Chief Data Officers (CDOs) first reared their heads back at the turn of the millennia, became popular around 2005 and were globally integrated by 2013. Visa was one of the first to light the torch with CDOs in 2001 with Yahoo! following suit in the form of Usama Fayyad in 2004. The Global Financial Crisis of 2008 was certainly impactful to the number of Chief Data Officers as many financial and banking organisations took up the CDO mantel in response to the increase in governmental regulations in that sector.
Here in New Zealand, we had our first two Chief Data Officers in 2015 which has rapidly grown to 20 as of this year. New Zealand have even sent three representatives from Pinnacle Midlands Health Network, Xero and Cricket HQ to the Australian CDO conference and there is a belief that numbers in the country will only continue to dramatically shoot up – indeed, there is even an impetus for this outcome. The country will also host its own conference at the Hilton, Auckland on the 28th November (http://www.eventogo.com/event/chief-data-and-analytics-officer-new-zealand-conference-2017).
Looking at the timeline, you might be inclined to say that New Zealand is way behind the trend, but in real terms, the difference is negligible. The UK government waited till March 2015 to appoint its first CDO, the Financial Times chased after in September 2015 and Sainsbury’s waited till October 2016 to jump on the bandwagon.
The Chief Data Officer position, in many parts of the world, has been crammed into the CIO’s remit – an interesting occurrence considering the night-and-day comparison of the roles. The reason for this assimilation often comes down to companies weighing up their options: do they really need a CDO? Are there enough benefits to having a CDO or is this simply the corporate flavour of the decade?
If you have aspirations of climbing the greasy pole however, being a CDO can have its benefits, according to predictions by Gartner from November 2016, in that 15% of CDOs will “Move to CEO, COO, CMO or other C-level positions by 2020”. I find it an interesting reflection of how quickly things progress nowadays, but I have my own prediction that, if or when these 15% achieve their business dreams, the positions they once held will become redundant as CDOs fade into obscurity. That’s not to say that the service they provide in itself is ineffectual, but more that I believe the game has changed and will be absorbed into the niche of the new kid on the block: the Chief Strategy Officer. If this is true, how long will it take for this trend to take hold? That will depend on the understanding of companies in how they utilise this new C-Suite executive. Will they invest the time and money to fulfil my prediction? I think the most hungry corporations are already on track to do just that. Before Chief Data Officers go the way of the dinosaurs though, let’s look at what their function in the corporate world is.
The CDO, as defined by Tom McCall for Gartner (2015), is “A senior executive who bears responsibility for the firm’s enterprise wide data and information strategy, governance, control, policy development, and effective exploitation” and is responsible for “Information protection and privacy, information governance, data quality and data life cycle management, along with the exploitation of data assets to create business value”. One senior New Zealand CDO commented that McCall’s definition “Sum[med] it up nicely”, but that he himself would define the CDO’s job as finding “Useful and credible business intelligence…for assisting in determining the strategic direction of the organisation”.
With my musings over the future of CDOs in place, I recently stumbled upon a webinar that Forrester Research presented in 2015 where the audience was asked the question “Do you need a CDO?” The webinar covered the basic state of the CDO role of which companies have one, who they report to and what do they do and also drew fascinating conclusions that there were compelling correlations between organizations with CDOs and positive business benefits. Forrester Research went on to state that not only are organizations with a CDO more likely to achieve higher revenue growth, they are also:
• More likely be able to ensure compliance and reduce risk.
• More likely to demonstrate business agility.
• More likely to make data available within days, compared to weeks.
• More likely to commercialise their data.
• More likely to do a good job at attracting, hiring, training and retaining business intelligence talent.
Usama Fayyad, who I briefly mentioned earlier and now performs the role of Chief Data Officer for Barclays, explains that "There are lots of opportunities and dangers in a changing data landscape…. I think 90% of CDOs fail, and if you are not an organisation that is going to let the Chief Data Officer try things and deliver then you will fail."
Any organisation thinking of incorporating a new CDO to, as Stephane Pere (CDO, The Economist) would put, “Reinforce…current business models” needs to think about their objectives with the role and what their realistic expectations should be. Just as with most things in business and in life, there should be a plan of attack for big opportunities lest you risk mistrust, infighting or even a total meltdown; so before you hire that shiny new CDO that you’ve heard so much about, ask yourself “Do we need one?” Ask yourself these questions and you decide:
• Have you got the right culture for data? Does everyone understand how important data is?
• Have you established a clear strategy for data collection and subsequent analysis?
Everyone in the company needs to be empowered by the data with the CDO providing guidance and skills to ensure that this works seamlessly with the business.
With this right, data becomes a huge asset, enabling you to spot new opportunities as well as how to maximise your bread and butter. Getting the data correct will lead your organisation to saving costs, establishing new revenue streams and reaching its ultimate potential.
If you are in New Zealand and interested in how a Chief Data Officer could benefit you, take up our offer of “Try before you Buy”. We have CDOs whom are happy to discuss the good, the bad and the ugly from around the world and how New Zealand companies can apply these lessons. Please don’t hesitate to let me connect you to the right people – and all for free