Data and analytics leaders are fast becoming impactful change agents. Gartner estimated that 90% of large organizations would have hired a Chief Data Officer (CDO) by the end of 2019.
By Geoff Thomas, Qlik
While early CDOs focused on data governance, data quality, and regulatory drivers, today’s ones are tasked with unlocking data-driven innovation as well as integrating disparate data and analytics capabilities into a strategic discipline. Moreover, they need to achieve these while helping their companies to gain a competitive advantage.
Currently, both hype and confusion are surrounding the exact role a CDO plays. With CDOs yet to become fully established, there is an overlap with other roles such as the head of data management or head of business intelligence (BI). However, the next decade should see the CDO gaining strategic importance and taking a seat in the boardroom alongside the CEO, CFO, and CTO.
Meet the Different CDOs
No two CDOs will have identical mandates or responsibilities. To fully evaluate the extent to which a CDO’s skillset will meet the needs of an organization, it is essential to consider the various types of CDOs, where their focuses lie, and the company departments that they are most closely aligned with. These include:
- Customer intelligence: These CDOs are sometimes referred to as Chief Digital Officers and are closely aligned to marketing or sales. They are focused on developing a 360-degree view of customers and leveraging predictive analytics to optimize a customer’s experience. They will be concerned with the effectiveness of customer intelligence initiatives, on top of capturing and leveraging customer sentiments on external channels such as Twitter.
- Risk, governance, and compliance: These CDOs are focused on making sure that the company data is accurate and secure. Being closely aligned with business compliance initiatives also means these CDOs have backgrounds from legal departments or security teams.
- New business models: Much like CEOs, a significant proportion of CDOs focus on maximizing profit – a view supported by Gartner’s 2018 CDO survey which found that 45% of CDOs are mainly focused on value creation and revenue generation. In some cases, the CIO adopts the CDO role. However, a clear separation of roles is needed today, especially where data, as well as systems, are involved, and CIOs should work together with CDOs.
- Re-imagining processes: 28% of these CDOs surveyed by Gartner reported cost savings and efficiency to be their key mandate, with bottom-line improvements coming in second. These CDOs are most closely aligned to CIOs and CFOs and are focused on cutting costs, improving processes, and measuring effectiveness.
Being a Champion for Data Literacy
Having reviewed the types of CDOs that businesses can choose from, it is crucial to understand the main attributes this role brings to the executive table. Aside from possessing excellent data skills, CDOs must be responsible for raising the skill level of employees so they can achieve more with data and analytics.
When digital transformation is your goal, you should enable data literacy as widely as possible throughout your workforce, to all roles and all employees at all skill levels. With tens, hundreds, or even thousands of people exploring your data and uncovering insights, your business has exponentially more potential for transformation.
Gartner and Forrester both agree that the biggest stumbling block for successfully implementing data-driven initiatives is culture and literacy. This means that CDOs need to be able to broker conversations, fuel data literacy, and run initiatives for ‘data activists’ in the company to keep them stimulated and motivated to drive change.
According to Qlik’s Data Literacy Index, two-thirds of business leaders are looking to increase the numbers of data-literate employees. So, companies need to do everything possible to retain these people – empowering them to improve performance by ensuring they have the right data available.
On the flip side, a fundamental dilemma facing every CDO is how much data should be made available versus how much should be withheld to avoid non-compliance or regulation breach. Rules and regulations must be applied to manage this dilemma, with governance principals set by the CDO, so the brakes can be applied as required.
Fusing People Ideas and Data
Business leaders wanting to drive transformational change must thoroughly evaluate the skillsets and attributes of their CDO to ensure that their background and experience is the right fit with the business.
Those in compliance-driven positions will be guided by regulation and governance such as GDPR, with vigilance being a key attribute, whereas those in customer-centric roles will be focused on maximizing customer data to optimize the experience.
Most importantly, the one critical element that needs to underpin everything is data literacy. It is fundamental to business success and can reveal real business value.