You know there’s something important going on when a phrase appears with initial capitals. Like ‘Big Data’, for instance. Big Data, and the analytics that go with it, are providing companies with more and more information about their customers: their likes and dislikes, their behaviours, and their preferences. And as a result, companies can interact with their customers in a highly personalised way.
But are there changes that companies need to make to the way that they operate to take full advantage of Big Data? Many commentators think so. There’s an increasing buzz about the developing role of Chief Data Officer, someone with Board-level responsibility for the way in which data is collected, analysed, stored and used within the company.
A new role, but an old need
Peter Aiken and Michael Gorman, co-authors of the book The Case for the Chief Data Officer, argue that data is an organisation’s most vital asset. But at the moment, many organisations place the responsibility for data either on everyone’s shoulders, or on those of the Chief Information Officer.
Both of these do make sense in many ways. After all, if data is a valuable asset, then everyone needs to be aware of it, and value it, right? Well, yes, but what usually happens in practice is that if everyone is responsible, then nobody takes any responsibility. Which means that data is probably not being used as well as it could be, and there are obvious risks to security if data is lost or stolen. You really need someone who is responsible for it across the organisation.
What about the CIO? Again, it makes sense in theory: there are close links between data and technology. But in practice, CIOs already have a lot on their plates. They’re trying to migrate to the cloud, ensure adequate backup and recovery, and adopt new technologies quickly. Data management could be the straw that broke the camel’s back. It’s a matter of capacity.
Aiken and Gorman suggest that the CDO role may not be important for very long, but is absolutely vital now to ensure that organisations can focus on data, and really manage it well.
Who and what?
So what sort of person is a Chief Data Officer, and what do they need to do? Interestingly, most commentators seem to agree that the ideal CDO is not a data scientist. Granted, they need to be able to understand the technology for storage and analytics, but they also need the strategic overview that will enable them to influence their fellow executives. IBM has issued a neat infographic about the CDO which suggests that they need to have business skills, including change management, understanding of business drivers, and ability to collaborate and inspire across business units, supported by skills and knowledge about information governance, data infrastructure and design, and methods and tools.
IBM is also clear about what it thinks a CDO should do: drive an executive mandate to take actions underpinned by information, accelerate an enterprise-wide data strategy that will support change, and reward innovation that improves corporate performance. That sounds big and bold, but how can the CDO actually add value? Again, IBM has the answer: in five key areas. These are:
- Data leverage, using the data that already exists, to improve performance;
- Data enrichment, by combining data from different sources;
- Data monetisation, to identify new ways of earning;
- Data protection, to prevent the high cost of failing to do so; and
- Data upkeep, to ensure that the data is accurate and fit for purpose.
Perhaps most importantly, the CDO needs to drive a culture of data reliance into the organisation. This may be why the role needs to be an executive one, with most commentators agreeing that CDOs should report direct to the CEO. The best decisions are those that are supported by data and information, not done on a ‘hunch’. And it’s here that the CDO can change the way the organisation works. There are two aspects to this. The first is making sure that the right data is available, in other words, the data that is needed to support decision-making. The second is making sure that the data that is available is right, which means assuring its accuracy and timeliness.
A hard task
If both these are delivered, then it becomes a no-brainer to rely on the information to hand. If either is missing, or even in doubt, then nobody will trust the data, and it becomes worthless. The CDO indeed has a tough role, but a necessary one in a world of Big Data.