The Evolving Role of the CDO
Who drives the big data and AI strategy at your company? Surveys show that many of the biggest and most analytically advanced companies are increasingly turning to chief data officers (CDOs) for leadership and guidance of these strategic initiatives. However, CDOs face several challenges when it comes to succeeding at the job.
When the CDO role started to gain traction in the early 2000s (Capital One is said to have had the first one, back in 2002), CDOs were largely responsible for defensive aspects of the data, such as ensuring the security, privacy, and accuracy of the data. Minimizing risk and keeping mistakes at bay were the main focuses of the CDO.
However, as more firms added CDOs and the tech landscape evolved, CDOs are increasingly finding themselves moving up the stack and having a greater say in how to shape the pointy end of the back data stick. That means using advanced analytics and AI techniques for offensive purposes, such as growing revenues, boosting profits, and improving customer satisfaction.
For some good insight into how the CDO role is evolving, one source is New Vantage Partners‘ Big Data and AI Executive Survey. This survey, which has been taken annually since 2012, focuses on assessing the current state of big data and AI projects and investments at a handful of large firms. This year’s edition reflects the cumulative viewpoints of senior IT executives at 63 companies, a record for the series.
Back in 2012, only 12% of surveyed firms reported having a CDO on staff. The 2019 survey found that CDOs are in place at nearly 68% of the companies surveyed, or nearly two-thirds of firms. That figure has more than doubled from 2017, when just 32% of survey respondents reported having a CDO at their firm, according to the New Vantage survey.
It’s worth noting that New Vantage’s survey is heavily skewed toward financial services, with participation from top executives at dozens of the largest banks and insurance companies in the world, including Citigroup, Credit Suisse, JP Morgan, UBS, and others. Financial services firms are traditionally the most heavily invested in information technology and BI among all the industries, and have been the biggest users of emerging big data and AI technologies.
While the 2019 survey brought a surge of input from the healthcare industry, CDOs are probably not in two-thirds of all industries – at least not yet. However, with the recent rule requiring all Federal agencies to hire a CDO by August 2, there is definitely pressure to hire CDOs.
So, what are all these newly minted CDOs doing? CDOs have a mix of responsibilities, according to the 2019 edition of the New Vantage survey, which you can view here.
The “defense” side of the data management coin is still well-represented in the survey, authors Tom Davenport and Randy Bean wrote in the forward of the paper. “Virtually all respondents agree that data privacy and cybersecurity are important priorities, and 56% said the same for ‘data ethics’ — probably not even a concept that anyone would have mentioned a decade ago,” they wrote.
However, just protecting data isn’t really enough for CDOs these days. Neither is ensuring that the proper data models and data governance structures are in place, Davenport says in this recent Forbes article. “In the CDO job, just working on improving the internal data environment—in general or preventing problematic events—is like a cake with no icing,” he writes.
To keep stakeholders happy and keep the big data investments moving, Davenport – who is a well-respected though-leader in the analytics business, with a list of current positions so long that we literally can’t print it here — recommends that CDOs should spice up their data work with more offensive oriented projects, like AI, machine learning, and other forms of advanced analytics designed to improve customer satisfaction or business efficiency.
As more CDOs are appointed to companies around the world and the position goes mainstream, the responsibilities associated with the job will also adapt to keep up with the changing opportunities and challenges associated with data.
According to Richard McElroy, the leader of Calabrio’s Center of Excellence for Analytics, the CDO role will become “a unifying factor” between general data policies and strategies. “We are seeing the role further evolving from a pure regulatory focus to mainstream, thus helping engrain a more data-driven culture within the company,” McElroy said.
Gonzalo Zarza, who heads up the architectural practice for big data & AI for the Argentinean software giant Globant, expects the CDO role to evolve as data becomes more important and data products spread through the enterprise.
“This new data-aided product-centricity poses new challenges to the Chief Data Officer role and nurtures its evolution towards becoming the owner of – and ultimately responsible for – developing and enforcing a tailored but consistent data strategy, helping businesses view data as a company-wide asset,” Zarza says.
“Such evolution doesn’t mean that the CDO would not be responsible for monitoring the organization data management and security policies anymore (as they used to do in the early 2000s),” he continues. “Instead, it means that the CDO will see her/his influence expanded beyond those responsibilities into more strategic initiatives.”
These are good times to be a CDO. With the growth of data continuing to set records, and plenty of defensive and offensive work to do, CDOs are well-positioned to be change agents and drive winning data strategies for their firms.