What is a Chief Data Officer? Everything you need to know about the CDO role

The Chief Data Officer is one of the newest executive roles. Here's what it does and why it matters.

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What is a Chief Data Officer?

A chief data officer (CDO) is a senior executive who is responsible for organisation-wide governance, management and exploitation of information. This data management and exploitation takes place through a variety of systems and services, including business intelligence, advanced analytics, data mining, and machine learning, and even artificial intelligence.

What are the responsibilities of the the Chief Data Officer?

CDOs should be on the look-out for ways to find opportunities for and through data analytics, whether that's predicting customer trends or finding new revenue-generating opportunities.

That data might be customer data, data gathered from Internet of Things sensors, social media, structured, or unstructured data; anything that the organisation gathers itself of buys in from elsewhere. The CDO must ensure the data is secured and maintained, but the role is not simply about deciding the technical aspects, like whether the information should be held in a data warehouse or a data lake or master data management. Instead, the CDO needs to help the business understand the value of this digital asset, enabling it to be mined for insights and competitive advantage.

Data might be the crown jewels of a modern enterprise, but many businesses don't necessarily manage their information successfully. That realisation, says analyst Gartner, helps explains why CDOs play a key role in helping organisations take care of the information they hold and use.

Ian Cohen, who is global CIO at transport specialist Addison Lee, says the dual role of data executives -- taking care of both governance and analytics -- is a critical management position in modern organisations. Businesses who do not appoint a data-savvy executive could create significant challenges for themselves. 

"If you're not the master of your data, you're bordering on being reckless, particularly in the current climate. It's essential to know what you did, what you learnt, and what you're doing about it," he says.

How quickly has the Chief Data Officer role risen to prominence?

The rise of the CDO has been rapid. Although a new role, research suggests the number of companies hiring a CDO has more than quadrupled since 2012. Gartner estimates 90 percent of large organisations will have a CDO by 2019.

Recruiter Harvey Nash and consultant KPMG report CDOs are already proving their worth. They report that organisations with a CDO, either in a dedicated or acting role, are more than twice as likely to have a clear and pervasive digital strategy than those without one (44 percent versus 21 percent).

Chief Data Officers are distinct from the other CDOs, chief digital officers. While chief digital officers are tasking with managing finite digital transformation projects, Chief data officers provide on-going guidance on data use. Teams that typically report to the CDO include analytics, data strategy, data science, data governance, and data architecture. CDOs often work alongside but independently of the chief information officer (CIO).

Who does the Chief Data Officer report to?

Such is the importance of the CDO role that a third report directly to the chief executive officer. Their work on information strategy also directly impacts how other c-suite executives, such as the chief marketing officer and chief financial officer, use data; as a result CDOs can also be found reporting to the CIO, CMO, and COO.

SEE: 60 ways to get the most value from your big data initiatives (free PDF)

Yet CDOs also face a number of challenges, to the extent that Gartner suggests only 50 percent will be successful by the end of 2019. The role is new and most CDOs are learning on the job. They also have the difficult task of creating an information strategy with relevant metrics that tie the activities of their team to measurable business outcomes.

How do CDOs ensure their data strategy takes hold?

Andy Day -- former Sainsbury's CDO, now group CDO at Pepper Financial Services Group -- told me back in June 2017: "Successful CDOs must do something different." Day suggested five elements are key to data-led transformation: organisational change, innovation and data labs, effective programmes of work, internal data talent, and board awareness.

Kevin Fletcher, CDO at HMRC, also advises other data chiefs to think of the influencers in their organisation and the allies that will help ensure their data strategy is embedded. Fletcher told me in March 2018 that incentives are important, as different people within the organisation will have their own motivations and requirements for information. He advises CDOs to act with humility as they aim to build a successful data strategy.

"We're all enthralled by the potential power of big data. That's great, because we need to create the energy within the organisation to make the most of information. However, you also need to be modest in terms of what you promise. A little bit of humility will help ensure everyone in the organisation comes on the journey with you," says Fletcher.

"It's great that I have the role of CDO within the organisation and it's great that everyone is interested in data. But you need to be clear about what the value is and what the timescale is to deliver those benefits."

Why is the Chief Data Officer role so important?

Data is increasingly the competitive differentiator between successful and unsuccessful businesses. Organisations that have a tight grip on their information and an effective data strategy can act with more confidence.

Insight on revenue and finance, for example, can provide a significant boost. Executives can be more certain that a key decision -- such as opening an operation in a new location -- is likely to be produce positive returns.

But control of big data isn't just about facts, figures and finance. Other departments can also benefit, particularly those -- such as sales and marketing -- that use qualitative insight to develop new customer services and personalised experiences.

Across all these elements runs one other crucial factor: security. New legal requirements -- such as the General Data Protection Regulation -- place tight constraints on the collection and exploitation and security of information. As part of their role, the CDO must help the C-suite build an effective information security strategy.

How do Chief Data Officers exploit data effectively?

Most leading organisations create a strategy that draws on a range of technologies. They bring structured and unstructured information together in a data lake. They then use a data platform to analyse this information through a range of cloud-based analytics tools.

Yet as consultant McKinsey recognises, the best analytics are worth nothing if they rely on bad data. To cite a commonly used adage in data science, if you put rubbish in, then you'll get rubbish out. Data executives create a strategy that ensures business data is reliable, consistent and secure. Their aim is to help their organisation create one single version of the truth.

SEE: Sensor'd enterprise: IoT, ML, and big data (ZDNet special report) | Download the report as a PDF (TechRepublic)

Take, for example, the work of Chris Spencer, intelligence and performance lead at Highways England (HE). His team has created a data-led app using technology from GIS specialist Esri UK that helps co-ordinate road improvement work. Locations with more than one programme scheduled during the next few years are highlighted.

"This had led to great effects," says Spencer. "By having everything on a map, the hard part is already done and it brings people together. If we reduce the number of schemes we deliver, we reduce the amount of works that are needed -- that also reduces the potential exposure of our road workers and road users to danger."

What's the future of the CDO role?

The amount of data being created -- and its importance to organisations -- is only going to increase. The global datasphere is expected to grow from 23 zettabytes (ZB) in 2017 to 175 ZB by 2025, says tech research analyst IDC. One zettabyte is equivalent to a trillion gigabytes.

CDOs, says Gartner, can play a crucial role in determining how the organisation uses new, existing, and legacy information assets. Additionally, the analyst says CDOs can lead the debate on digital ethics.

Such is the power of data that 68 percent of employers are looking to hire full-time data security/cloud computing staff this year, reports recruitment firms Hays. With their data leadership expertise, CDOs will be key to ensuring talent is found, supported and developed.

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