Four Challenges for Chief Data Officers

Four Challenges for Chief Data Officers

Posted on July 06, 2016 0 Comments

As organizations increasingly view data as a competitive asset, the role of the Chief Data Officer – CDO – is becoming far more formalized. Today’s CDO is viewed as the steward for “Data Ownership and Responsibility” across the enterprise, and organization’s as diverse as the City of Chicago, Yahoo!, and Citigroup all have CDOs. While there is some ambiguity in terms of the reporting relationship for CDOs across organizations – is it to the CEO or CIO – the need for the role and the challenges are fast becoming apparent as they provide both offensive- and defensive-line strategies.

We see four challenges every CDO must tackle head-on if they are to succeed:

  1. Establish the Firm’s Data Strategy and Direction: As the steward and owner of data within the organization, the CDO must lead the transformation to a “data-driven organization.” The CDO must be the evangelist who stimulates new thinking about the economic value of data and its importance as the foundation of decision making. At their best CDOs should ask and lead disruptive thinking on how data can be used within an organization.

    For example:

  2. Integrating Data Across Multiple Silos: Data today is the key driver of business performance and success. Today’s business executives want a unified 360-degree view of their data – a single screen to look at and evaluate the business. Whether it’s the CEO looking for data on corporate performance and shareholder value, the CFO on financial planning and reporting, the CMO on brand and market share, or the Chief HR Officer on employees. And that is perhaps the primary reason they see value in Chief Data Officers!

    As a CDO you can’t really assume responsibility for data within the organization if you don’t really know where it is or how to integrate it. But the fact of today’s organization is that data sits in multiple technical and business-driven silos. So marketing data sits in multiple brand and consumer databases, while the sales organization may look at retail store and regional sales data, and HR may have silos around employee hiring, benefits, performance, and retention. It’s not uncommon for consumer data to sit in 36 different brand marketing databases and a 360-degree view of an employee by HR may require referring to 10 different HR systems. The wave of M&A activity has only complicated the data integration challenge further. Wrangling or integrating data from multiple sources can take 80 percent of a data scientist’s time, and between 60 percent and 80 percent of the total cost of a data warehouse project may be spent on ETL (extract, transform, and load) software.

    Simply put, the challenge around data integration is just not tenable – and really the primary reason for the creation of the CDO role.

  3. Monetizing and Realizing Value from Data: One key benefit of viewing data as an asset is proactively looking for ways to monetize it. CDOs must lead this charge across their organizations, especially when it comes to using data to transform business models. Media organizations realized early that extracting value from intellectual capital they held whether it was in print, TV, film or on-line formats was critical to their survival. NBC, for example, unlocked 40 years of Saturday Night Live content via the SNL App. Dow Jones created an entirely new revenue stream via Factiva by enabling subscribers to search and query articles from over 36,000 licensed news sources.

    Retailers, too, are fast realizing that data on consumer loyalty and relationships, products, and suppliers far exceeds the value of their physical stores. This was brought home to them when they realized that their largest competitor was Amazon which did not own stores. They’ve realized that Omni-channel is all about recognizing your consumer in real-time, offering them the right products, and providing store associates with the right data to close the deal.

    This requires using data to run your business operationally versus just observing trends — a change in mindset that the CDO must lead!

  4. Data Security: While Data Integration and Monetization represent the CDO’s offensive line – security is where you’d better play defense. The price of recent data breaches for retail, banking, government and media industries has been extremely high. Examples of recent issues include Target Stores credit card data breach, Sony Pictures breach of employee and contract information, or the software glitch at the Democratic National Committee central database that allowed Bernie Sanders’ staffers to gain access to private Clinton campaign data!

    The vast growth of open source technologies where developers download software and use it even though it may not have adequate security or may not be installed correctly has really escalated this problem. As Information Age reported last year when MongoDB an open-source software provider faced a huge security alert after almost 40,000 of its customer databases were found unsecured on the internet including a French telecoms database with 8 million customer phone numbers and addresses.

CDOs must ensure that every piece of technology used within the organization is truly safe and enterprise ready if they wish to keep their jobs!

As organizations realize the value of data as a competitive asset, the role of the CDO as the leader of the data-driven transformation will only grow. Ultimately, they must lead their teams at winning the “data game” by playing both offense and defense!

Donald Soares

View all posts from Donald Soares on the Progress blog. Connect with us about all things application development and deployment, data integration and digital business.


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