Today, businesses understand that mining that data is the key to driving success, yet managing and harnessing it is a monumental task, one that has birthed an entirely new role – the Chief Data Officer (CDO). In the last decade the role of the CDO has not only been established, but has seen a sharp and steady rise, with only 12% of Fortune 1000 companies reporting to have hired a CDO in 2012, compared to 63% in 2018.
However, even in the short time the role has existed, it has already significantly evolved. Originally linked to data asset gathering and governance, CDOs are increasingly expected to provide strategic guidance on how the business can maximise the commercial value of data and enhance critical decision making. How can today’s CDO step up to their shifting job role and effectively leverage data-driven insights for business success?
Data takes the lead in success
Data has become the most valuable business asset on the face of the earth with the most successful global brands, from Facebook to Uber built on a data-driven model. In 2016, when Microsoft purchased LinkedIn, for a monumental $26.2 billion, it was its largest deal to date; it was also a price which reflected the data LinkedIn held on over 433 million professionals.
However, while the digital revolution has been beneficial to organisations, it has not come without its problems. Businesses need to learn to understand, protect, govern and gain value from an overwhelming influx of data. Meanwhile, with ever more stringent data management policies and enforced regulations, company data can pose a huge compliance risk. In the face of this new data and threat landscape, businesses must place a renewed emphasis on data security and management – and that requires a total shift in mindset – which needs to be driven by the CDO.
The CDO of the future
As technological advancements continue, the role of data in organisations and the roles of those who oversee it will require more emphasis in order for data to be governed effectively. While the role of the CDO was originally introduced simply to create an owner for data management, this has evolved as data is placed more frequently at the heart of strategic company decisions.Indeed, the role of the CDO is predicted by Deloitte to become increasingly significant as data increases in complexity, volume, and strategic importance. C-suite professionals who do not understand or are unable to monetise key data assets will look to CDOs as key leaders, strategists and visionaries.
Today organisations have begun to realise that the CDO can tease out value from data, providing invaluable insight which is central to the strength of the business. With a CDO in place, it becomes easier for businesses to align information strategy with corporate objectives. By taking ownership of data sources, CDOs can help to make data more available and accessible, determining what data mining tools should be used, facilitating data exploration.
How to unlock the value of Data
Generating value from data is not a simple process, primarily because business data is typically complex, unstructured and unmanaged. As a result, the first step for any CDO is to establish a data governance program. CDOs are responsible for ensuring company data is kept safe, while also supporting companies to draw out proper insights from their data and tease out its maximum value. To properly execute a program a good understanding and control is needed of both structured and unstructured data. However, with organisations having hundreds of millions of files, or tens of billions, getting control of these files is the greatest obstacle in delivering data governance. The thought of identifying and inventorying company data seems daunting – research by the Ponemon Institute has shown that it would take 400 years to manually analyse the value of critical business data for a typical 5000-10,000 employee company.
Technology is rapidly advancing which should ensure this is no longer seen an insurmountable task. For example, smart data discovery tools can quickly organise, tag and assign statuses of value. In this state, information is readily available to employees and more easily located. From here data can not only provide valuable insight but be used in risk mitigation and revenue generation. In fact, the research found that the value of data could be increased by 15% if it were given better visibility and management. It’s critical that the right information is accessible when generating business insight, and only then is it possible for maximum value to be driven from held resources.
Protecting what really matters
Understanding the universe of information being stored and managed by a business, is a critical step to being able to evaluate risk from breaches, compromise or loss. How can you effectively protect your data, if you don’t know what you have? Most businesses have very little insight into what information their business owns, and therefore tend to invest a lot of money in broad-brush security strategies, protecting file locations rather than taking into account the sensitivity of the documents that resides there. This is not only expensive, but ineffective. It makes the assumption that documents of the same level of value and risk to the business are stored in the same places. Given the complexity of organisation’s information storage, this is completely flawed logic.
Ultimately only 5% of a business’s data is absolutely critical and must be protected. The rest might be anything from previous versions of documents, to cafeteria menus. The data discovery and governance process is a crucial first step for CDOs to begin effectively identifying the truly valuable information that the business owns. While typically it’s been difficult to do this on an asset to asset basis, new data discovery technology is allowing organisations to do this more accurately. For example, distinguishing between old financial reports which are now public, and those for next month containing highly sensitive and confidential information. This in turn allows CDOs and their organisations to invest more wisely, ensuring they spend money on protecting the documents that really matter.
Stepping up to a new role
The role of the CDO is evolving from a tactical function to a core strategic role, providing critical data insight which informs the future of the business. Organisations are beginning to recognise that the data analytics and data science is a critical function which can’t be simply added into to the remit of another job role; as a result, the CDO continues to grow. That trend will only continue as long as CDOs and data leaders continue to generate smarter decisions and new opportunities.
To stay on target, CDOs should be focused on three key business objectives - information governance, information value and information risk. To address these objectives, it is essential CDOs have an in-depth understanding of the data their organisation holds; data discovery and governance has never been so important. While taking control of data has typically been daunting task, new technology is revolutionising the process, making it quicker, more efficient and more transparent. With these tools in hand CDOs have the opportunity to keep proving their place in the boardroom.