The Business, the Data, and the CIO
It's time to revolutionize IT and how it handles business intelligence data
In November, Larissa Moss wrote an article in BI This Week that advocated for the role of chief data officer (CDO).
Although I am sympathetic to the reasoning in her proposal, I don't think that putting a CDO in the C-suite is a good idea. Doing so would not lead to any overall improvement in either the corporate appreciation of data, information, or knowledge. It also would not lead to the greater effectiveness of IT, both in terms of business as usual or strategic and tactical projects and initiatives (such as enterprise data warehousing and big data analytics).
That said, I do think it's time to revolutionize IT, albeit in a coherent, controlled, and cohesive way, and that this positive transformation would also address the concerns that lead to the proposal of a C-suite CDO.
Reorganizing IT: The Broad Brush
Over the years, I have taken part in restructuring several IT organizations in midsize and large corporations. I tend to go for a simple organizational structure that represents the purpose and direction of both the IT organization and the business that it serves.
This is an example of the high-level structuring of IT and how it relates to the Office of the CIO and to the Board:
For the purposes of this article, the most important elements in this diagram are those items (in dark blue) that link data governance and exploitation to the CIO and the executive board.
The Office of the CIO is made up of a number of functions, roles, responsibilities, and processes, including business services; architecture; application management; infrastructure and operational management; project management; information management; knowledge management; and quality management.
In turn, although Data Governance and Exploitation is made up of many elements, it is a function and process that sits within business services and within the Office of the CIO.
Focus on Business Services
This is a brief but deep dive into the area of business services with a particular focus on data governance and exploitation.
Within data governance and exploitation are a number of key activities and artifacts that support the effective functioning of all associated processes that support the strategic, tactical, and operation objectives of the organization regarding data. Here are some examples. The all data nomenclature has been borrowed from the Information Supply Framework (for more information, check out Big Data in Context and How to Position Big Data).
All detail investigation: An activity center that carries out research into potential new sources of data and analyzes the effectiveness of existing sources of data and its usage. It is also responsible for identifying markets for data owned by the organization.
All data brokerage: An activity that focuses on all aspects of matching data demand to data supply, including negotiating supply, service levels, and quality agreements with data suppliers and data users. It also deals with contractual and technical arrangements to supply data to corporate subsidiaries and external data customers.
All data quality: Many of the requirements for clean and useable data, regardless of data volumes, variety, and velocity, have been addressed by methods, tools, and techniques developed over the last four decades. Data migration, data conversion, data integration, and data warehousing have all brought about advances in the field of data quality. The All Data Quality function focuses on providing quality in all aspects of information supply, including data quality, data suitability, quality and appropriateness of data structures, and data use.
All data catalogue: The creation and maintenance of a catalogue of internal and external sources of data, its provenance, quality, format, etc., is compiled based on explicit demand and implicit anticipation of demand. It is the result of an active scanning of the data markets, potential new sources of data, and existing and emerging data suppliers.
All data inventory: This is a subset of the All Data Catalogue. It identifies, describes, and quantifies the data in terms of a full range of metadata elements, including provenance, quality, and transformation rules. It encompasses business, management, and technical metadata; usage data; and qualitative and quantitative contribution data.
Of course, there are many more activities involved in data governance and exploitation, but this list will suffice for our discussion.
The Renaissance CIO
The Office of the CIO is made up of several areas of competence, functions, roles, responsibilities, and processes. To be effective, does a CIO need to have in-depth knowledge of and experience in all of these areas? Simply put, no.
A CIO need not know about all of the nuts and bolts of IT any more than a CEO needs to have in-depth knowledge of and experience n all areas of the business and all roles and responsibilities within the C-suite. In fact, a CIO with such extensive knowledge and experience -- if such a person actually exists -- would probably be more of a liability than an asset.
When it comes to data, the CIO needs know:
- They are an equal partner in the C-Suite because they understand the meaning strategy and significant challenges, and how IT can contribute to formulating strategies that address significant business and IT challenges.
- They have a competent and trustworthy data governance and exploitation team that will advise them proactively on all data issues relevant to business strategy, tactics, and operations.
- What assets and liabilities mean within the context of the business.
- That data can have value, it can be mission critical, and that there are measurable and manageable risks associated with data. Also, that there are avoidance and mitigation measures to secure data as an asset, and to exploit it as a resource.
- That data value isn't just in what value it can produce but in what value it can retain and what risks it can mitigate. For example, accurate data used for regulatory reporting will help avoid financial and reputational risks associated with misrepresentation, understating or overstating, or otherwise inaccurate and tardy reporting.
- How each piece of the IT organization fits together, both formally and practically; the synergies, the abrasions, the roles, responsibilities and competencies, and so on and so forth.
- That everything that the office of the CIO is responsible for can be linked to business imperatives, initiatives and tangible demands.
The CIO must be able to effectively lobby, influence, and inspire the corporatewide appreciation of the value and the effective use of the data assets that the business possesses and has access to.
Most important, however, is that the CIO needs to be able to call on the competence of direct reports and the teams that support them, much in the same way that the CEO can. This is nothing new -- it's a feature of many organizations, and when used well, it works very well.
The Reimagining of Data Governance
Data governance can no longer be just about standards and the imposition of rules. It has to step up to the plate, move forward, and play a leading role in business.
This means that data governance and data exploitation must be a function that protects data, creates data-related standards, and nurtures the use of data as well as and actively evangelizes (sells) the cost-effective use of all relevant business data, external or internal, regardless of variety, volumes, and velocity.
It is within data governance and exploitation that the real data competence, knowledge, and expertise should reside.
Although Ms. Moss advocates for a CDO, I think that better outcomes can be achieved by changing a few of the duties of the CIO and by reorganizing IT accordingly.
In any organization that depends on IT, and for strategic, tactical, and operational reasons, the CIO must be a C-suite position. The CIO and the organization they head up cannot be fully effective if they are required to report through the CFO or another CxO.
CIOs must structure their organization so it can provide a full professional service portfolio, covering the spectrum of business requirements, including the measurement and management of tangible assets (such as data, information, and structured intellectual capital).
Although it would be easier for all concerned if business people recognized that data is potentially an asset, it should not be a show stopper if they don't. What is important is that people in IT, from the CIO down, understand that data can be an asset, and that the best way of demonstrating the value of data to the business is through continuous and tangible examples of its time and place utility.
Over time, the objective of the CIO should be to promote the idea of data, information, and knowledge as assets, and sponsor initiatives (including asset appreciation) as part of the onboarding of new employees and consultants as well as through continuous engagement with employees.
At the board level, the CIO must also be the ultimate authority in all matters related to data, in much the same way that the CFO typically has the final say when it comes to capital, financial assets, and liabilities.
CIOs can call upon their own competences and having their own people attend C-suite discussions. I have done it in the past, even as an external expert, and the practice will surely continue. As for a CDO in the C-suite, I'm not convinced.
Martyn Richard Jones is a senior project manager at Cambriano Energia, a management consulting firm. You can contact the author at [email protected].