More and more enterprises understand today that the most profitable asset of their business is data. That’s why the newest title in the C-Suite is the CDO: Chief Data Officer.
As of 2018, almost 68 percent of Fortune 1000 companies have a CDO, yet according to Gartner, “the Chief Data Officer role is still new, untested, and amorphous.”
CDOs have a range of responsibilities including risk mitigation, governance, analytics (opens in new tab), and value creation. These requirements span IT, operations, finance, product development, customer service (opens in new tab), and more – because nearly every segment of the organization relies on or touches data. Recently IT industry watchers have noted a shift away from tasks requiring a defensive posture, such as cybersecurity and regulatory compliance, to an offensive posture, such as generating revenue from data, actionable business intelligence, and digital marketing (opens in new tab) improvements.
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Ken Grohe is President and Chief Revenue Officer at WekaIO (opens in new tab)
What’s more, the responsibilities vary from industry to industry. A prominent life sciences research facility notes that they can’t wait weeks or even days for results from their data when patient outcomes are on the line. On the other hand, financial services firms are laser-focused on using data in market insight and modeling to make forecasts in near real-time. In the automotive industry, companies feed data to AI and machine learning applications to advance autonomous vehicle technology.
The individual companies, and their CDOs, may have diverse requirements, but they all manage massive amounts of data, and their cultures and processes are shaped around it. Their growth strategy is built on it. The Googles, Facebooks, and Amazons of this world have showed us they can rake in trillions of dollars on data. Not every organization is at that level, but it demonstrates how data is the essence of a modern enterprise – and the CDO is the custodian of that valuable asset.
It’s not breaking news that data is valuable, but the increasing importance of the CDO role is a sign that enterprises are investing more in their data: AI and analytics to extract competitive edge from it, directly monetizing it, protecting intellectual property, improving efficiency to contain costs, and building internal systems around it.
So while the tech industry talks about high-performance data analytics or AI, the CDO is hoping to hear ‘here’s how our lives are going to be better from better decision making, faster innovation, and faster research to find cures to diseases that threaten human life.’ Yes, the infrastructure is important, the speed of execution is important, the results are obviously important – but that’s because the goal is accelerating time to answer, time to value, and improving business outcomes.
This is one key reason the CDO role is different than the traditional CIO role, which is ensuring the infrastructure and technology does not hamstring the organization or its workers. Entertainment studios can’t have performance bottlenecks that stifle their creativity. Biomedical research organizations can’t have sensitive information unsecured in the cloud or in flight. Companies with employees working from home due to COVID-19 need access to their applications and data regardless of location. So, while the CIO may be making decisions about how to best equip the company for its information deliverables, the CDO is focused on transforming information into new strategic value. These individuals should be working together in partnership for the benefit of the entire corporate ecosystem.
Another reason the CIO and CDO can no longer be interchangeable is scale – again, we are dealing with data sets in the petascale range, plus performance is an enterprise resource that must scale substantially. As the company headcount grows, support for worker IT needs must scale. As the customer base grows, those services must scale.
The reality is that the CIO is often so engaged in managing and planning IT systems, they can’t introduce new data-driven projects such as analytics or AI/ML, nor can their budget accommodate them. So, while the good CIOs have always been invested in leveraging information, and looking towards the future, most CIOs do not have that luxury. No matter how much you may want to write brilliant ML algorithms to gain insight, there’s too much other work to do.
In that sense we sometimes see CIOs managing legacy applications, the day-to-day workloads that keep the business in business, and CDOs managing newer applications that keep the business growing.
Companies have both a need to run their core operations, and a need to continually iterate. In data-driven environments, improving the infrastructure can help achieve better performance and the ability to develop new products and services, and strategically open new doors for the business. CDOs can “upskill” the company’s capabilities and find new ways to profit appreciably.
In these cases, the data strategy is the business strategy, and the CDO role should be to define and lead that strategy. I’m confident that more organizations will recognize that a savvy CDO delivers a return on investment, and as enterprise data stores grow, so do the returns.
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