If you’ve been keeping track of the digital transformation, you know it’s been shaking up the C-Suite. CMOs are playing a larger role. New tech like artificial intelligence is pushing its way in. Indeed, as technology continues to play a larger role in the business landscape, it makes sense that it has a larger presence at the executive table. And with all the buzz surrounding big data, it is no surprise the next “chief” to join the digital kingdom is the new and improved Chief Data Officer.
In truth, CDOs have existed for nearly two decades—largely in financial markets. Most other organizations utilized CIOs, who managed information and data, all in one gigantic bag. CIOs managed issues like grabbing data from different silos, churning it to make it useful, and managing security and industry governance standards to ensure it was being used correctly. But as it turns out, in an age when data is being created at record speeds—and only planning to grow—one person just isn’t enough. Data—and the value it creates—deserves a dedicated manager.
I’ve seen reports from Gartner that 25 percent of organizations would have a CDO by 2017—and 90 percent of large companies would have them by 2019. To me, it doesn’t matter how many companies are already hiring CDOs—it matters how many companies still need to. In fact, especially with the rise of data anticipated from the development of the IoT, companies that fail to create value from available data streams will be at huge disadvantage in the competitive marketplace. Research from the IBM Institute for Business Value’s 2015 analytics report found nearly 2/3 of those who had appointed a CDO were outperforming their competitors. That spread will only increase as the digital transformation moves onward.
Not convinced your company should shell out an executive’s salary to serve as a glorified database manager? Think again. Gartner estimates the average organization loses $13.5 million a year in poor data quality. In fact, today’s data managers do much more than organize numbers. They apply meaning—develop strategy—and keep data streams clean and useful for all members of the organization. The following are a few ways CDOs can add value to your business:
They Make You More Competitive
The best way to beat someone at their own game is to know more about it than they do. In the business world, that means better understanding your customers, including how they like to communicate, what they like to buy, and how you can satisfy those needs in the most efficient ways. With the IoT and machine learning, it’s now possible to glean all of these insights—whether it be on social media or the supply chain. The CDO can help you analyze that data, get it to the right teams and decision-makers, and mine even greater insights than you ever imagined.
They Break Down Data Silos
Ever worked with a department that didn’t like to share information? It can be infuriating. In fact, though employees work for the same company, they often forget that they work on the same team. Data becomes a commodity that is fought for, rather than shared and processed freely. As company leaders, CDOs can help break down those silos to make sure all relevant players in your organization have access to data that impacts their decisions.
They Bring Meaning to Data
Face it: not all of us are good at finding the meaning in data. No matter how many pie charts and bar graphs we see, we just don’t get it. But using machine learning and other technology, CDOs are able to find the trends and insights we are not trained to uncover. And it’s those insights that can save hours in production time—millions in losses—or days in travel.
They Keep Data Clean
Dirty data is no data at all. In fact, data is only valuable when it is clean. But with the influx of so much data, many organizations are struggling with data swamps that are dirty or stagnant. That means every report run is incorrect—every estimate is off—every list is inaccurate. Or there is just too much data to see the results you need. CDOs can help create clear and consistent data capturing and labeling processes for all teams in your organization, and ensure those processes are maintained by all users.
They Support the C-Suite Team
Because they understand the ins and outs of data, they can help your CMO, CIO, and even your CFO make better use of the data in front of them, and encourage them to use data in more meaningful ways. In fact, they aren’t there to hoard the data. They’re there to protect it—but to share it widely so as many people within your organization can benefit as possible.
Now that I’ve made a pitch for the CDO, I want to say this: It’s not an easy job. Research shows most CDOs don’t last more than two or three years. And with the looming rush of data promised by the IoT, I’d say their tenure might get worse before it gets better. Still, as machine learning and other AI continue to develop, the CDO—and all levels of the organization—will have even greater tools for data processing. At which point, either we’ll no longer need the CDO—or its job description will change once again.
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Daniel Newman is the Principal Analyst of Futurum Research and the CEO of Broadsuite Media Group. Living his life at the intersection of people and technology, Daniel works with the world’s largest technology brands exploring Digital Transformation and how it is influencing the enterprise. From Big Data to IoT to Cloud Computing, Newman makes the connections between business, people and tech that are required for companies to benefit most from their technology projects, which leads to his ideas regularly being cited in CIO.Com, CIO Review and hundreds of other sites across the world. A 5x Best Selling Author including his most recent “Building Dragons: Digital Transformation in the Experience Economy,” Daniel is also a Forbes, Entrepreneur and Huffington Post Contributor. MBA and Graduate Adjunct Professor, Daniel Newman is a Chicago Native and his speaking takes him around the world each year as he shares his vision of the role technology will play in our future.