Most businesses today realize that data is a critical asset on par with money, real estate, staff and accounts receivable. Doing business without data analysis is stumbling in the dark in the hope something will work out. And now more than ever it is clear that how data is used can make a difference between a company that lives on and flourishes and the one that withers and dies. That is why the role of a chief data officer (CDO) is so vital, and the business community is finally catching up to embrace this reality. According to Russell Reynolds, 50% of Fortune 500 companies will hire their own CDOs by 2015. This hike in numbers represents the importance of big data and managing it correctly.
A chief data officer is a corporate level professional responsible for enterprise level acquisition, use and management of data as an asset with the help of data processing, analysis, mining, information trading and so on.
In reality, the CDO is responsible for anything and everything to do with data. When it comes to standards of quality, security and reliability, transparency and trustworthiness of data – that is the domain of every CDO. Below is a more detailed list of what CDOs do in their position.
The professional duties of CDOs include:
Usually the CDO is in constant communication with the CEO. In an ideal situation, the CDO reports directly to the CEO, and/or to the chief strategy officer. It is important for the CDO to be on the same level as other execs not just formally, but in terms of authority and the right to vote and veto decisions, and have tangible power in the organization.
Sometimes this has to be enforced, because some execs may oppose change and meet the data intelligence based suggestions with hostility. ‘This approach has worked for years, so why change now?’ their attitude may be saying. Any CDO’s goal is the common good of the organization, and they have to be firm enough to make unpopular decisions while also being articulate enough to communicate to dubious audiences why the changes are critical to make.
All CDOs need a team, sometimes called the Data Management Organization (DMO), because the goals they face are ambitious and complicated. Everyone who works with data, building architecture, gathering data, processing and migrating data, dealing with information management, etc. works as part of the DMO, which is also always connected with the IT domain, and is in direct contact with data owners.
All client-oriented spheres that involve big data as the most valuable asset, will hire CDOs first of all. These already include finances (banking, insurance, capital markets firms) and government (national and international, but especially the US federal level). Information services and high technology are catching up, and it is only a matter of time when spheres like utilities and healthcare introduce the role across their organizations.
In the area of finances, a CDO is faced with complex challenges due to the rising reporting standards, increased exposure to business risks and tough competition in the field. The most vital goal is to reshape any organization into an information-centric enterprise where data is treated as a strategic asset.
Large financial organizations are multinational and are governed on a local basis. There is lack of consistence in information management, which is why CDOs must centralize efforts to harness data effectively by building effective bridges between offices. At the same time, data is often not homogeneous and is distributed between different parts of an organization, so another goal is to unify all this disparate data and organize it for intelligent business consumption.
Because often IT and business refer to different information assets in different ways, the CDO should develop a single information management glossary and organize semantics identification of critical enterprise data elements. Additional duties of CDOs in finances are drawing up information management budgets to stop wasteful spending; clarifying data context and making sure that data is interpreted keeping the context in mind; meeting regulations and requirements for data quality and controls while ensuring effective and timely reporting; driving the initiative to educate the financial organization about data assets.
Besides the aforementioned duties of CDOs, the data professional working in the federal sector should focus on security. Governments are often criticized for being too invasive in their effort to ensure data security, holding many manufacturers liable for the products that breach security protocols. Maneuvering between the goals of ensuring security and allowing for privacy and policy transparency is the biggest challenge of federal CDOs. Predicting future threats by analyzing big data and keeping security processes agile and constantly evolving with the changing security situation is another important role of CDOs working in governmental organizations.
Today 65% of CDOs are in the United States and 20% are in the UK. Because the American economy is a trendsetter and IBM in particular has emphasized the role of the CDO in recent publications, it is clear that more organizations will be quickly snatching the best specialists for the position. There are already CDO positions in over a dozen countries, and their number is constantly growing.
Heavily regulated industries have already hired CDOs and extensive DMO teams to cope with the demands of the big data age. But it is now clear that those changes will not be limited to finances, government, IT, high tech and healthcare sectors, but will spread across all organizations striving to make intelligent decisions. It is safe to say that any organization that wants to march in step with the times where big data is a game changer, needs to consider hiring a competent CDO as soon as possible.