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September 18, 2020

The CDO’s Role in Leading Data-Driven Transformation

Yasmeen Ahmad


The evolution demanded of companies today is propelled by the blurring of lines between the physical and digital worlds. With faster internet connections, the adoption of mobile and cloud technologies, as well as the advancement and ubiquity of technology, companies have had to rapidly adapt to a digital, data-driven world. Businesses at the forefront of this transformation – such as Amazon, Google and Salesforce – have challenged traditional business models with their out-of-the box thinking to maximize on the potential and new avenues revealed by digital and data.

Faced with this disruption, CEOs are asking themselves: How do I pivot my organization to put data and digital at the forefront of our future? Who on the executive team will lead the charge? And so, we see the rise of the Chief Data Officer (CDO). Even though the role has existed for almost two decades, it is still largely misunderstood and rapidly evolving.

Let’s dive into the reality of why the CDO role is one of the most important positions in an organization, and how CDOs can prove their worth and lead their organizations to digital and data success.

Evolving the CDO’s Role

To handle the disruption from digital and data, it is imperative that organizations don’t simply label digital and data as a technology solution or a problem to be solved.

In certain circumstances, CDOs have been hired simply as “librarians” to build a solid data foundation. These CDOs are tasked with activities such as infrastructure management, data cataloguing, master data management, data integration, data quality, security, and access. Such a narrow view on data and casting it as a sustaining activity, prevents the realization of the grander opportunities arising from the application of data. Leaving the rest of the organization to “figure it out” and identify how the data foundation can be put to use and monetized often leads to the remainder of the transformative steps failing to complete.

CDOs should not be considered data librarians (SFIO CRACHO/Shutterstock)

Seeing the role of the CDO as a librarian tasked with building a data foundation – i.e. a gatekeeper of data – should only be one aspect of the role. A CDO who will transform the organization through data needs to also be measured on how that data is put to use to drive business outcomes, whether that be operational efficiency, generating new revenue streams, improving productivity or accelerating decision-making with confidence and certainty.

The CDO’s Role in Spearheading Disruption

In the early stages of embarking on a data or digital journey, it may have been adequate to hire a CDO with the skills to build a solid data foundation, ensure it is secure and implement select business use cases. However, making a disruptive transformation requires a C-level player who won’t just play defense, but is ready to go on the offense, breaking through cultural and organizational inertia to define a new normal.

A disruptive path of any kind demands a new mindset. Digital and data transformation are no different, requiring a complete overhaul of processes, data and technology systems, customer relationships, employee skillsets, as well as company culture. This disruption requires a CDO be ready to take ownership and lead the charge. But to succeed with change, a CDO must be empowered to oversee and overhaul, as well as the ability to steer executive strategy and investment decisions.

The CDO role has the potential to take this broader leadership role, influencing company strategy, as well as providing key insights to drive, measure and manage strategic decision-making and execution. Moreover, the CDO has the potential to be the CEO’s right hand and guide the company through an evolution. However, without the necessary support and authority, CDOs are met with resistance and lack of attention or buy-in due to a vast range of competing priorities. CDOs must be empowered by the CEO to be the collaborative force throughout the enterprise: the single, unified voice to drive change in the company’s relationship and mindset when it comes to data.

Driving Value and Measurable ROI

As a disruptive and innovative CDO, first and foremost the focus should be on driving new value streams and ROI. In fact, CDOs should be incentivized and given the freedom to take the necessary risks to do so. For example, the CDO at Morgan Stanley, Jeff McMillan, launched a novel and innovative enhanced human advising process which is augmented with machine learning intelligence, enabling Morgan Stanley to better understand client needs.

CDOs are expected to be disrupters as well as lead collaboration (Nafron-Chediroki/Shutterstock)

With data playing a key role in this time of disruption, the CDO is best positioned to create the business roadmap to harness data. This includes both near-term data use cases that can impact business productivity and revenues, as well understanding the longer-term impacts of data on an enterprises business model and the potential for new data driven product/service offerings. For some industries, this may be transformational, for example taking healthcare to virtual care models or transforming traditional retail supply chains to digitalized supply chains.

Furthermore, as organizations face new challenges, such as COVID-19, the CDO can be the executive lead to take on the business response taskforce. By leveraging data, challenges can be analyzed and understood and the risk and impacts can be quantified. With the CDO in charge, times of crisis and challenge can be framed as opportunities across the organization, be that supply chain, workforce management or demand impacts. Although disruptive, a crisis can be the ideal opportunity for a business to pivot to new ways of operating that drive market share and build competitive positioning.

Striking a Balance Between Gatekeeper and Innovator

Being the disruptor and innovator does not mean the CDO’s role in forming, securing and ensuring appropriate use of a strong and robust data foundation is not relevant. Rather, they must strike a balance between the roles of “gatekeeper” and “innovator”.

There is now more focus than ever in both society and business on the ethical and safe uses of data. As a result of concerns, law and regulations are being introduced, such as the California Consumer Privacy Act (CCPA) or the European General Data Protection Regulation (GDPR). As gatekeepers, CDOs must ensure the company is abiding by such privacy and data protection laws or face heavy penalties and significant impact to company reputation.

With CCPA and similar legislation, it is imperative for the CDO to navigate through contention and confusion. For example, the financial services industry acknowledges the “right to erasure” or the “right to be forgotten.” However, this creates challenges as destroying personal data at the request of consumers must be balanced with financial regulation and compliance measures that stipulate the need for data retention and data integrity.

However, as an “innovator,” it is not just about laws and checkboxes. If a consumer has given permission for data to be used and laws allow for it, it also falls upon companies to ensure algorithms used on data are monitored for bias. Moreover, the push for “Explainable AI” to enable explainable decisions is on the rise. It is the CDO who must build the necessary governance frameworks to ensure the business can make ethical, safe and robust decisions that withstand scrutiny.

As a result, the CDO must wear many hats, including being a gatekeeper, an innovator, a steward of customer data and more. No matter what industry or task, a CDO must tow these lines to ensure they are providing the right guidance to spur long-lasting and sustainable change for the better within the organization.

Tips for Being an Innovative CDO

Innovation comes in many facets and demands that CDOs embody multiple characteristics to drive change within an organization. A few best practices to channel innovation and disruption as a CDO include:

CDOs need to balance their roles (metamorworks/Shutterstock)

  • Influence culture. Collaborate with executives and leaders to drive a data-first culture across the organization, ensuring that data is the linchpin to all decision-making.
  • Improve data literacy. Be a champion of learning, inspiring leaders to gain new skills and knowledge that are needed for the digital and data businesses of the future.
  • Establish organizational capabilities. Build momentum, repeatability and credibility through standardization of resources, work and business processes.
  • Drive inclusion and diversity. Ensure the reliable, safe and ethical use of data through policies, best practices and training.
  • Be timely with robust data. Deliver data and insights quickly and effectively into the hands of business leaders and analysts who can in turn run the business in real-time through data insights translated to actions.
  • Seek ROI. Identify and demonstrate tangible return on investment to ensure that resources are guided and prioritized to the biggest business impact areas.

The Future of the CDO

With the role of the CDO becoming critical to the transformation demanded by enterprises, it is being further elevated as an integral business position. Gartner predicts that by 2021, the office of the CDO will be seen as a mission-critical function comparable to IT, business operations, HR and finance in 75 percent of large enterprises.

In fact, even though the CDO role may have once fit under the CIO, it is now being considered as a direct report to the CEO. Originally, the CDO position was meant to capture responsibilities from IT, helping reduce the workload of managing data infrastructure. However, to handle the disruption of digital and data, it has become the purview of the CDO to be the change agent – a data visionary even – and to continuously look to data to drive business transformation. Tasks such as managing infrastructure and rehauling traditional IT strategies and modernization have kept the CIO busy. These are now even further exacerbated by the COVID-19 pandemic, resulting in the CIO having to support working from home.

Now is the time for organizations to rethink – and elevate – the role of the Chief Data Officer, providing them the authority and ability to take risks in order to embrace new opportunities that drive increased innovation. We’re at a critical stage where data must be placed at the forefront of the enterprise to create digital and data transformations, and CDOs will be crucial in making that mission of growth a reality.

About the author: As VP of Global Enterprise Analytics at Teradata, Dr. Yasmeen Ahmad helps the company lead with a data-driven mindset, establish a global community of data and analytics experts, and build an integrated ecosystem to ensure data is developed as an asset for current and future needs. Yasmeen has supported multiple organizations across industries in their execution of key transformation objectives, including the pivot to analytics, as-a-service, subscription and cloud. She was named one of the Top 50 Data Leaders and Influencers by Information Age, as well as Data Scientist of the Year by Computing Magazine.

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