Quick, what does CDO stand for? Before you say chief digital officer, think again. A new study points to the chief data officer as the more important of the two titles, finding 82 percent of CIOs believe there is a compelling case to hire a CDO in most organizations. The survey, commissioned by Experian Data Quality, was completed by 200 CIOs and 50 chief data officers in June and released in August.
But while the report stresses the importance of the CDO to companies that want to become data-driven, it also reveals severe challenges for some CDOs, including very high expectations, insufficient resources and, despite the C-level title, a lack of authority to get the job done.
The survey states that the core responsibility of the CDO is “to define a data-management strategy and translate it into tactical, [achievable] steps for the business.” To make data actionable, it needs to be accessible, accurate and standardized. Here’s a simplistic example of why that is important: Let’s say a data analyst needs to create a report that isolates customers based in New York City. If some of them are listed as being headquartered in NY, NY and others are listed as based New York, NY and still others are in the database as New York City, NY, that’s not standardized. The data analyst would need to realize the data is splintered and needs to be stitched together to get accurate results.
Making your business data-driven is part of the potential promise of digital transformation. CDOs and their ilk face a daunting task. Transforming data into business intelligence is the alchemy of this age.
The study identifies three main drivers for hiring a CDO: capitalizing on big data opportunities, creating a competitive advantage and reducing risk on data-driven projects. These roles go far beyond the data management and data governance toward enabling business innovation. Over the next few years, the CDOs surveyed predict that their top business challenges will concern data security, keeping pace with technology advances and managing increasing user expectations.
Perhaps one of the biggest challenges some CDOs face is the inconsistency across companies of the nature of their role and their stature within the organization. Bottom line: They may not have the authority they need to succeed. The survey reveals, for example, that the average tenure of a CDO is only two years. Many CDOs report that despite their C-level title, they are not considered to be a part of the C-suite. Although 37 percent report directly to the CEO, a larger percentage reports to the CIO, CTO or some other part of IT. That can create some friction because it’s important that CDOs are able to bridge the gap between IT and lines of business—and empower the business.
Tips for Structuring the CDO’s role
In creating a new CDO position, the C-suite should be advised of these common challenges faced by CDOs identified by the survey:
- Staying within budget
- Keeping up with evolving technologies
- Knowing how to interpret information
- Finding/hiring people with data expertise
- Managing ever-increasing user expectations
- Balancing the needs of business users and IT
- Having a lot of responsibility with little room for error
- Getting pulled into the weeds
- Maintaining data security
You should consider extending these responsibilities to your CDO:
- Having significant control of the management and use of company data
- Playing an active role in digital transformation
- The responsibility for enterprise-wide governance and utilization of information as an asset
- Manager of a team of experienced data employees
- The purview to implement different approaches to managing data as an asset
- The purview to generate business intelligence that unlocks and supports business innovation
- The authority to be recognized by the entire company is the person overseeing data strategy and process
- Recommend: At least a dotted-line report to the CEO.