Businesses continue to invest in their ability to analyse data. The worldwide business intelligence (BI) and analytics software market was an estimated $14.4 billion in 2013, according to Gartner.
This continues to grow as companies look at how big data can support their operations. At the same time, organisations are moving away from traditional BI and looking at new ways to make use of their data.
Why is this? The answer lies in how data is getting used by more people, for more decisions, more quickly. Line of business teams demand more access to data for their decision-making, yet this can be problematic for them to understand in context. This is especially true when you have multiple sources of information to bring together.
>See also: The rise and rise of the Chief Data Officer
IT teams within companies are responding to this requirement, while line of business departments are also sometimes choosing to go with their own products and services too. This represents a great opportunity to democratise access to data, but the challenge is to keep this use of data under control as well.
The main problem here is that managing data is harder than it looks. For line of business teams, awareness of how data should be brought in and controlled over time is not the first thing that comes to mind.
For them, the first priority is to get usable data now and answer their own questions quickly. In response to this, IT has to take a partnership style approach, helping them to get access to information rapidly, but also building out the data management side as well.
IT teams have the experience and knowledge to keep information resources up to date and well maintained; however, what is needed next is the understanding of the dynamics of the organisation.
The new position of the chief data officer (CDO) has been suggested as a way to bridge this gap between IT and line of business teams. This role should be designed to provide that long-term governance of the use of data as well as the understanding of business requirements.
It’s not a panacea, and it won’t be a good fit for everyone, but what the creation of a CDO position should bring is more focus on how data is used across the organisation.
This involves understanding how the company uses the data it already has, and how it will be used in future. Based on this insight, it’s possible to create a framework for how data is used and shared within the business more generally.
As more roles become data-driven in their approach, the CDO function should help that use of data be consistent. Not everyone that uses analytics can or will be a data scientist; however, developing a general level of ‘data hygiene’ best practices will be important.
To build this framework, businesses should look at a number of areas.
Firstly, how data is captured. Information can be captured from a wide variety of sources, but how it is combined is where the real value is created. Internal data can come from sales people or customer surveys, while external information can be gleaned from market reports and competitive analysis. Bringing that data together centrally is essential if it is to be used for decision-making; however, it relies on understanding the context in which that data will be used as well.
Secondly, how data is accessed. This can be more subjective, but it’s just as essential to know how data can be used to make people more productive. Executive and management dashboards for all corporate functions at the top of the organisation will need data in different formats to the actionable information around pricing and availability for the field sales force.
And thirdly, how much detail is needed. The ability to drill down into information is also important; spotting a potential issue and being able to do root-cause analysis is an essential skill for everyone to develop too. Again, a CEO or managing director may want to make the jump between a thousand foot overview and information on specific sales deals, as they can see the impact on pipeline; without the data being linked in the right way, it’s not possible to make this judgment properly.
At this point, it’s important to note the distinction that is potentially developing between the CIO and CDO roles. For CIOs, they are responsible for use of IT across the entire organisation; however, this does not extend to how the data within company applications is created, used and shared.
While the title of CIO often stands for ‘chief information officer’, many CIOs may feel this has actually become ‘infrastructure’ instead, as they concentrate on the existing IT resources that have been acquired over time.
The reason behind this should be obvious – it’s the complexity and scale of investment that has been made over time across enterprises. It is a full time job to manage these existing assets.
It’s therefore worth asking whether the CIO does take on the responsibility of how data is used, or whether it gets created as a separate position. Forrester’s George Colony refers to this being a second agenda for CIOs with a business technology infrastructure, rather than IT, and potentially with a different management level required.
As data becomes a more strategic company asset, the CDO role should be more concerned with the use and governance of data across the business. Alongside this, there is the practical element around responsibility and reporting. This position may be underneath the CIO, or part of a separate team; a lot of this will depend on existing company structure and approach.
Similarly, there may be the need to build out a ‘data support’ team for the business too. Just as the IT support function is there to help people within the company use IT and deal with issues, so the team behind a CDO can and should assist people in their use of data across the business.
This can include pointing out the most appropriate dashboards and visualisations for given scenarios, as well as where specific data tools are not as useful.
Looking into the future, businesses will become more data-driven in their approach. Ultimately, this comes down to the main objectives for all companies: managing costs, increasing customer value and dealing with competition.
For business intelligence and analytics, this should be based on providing greater value back to the organisation around these three points in a more nimble fashion.
Sourced from Brad Peters, Chief Product Officer, Birst