These Three Data Trends Will Set Businesses Apart
With a data analytics revolution underway, what should enterprises be paying attention to in 2022?
- By Peter Jackson
- December 15, 2021
Data is power. It powers digital transformation, holds the secret to understanding customers, and fuels the automation efforts that lead to a leaner, smarter way of working. There’s no question that the power of data is widely understood, but many are missing the crucial building blocks required to harness data’s potential.
With the data analytics revolution underway and more companies looking to use -- and understand -- their data potential, it’s likely we’ll see a huge surge in the following key trends:
Trend #1: More companies will invest in a chief data officer (CDO)
“The most unstable C-suite job may be the Chief Data Officer,” as a recent article in the Harvard Business Review states. It’s easy to see why. Half of the CDOs we spoke to in our recent report, “The journey to CDO: How to succeed in the most influential role of the decade,” said the value of the role is not yet recognized in the business world, while a further 36 percent believe the C-suite doesn’t understand the CDO role.
That’s set to change. The COVID-19 pandemic served as a particularly loud wake-up call for businesses that had not yet prioritized their data strategy. They learned that to make effective decisions faster in an increasingly complex and uncertain world, they need to put data at the top of the agenda.
What’s more, they recognized that a data strategy can’t be implemented effectively without someone to spearhead it. Someone who is responsible and accountable for their data -- and for delivering value and insight from it, too. They’ve come to realize that the CDO is the best person for the job.
Trend #2: The role of the CDO will become more clearly defined
It’s essential that senior leaders are educated about what the CDO role really entails and how they can help those in the role make a positive change in their organization.
Almost half (46 percent) of the chief data officers we spoke to in that same research believe an organization’s expectations for the role are too high and misinformed. More than 40 percent face unclear role expectations, while over a third believe the C-suite doesn’t understand the CDO role along with other departments and business functions. This disconnect leads to confusion about what the CDO role can deliver, what tools a CDO needs to do the job, and what counts as “success.” For example, CDO leaders are often given operational issues to contend with or have to build data functionality from the ground up, delaying the big results executives are after. Oftentimes companies add the CDO role too soon when they’re hyper-focused on sales and growth and see the CDO as a “ticked box” role.
The good news is that there is a shift on the horizon. Enterprises must position the role of CDO as the most senior person within an organization accountable and responsible for data -- like the CFO is for the finances of an organization. CDO is not about being a gatekeeper of data -- it’s about liberating it.
Those organizations that set realistic expectations around this, along with achievable goals for improving data accessibility and literacy across all levels of the organization, will be better placed for success.
Trend #3: Data ethics will move up the business agenda
Any organization using data and automated decision making needs to think seriously about the potential for unintended consequences and disadvantaging, discriminating against, or harming individuals or certain groups.
Unfortunately, a startling number of businesses have yet to make data ethics a priority. Even in those companies that use advanced AI-powered data analytics, only one-fifth (20 percent) actively monitor their models in production for fairness and ethics.
Clearly, it’s an issue that needs to be tackled. Every day, questions need to be answered such as:
- At what point is data collection and monitoring considered an invasion of privacy?
- Has the intended use of this data been made clear?
- How anonymous does anonymized data need to be, and can you prevent it from being re-identified?
- When you get to a point where machines are training data sets, how do you prevent algorithmic bias?
With all this in mind, data ethics is likely to follow a similar course to the GDPR leading up to its implementation in 2018. In 2022, data ethics will be discussed more widely among the data community and will move up the business agenda, but it won’t break out as a serious issue within the business community until 2023 or beyond.
Pioneering businesses can, however, tackle this earlier and get a head start. Formalizing an ethics framework can be a helpful way of providing a model for how to behave ethically, offering a principles-based approach to doing business. It can lay the groundwork for underlining how data is used to inform decisions and ensure that data ethics practices are present in data touchpoints across the business. More importantly, it can become a guide to handling those difficult grey-area situations where “doing the right thing” is difficult to assess or interpret.
Let’s ring in the New Year and get to work putting data in the spotlight for continued business success.
Peter Jackson is the chief data and analytics officer of Exasol. He is a data evangelist and co-author of two best selling data books: "The Chief Data Officer’s Playbook" and "Data Driven Business Transformation." Prior to joining Exasol, Peter was director of group data sciences at Legal and General, where he was responsible for the group’s data strategy and for driving innovation and digital transformation globally. During this time, Peter also served as the chief data officer for the L&G Investment Management business, an Exasol customer. Additionally, Peter held the first chief data pfficer role at Southern Water, leading the utilities giant’s data transformation and helping it become a data-driven organization.