Chief data officers (CDOs) have been around for more than a decade, but the role has undergone its most dramatic transformation over the past two years. Early on, the CDO was a fairly niche position focused on regulatory and compliance demands. CDOs were most commonly found in highly-regulated industries like finance, healthcare and the public sector.
Very quickly, the CDO has gone from a specialised role to a must-have leader. A recent Forrester survey found that 51% of organisations had appointed a CDO, with another 18% planning to do so. The research shows this is an across-the-board hiring trend with consistent results across mid-market and enterprises. And, two-thirds of the CDOs were appointed in just the past two years.
So, why has there been such a dramatic uptick in CDO hiring? The answer lies in the increasing maturity of data efforts.
When the term “Big Data” first began to dominate headlines, data initiatives were most often experimental, small in scale and separate from core business drivers. The data itself had the potential to be big, but the returns from investment in data were not, particularly outside of technology and Wall Street.
Now, data analytics, machine learning, artificial intelligence (AI) and IoT initiatives are driving significant revenue for organisations in all types of industries. This has contributed, in part, to a movement to value data just like any other strategic asset a company holds. In his book, “Infonomics: How to Monetise, Manage, and Measure Information as an Asset for Competitive Advantage,” Doug Laney, research vice president and distinguished analyst at Gartner, makes the case that all organisations should be treating data like a valuable business asset.
Insights from data = profits
This shift to managing data like a revenue-generating asset can be seen across the business spectrum. Microsoft bought LinkedIn for $26.2 billion in 2016, and much of the justification for that large price tag was the immediate access to the data of LinkedIn’s more than 433 million members.
And recently, the CDO of Starbucks, Adam Brotman, was appointed as president and CEO of J. Crew. While CDO to CEO moves might not be a widespread trend (yet), what’s clear is that the ability to tease value from data is closely tied to the strength of the business. The CDO role has risen to match.
So, what does a CDO do?
While individual business leaders are still responsible for data within their departments, the CDO facilitates data exploration, the sharing of best practices and knowledge across the organisation.
The new breed of CDO is focused on maximising the value of data. But of course, “value” is unique to every organisation. In many banks, value maximisation corresponds to protecting the institution from regulatory fines and external threats.
In technology firms like Salesforce, which pioneered software-as-a-service, data is critical to improving products and innovating on new ones. Salesforce has more than 60 data scientists focused on product, and CDO Hernan Asorey has to ensure these data scientists are getting the most current and useful data possible. With more than 500,000 data objects at their disposal and huge growth in both organic data (user and product data) and inorganic data (acquisitions), ensuring the data scientists can quickly find high-quality data is core to Salesforce’s business.
Wolfgang Hauner, CDO of Munich Re, one of the world’s largest reinsurers, faces different hurdles to maximising the value of data. Munich Re uses data analytics to insure risks for customers on just about everything, from natural catastrophe to cyber security and even GDPR.
Munich Re began leveraging big data and analytics in 2015 to great results, and Wolfgang and his team quickly realised that to generate more value, they needed data in the hands of more users, not just analysts. For Wolfgang, the goal is to create a self-service analytics environment where more people can make data-driven decisions.
And of course, not every organisation is profit-driven. The City of San Diego has been named the nation’s top-performing data-driven city on the back of its award-winning projects, such as its StreetsSD street maintenance initiative.
For the City of San Diego’s CDO Maksim Pecherskiy, the goal has been to fulfil the City’s commitment to open data, focused on improving the democratic process through the sharing of information with the public. Maksim also must ensure that all of the City’s 11,000 employees and 35 separate departments can leverage diverse sets of data and systems, including relational data residing in multiple databases, geospatial data and data from IoT devices, like smart parking meters.
The future of the CDO
While the term “Big Data” doesn’t get used as often as it did a few years ago, that is not because data has lessened in importance, concludes Satyen Sangani, CEO of Alation.
Data analytics, data science, AI and machine learning are all generating real revenue and business impact for companies of all kinds, helping them build better solutions, solve tougher problems and serve their constituents better. That trend will only continue as long as CDOs and data leaders are able to ensure their organisations maximise their use of data.