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Eyes on the Data: The Growing Importance of the CDO

Interesting and insightful perspectives on the evolution of the role and responsibilities of the chief data officer as shared at an IBM conference.

• By David Stodder
• August 14, 2019

Digital transformation continues to generate new, voluminous, and increasingly cloud-based data that is adding to organizations' already sizeable on-premises data stores. Many call this data the new oil. Its sources are not just the usual transaction systems but online and mobile customer behavior, partner and supplier data, geolocation tracking, and machines, including Internet of Things (IoT) sensors.

For Further Reading: Top 4 Developments for CDOs to Leverage Measuring the Chief Data Officer So You Are a New CDO

Getting full return on these data assets requires not just new technologies but new ways of thinking about what organizations can do with the data. Which data sets are valuable, including for possible monetization through products or services? Is your organization using the right combination of technologies and practices to derive data insights for improving customer relationships, making processes more efficient, and driving product and service innovation?

Perhaps more to the point, who is responsible for answering these questions and is fully focused on realizing value from data? In most organizations, the responsibility lies where it always has: distributed among business users and IT. Traditionally -- or at least, the way it's traditionally supposed to happen -- users define the problems they want to solve and then consult with IT personnel to spell out their requirements. IT then develops and deploys applications and systems to meet users' needs and IT's service-level agreements (SLAs).

However, the advance of self-service BI, analytics, and data preparation plus growth in software-as-a-service (SaaS) and other cloud-based options have altered the traditional path, probably forever. In addition, to move faster toward value, many organizations are employing agile (or agile-inspired) development methods that differ from traditional waterfall approaches and favor collaborative teams that break down the walls between business and IT.

Cloud options, self-service technologies, and agile methods are empowering users to explore data and launch projects without having to wait for IT to take charge. Along with the good results of these trends come the problems of more data silos, difficulty integrating data, and a multitude of purpose-driven projects that often feature too much redundancy and inconsistency in data quality, preparation, and transformation. However, given the strength of these trends supporting user empowerment, centralized IT remedies for these problems are difficult to apply. Organizations need new solutions and new thinking to find the right balance between centralization and decentralization.

Is the Time Right for a CDO?

Could assigning responsibility to a chief data officer (CDO) help organizations navigate the brave new world of data and lead the way to deriving higher business value? In June, I attended the IBM Chief Data Officer Summit in San Francisco, which brought together CDOs and other professionals with different titles but similar responsibilities. IBM proclaimed this the "10th Anniversary Edition" of the Summit, which suggests that experience is growing and the CDO position is no longer a new and untried notion.

Even so, according to IBM, the majority of attendees (74%) had not previously attended an IBM CDO Summit. Thus, interest in the CDO concept may still be greater than the number of actual CDOs (TDWI research does not yet find that CDOs are common in organizations). IBM's survey for the Summit indicated that largest percentage of CDOs is in the financial services industry (26%), followed by health and pharmaceuticals (18%).

The Summit's speakers and CDO panelists offered interesting perspectives on the evolution of the role and current areas of focus. Here are some takeaways:

Make governance and transparency priorities. Several panelists noted that a key initial focus for many CDOs is to get a handle on data governance and regulatory adherence so that the entire organization has a coherent and well-communicated strategy. CDOs can head up coordination between business users and IT to ensure that all personnel are aware of and follow regulations and organizational policies. Most privacy regulations call for greater transparency. This means that organizations must be able to locate sensitive data, explain how the data has been used, and respond to consumer's demands for a "right to explanation" of decisions based on analytics. The CDO should lead strategies for improving transparency, which often involves setting up better metadata and semantic data management and integration to make it easier to find and track data assets on premises and in the cloud.

Build trust in the data. Several CDOs noted the importance of improving trust in the data through higher quality, completeness, validity, and relevance so that all users (including external partners and customers) can develop and share insights with confidence. CDOs need to convince stakeholders to support cross-functional investment in technologies and practices for improving data trust. Visibility into data lineage is important to analytics and governance, so improving the tracking of data lineage should be part of building greater trust in the data.

Prioritize to drive outcomes. Darshan Shah, CDO for the state of Indiana, described his organization's innovative procedure for the often difficult task of setting priorities. He explained how before even starting a project, "we require each agency to write a success story before we start the project." He recommended this as a way to get the state's agencies to focus on desired outcomes and to help leaders evaluate which projects are most important.

Look for opportunities to monetize data and analytics. A key focus for many CDOs is to identify projects that can produce data-driven products or services that the organization can offer to customers and business partners. CDOs described how they were able to move their function from a cost to a profit center by identifying potential consumers of data and analytics and executing projects to serve them.

Voice for Data Freedom

Speakers discussed how CDOs should champion freer data movement and integration within their organizations so that analytics can be based on all relevant data. Martin Schroeter, senior vice president of IBM Global Markets, extended this point to a global scale. He advocated "the free flows of data across borders unless there is a compelling public policy reason not to allow it."

Schroeter clarified that he was not talking about personal data (the focus of regulations) or source code (which needs to be protected). He was talking about digital trade and the growth of data localization mandates that are obstructing freer movement of data associated with trade that could be useful in analytics to improve efficiency. Speaking for IBM, he said it was "our responsibility to educate government officials" about the benefits of data freedom in generating value.

TDWI events -- such as the upcoming Strategy Summit in San Diego (August 19 and 20, 2019) -- feature expert instruction, panel discussions, and informal opportunities to share insights about many issues that concern both CDOs and managers and executives who have CDO responsibilities but have different titles. The health of analytics -- the focus of the San Diego Strategy Summit -- depends on trust in the data, visibility into its lineage, and reducing obstacles and friction in data's path to its ultimate use. Organizations should consider whether with a CDO they could move faster toward improvements in these critical areas.