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What Kind of Chief Data Officer Is Right for You?

Before an organization hires a CDO -- as more than 1,000 organizations did in 2015 -- it must take stock of how it generates and uses data.

• By Steve Swoyer
• April 29, 2016

What kind of chief data officer (CDO) are you? According to market research giant Gartner Inc., it's a question that's core to the role and identity of CDO.

Before an organization hires a CDO -- as more than 1,000 organizations did in 2015, up 250 percent from 2014 -- it must take stock of how it generates and uses data.

Only then, argues Gartner research vice president Mario Faria, can it determine how to organize and structure the office of the CDO. This step is important because the role of the CDO is so new.

In fact, everything about the office of the CDO must be created from scratch, starting with its place in the structure -- to say nothing of the policy and process pecking order -- of an organization.

Because the role of CDO didn't previously exist, and because the responsibilities of the CDO are likely to overlap with those of other C-level functionaries, such as chief technology officer and chief information security officer, the office of the CDO must be shaped out of other C-level and upper-level executive function areas. At the same time, existing policies and processes must be adjusted, or in some cases largely rewritten, to make room for the CDO.

"There's no one correct way to design a CDO office -- its structure and strength depends on how it is used by the evolving organization," said Faria, in a prepared release.

The upshot is that CDOs aren't hired or appointed; they're created, their offices carved out of a preexisting power structure. The CDO's responsibilities and powers must be pried away from executives, business units, and other (often jealous) stakeholders.

Because the creation of a CDO entails so much disruption, and because all organizations use data differently, one-size-fits-all models won't suffice. "The organizational design of the office of the CDO must clearly take account of the role that data is expected to play in the organization," said Faria.

In most cases, Faria and Gartner argue, an organization's use of data will comport with one of four CDO models. They are:

• The CDO organization is a business service provider
• The CDO organization is the business
• The CDO organization is an "engine room"
• The CDO organization is ... everyone's CDO organization

The first model, CDO as business service provider, sounds a lot like the traditional decision-support model -- albeit carved out of its general-purpose IT host function and instantiated as its own domain. As a business service provider, "the office of the CDO delivers operational data services that are focused on the needs of the internal users. It succeeds by monitoring any data market developments and building expertise in data asset usage, information management, and analytics."

This is basically what data management and decision support have been charged with doing for three decades now. The difference is it's no longer under the auspices, or the thumb, of IT.

The second model, CDO is the business, fits enterprises in which the focus of the business is information. "Information is one of the explicit external offerings of the organization or is inseparable from the product line," Gartner says. In such a scheme, the CDO is required to deliver "internal and external data services that drive business transformation and differentiation."

In the third model, the CDO as engine room, the CDO develops expertise in using, managing, and analyzing the data assets of its customers. As Faria and Gartner put it, "the office of the CDO delivers operational services that are focused on the needs of [an organization's] internal users."

For what it's worth, this model is highly reminiscent of the IT-as-data-provisioner archetype that Jill Dyché, vice president of best practices with SAS Institute, described in her recent book, The New IT. According to Dyché, IT as data provisioner identifies data-centric systems, apps, tools, and skills as core to its mission. It "gradually outsource[s]" broader or ancillary operational responsibilities.

The final model, everyone's CDO organization, is the least intuitive of the bunch. In this scheme, Gartner says, "the office of the CDO focuses on the needs of the internal users[, but] there is a strong push for data assets to be used aggressively by business leaders and individual contributors to break through traditional perimeters of business, and to drive transformation and new digital business models across the organization."

The models Gartner describes generally align with two different priorities: operational support and business transformation. For example, Gartner identifies "everyone's CDO organization" and "CDO is the business" as transformational in nature: those models are focused less on enabling traditional operations and more on analyzing, optimizing, and changing the business.

"The CDO organizational design is about people," Faria concluded. "It is easy enough to think about what kind of CDO an organization needs in order to meet its business goals, but it can be harder to put in place the right people to deliver on that structure. It's vital CDOs think critically about what skills and behaviors will be required by the office of the CDO in the short, medium, and long term."