First we saw the introduction of chief information officers (CIO), and now a new trend is emerging for the addition of the position of chief data officer (CDO) to the C-suite of some companies. Experian has predicted that the CDO position will become a standard senior board level role by 2020, bringing the conversation around data gathering, management, optimization, and security to the C-level.
But do companies really need to add yet another executive to their board just to manage data?
A recent survey by Experian suggests that a full 90 percent of CIOs surveyed said that data was changing the way they do business, and 92 percent thought a chief data officer would be best-suited to be the guardian of data within an organization and determine data strategy.
But some still don’t see the need for a CDO. They believe that data is information and therefore belongs under the chief information officer in the org-chart. In my view, these naysayers are missing the big picture: Big data is no longer a tiny branch of business that can be ignored or thought of as IT’s problem. Data is an integral part of every single business department and system, and those organizations that refuse to see that are doomed to irrelevance in the very near future.
Personally, I believe that this inevitable shift in bringing the conversation around data to the top levels can only benefit any given company or organization. Regardless of a company’s verticals, data quality and optimization is key to the success of practically any venture.
The argument for a chief data officer seems obvious from where I sit. First, it makes sense to centralize decision-making and responsibilities for all aspects of data across an organization. In the past, accounting teams were often responsible for not just financial data, but all data by default. But finance professionals cannot be expected to understand, manage, or optimise non-financial data, nor be the stewards of data for every department including marketing, human resources, and supply chain. A CDO would oversee how an organization’s data is gathered, managed, protected, and monetized.
Another key function of the CDO would be security and regulations. Over the past decades, chief information officers have had to implement HIPAA, Sarbanes-Oxley, and other types of government regulations in the U.S., and even more stringent privacy protections in the E.U. and elsewhere.
In addition, customers and consumers are becoming more savvy and demanding not only greater protections and privacy, but greater control over their own data. Customer demands are likely to represent a real shift in corporate policy, as well. The same way we saw some companies bring customer service back in-house after the backlash around outsourcing to foreign countries, I believe we may also see companies tailoring their privacy policies and security to the demands of their customers. As the corporate compliance landscape becomes more complex, many CIOs envision passing on data security, privacy, and similar compliance issues to CDOs, who would be closer to the data architecture and implementation.
Finally, in my experience, a vast majority of companies are not making the best use of the data they already collect and store. Some hoard data indefinitely, racking up enormous data storage costs, while others miss major opportunities because they are collecting too small a sample or the wrong sorts of data. Some companies aren’t implementing a consistent, cohesive data strategy across all departments. Still others aren’t sure how to properly analyze or implement change from the data they do have. A CDO could take responsibility as point person to ensure that a company is making the most of its data resources.
Because that’s what data is fast becoming: a business asset that companies should be collecting, guarding, and profiting from. As a consultant, I can help companies develop and implement a data strategy that will return outstanding dividends for their bottom line. But continuing that process into the future requires a dedicated executive with a strong background and understanding of data who can guide the ship for the long term.
Bernard Marr is a bestselling author, keynote speaker, strategic performance consultant, and analytics, KPI, and big data guru. In addition, he is a member of the Data Informed Board of Advisers. He helps companies to better manage, measure, report, and analyze performance. His leading-edge work with major companies, organizations, and governments across the globe makes him an acclaimed and award-winning keynote speaker, researcher, consultant, and teacher.
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