing or using data from the tools in their organisation and that they lack the skills needed to make actionable insights.
Although data is a new part of these C-suite roles, which already consists of many responsibilities, having a CDO that is a trained data strategist that can interpret data and make the best use of it is essential. A CDO is required to play the role of demystifying data and facilitating its use at a functional level, making data less scary and more open. A major part of this means ensuring that it is not only significant decision makers that understand the value of data-driven strategies but that every employee does. This is ultimately vital for driving real business change.
This way, data intelligence can be used to inform wider business processes and efficiencies, such as helping the marketing department to identify new customer demographics or supporting the security operations team with implementing a new way of working that is safe and secure.
CEO of the future
The unique positioning and responsibilities of a CDO to intrinsically understand every element of a business and plan for its future with the whole organisation on-board places these individuals as natural candidates for future CEOs. These are five reasons why:
- They are responsible for the management and use of an organisation’s most important asset: data. More specifically, CDOs are focused on demystifying data and facilitating its employment at a functional level to realistically leverage data insights for additional revenue stream generation and improved business processes.
- The benefits of their strategy positively impact every function within the business. The most impactful CDOs may even go a step further, recruiting ‘data citizens’ across different departments to make the tactical use of data more entrenched across the organisation. In doing so, they transform data from a confusing, gated asset into an open, useful tool, accessible and actionable to everyone.
- The impact of effective data analytics is realised on the top line (revenue) and bottom line (cost reduction and efficiency). In addition to applying data analytics to improve business processes and add new revenue streams, CDOs can further monetise data intelligence by selling it to other businesses to help them improve their efficiencies.
- A CDO needs to have working knowledge of every function within the business. To deliver effectively, they not only need to interpret data, but they also need to be aware of all department heads’ needs, serve as problem solvers, and continually work to bridge the gap between objective statistics and a company’s culture and values.
- They are true leaders with the ability to align an organisation to their vision of a data-driven business. Analysing core data to determine how it can be used logically to improve business practices is undoubtedly key, but what makes CDOs even more crucial is their role in successfully selling the idea of data-driven change to stakeholders throughout an organisation.
Many businesses cannot function without data analytics, but today we are seeing a broader range of organisations understanding the need to interpret and manage their data. CDOs are a critical element of modern business, and the most innovative and forward-looking organisations are recognising that the destiny of CDOs surpasses traditional role boundaries.
Given all they contribute to today’s digital business landscape, CDOs have a very real opportunity to become the CEOs of tomorrow, so the responsibility is on organisations and their executive leadership team to support them in this natural evolution. For businesses, the perfect candidate could be closer than they think which is why a great grounding in all of these skills can help to shape a data-driven workforce for the future.
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