Why You Need a Chief Data Officer
If knowledge is power, hiring your company’s first Chief Data Officer (CDO) may be the shortest path to a competitive advantage. According to a recent article in Harvard Business Review, you hire a Chief Data Officer in order to compete with data.
However, ensuring that the CDO is successful isn’t always as easy as it seems. Chief Data Officers don’t always get the respect or resources that they deserve. That is why Gartner estimates that 90% of large global organizations will have a Chief Data Officer by 2019, but only half of them will be considered a success.
By 2020, 50% of leading organizations will have a CDO with similar levels of strategy influence and authority as their CIO, says Gartner. The global IT advisory firm points out that to be successful CDOs must “establish authority, secure budget and resources, and monetize their organization’s information assets”.
Chief Data Officers Are Getting More Strategic
Initially, the first generation of CDOs was more tactical than strategic. They were brought in to lead data governance and data management. However, CIO.com reports that the role of Chief Data Officer is transitioning into one focused on how to best organize and use data as a strategic asset. Yet there remains a disconnect. Many CDOs still don’t have the resources, budget, or authority to drive digital transformation on their own. As a result, often the CDO needs to help the CIO drive transformation across the company. In essence, the CDO is fast becoming the CIO’s corporate wingman.
Your Chief Data Officer Will Need Data Scientists
That first Chief Data Officer will likely need data scientists. Eventually, your CDO will also need a data lab and a data factory. A data lab is where you do longer-term, innovative, out-of-the-box thinking. A data factory is where you do more process-focused data analytics aimed at more immediate results.
Readying Leaders to Share the Data
Hiring your first Chief Data Officer also involves significant change management. Your leadership, divisions, departments, and teams will need to be prepared to share their information. The walls of organizational silos must come down. In addition, when the Chief Data Officer serves up actionable intelligence, leadership must be prepared, after all, to act. That action can bring about seismic shifts as your company morphs into an entity that is more competitive.
Start to Think about the Data
So how does a company begin its journey to hire a Chief Data Officer? Start to think about the data: where it exists and how it might be used. Ask yourself what entities capture data specific to your business. In my former career as an investigative journalist, I learned that virtually every time a person interacts with the government, a record is created: that’s data. Today, virtually every time we interact with an electronic device, a record is created — every time we turn on our cell phone, send an email, visit a website, or scan in our credit card at the corner store. In addition to the data that your company captures, there are other data that are available for acquisition. Think about all the insights the data might hold. (More on this later.)
According to David Simchi-Levi, professor of engineering systems at MIT and head of the Accenture and MIT Alliance in Business Analytics, big data analytics addresses four kinds of questions:
- Descriptive: Tell me what happened.
- Diagnostic: Don’t just tell me what happened, tell me why it happened.
- Predictive: Tell me what will happen.
- Prescriptive: Tell me how I can I make it happen.
But there is one last question that CEOs must ask themselves as they consider the implications of the tsunami of data that is now available.
Tell me what happens if one my top competitors hires a Chief Data Officer first?
Since knowledge is power, the answer is obvious. Your competitor will have gained a significant competitive advantage. That is why a growing number of CEOs are deciding the time for their first Chief Data Officer has come.