Data is an ingrained part of today’s business world. Companies deal regularly with vast amounts of collected data for research, operations, and strategy. For this reason, many enterprises have created the role of Chief Data Officer (CDO), professionals tasked with managing the massive flows of data in an organization and ensuring it complies with government regulations.
Companies that have a CDO outperform rivals by defining a digital strategy and excelling at data-driven innovation. In this article, we will define the role of a CDO and share 4 reasons forward-thinking enterprises should have them.
Why Do Companies Need a CDO?
Companies around the world are facing unprecedented challenges related to data management and effective use.
First, the exponential data growth is staggering. Companies generate many terabytes of data annually, both internally and collected from customers. According to Statista, the amount of worldwide data generated annually will reach 149 zettabytes by 2024. For enterprises, data can present relevant, actionable information to help the company make more accurate decisions—but finding relevant information hidden inside these massive datasets is becoming increasingly difficult as more and more data accumulates.
Second, the data is not homogeneous, but dynamic. It comes from a mix of sources in a variety of formats, from text messages to social networks, from website interactions to mobile app data.
Finally, data regulations make companies liable for the mishandling of sensitive data that passes through their networks. Companies must, therefore, manage and protect multiple types of quickly growing data at once.
The common assumption that the business owns the data and IT the applications is no longer applicable. There is a need for a top-down management role that can organize data policies, security, governance, and ownership. This is where the Chief Data Officer comes in.
The Evolving Role of the Chief Data Officer
Traditionally, data management was the responsibility of the Head of Data Processing. When the CIO role was created in the early 90s, this was the first time an IT person was at the board level of management. However, data management was still not very advanced, being the responsibility of a data manager at best, but shared between IT and operations in most cases.
The last decade has seen leading firms appointing a new role in the board—the Chief Data Officer. According to Valerie Logan, research director at Gartner, by 2021, the role of CDO will be a critical function in 75% of large enterprises.
The CDO’s Role Among the C-Suite
The old model of IT separated the various aspects of data management into different roles, which didn’t contribute to a collaborative environment or a firm grasp on data management priorities for companies. The need for digital transformation entails a more agile environment of collaboration between higher management and IT departments. In this context, since data permeates every aspect of a business, the CDO role is becoming increasingly relevant.
What Does the CDO Do?
“The CDO is a senior executive who bears responsibility for the firm’s enterprise-wide data and information strategy, governance, control, policy development, and effective exploitation,” writes Gartner contributor Tom McCall.
In simple terms, the Chief Data Officer manages information protection and governance. The CDO is also responsible for presenting policies on data quality and taking care of data life cycle management. The role is dynamic and adjustable to the needs of each company. The responsibilities of a CDO may include:
- Identifying data as a competitive advantage: By having access to detailed data, the CDO can detect ways to use the data for competitive strategy. For instance, predicting high purchasing days to adapt marketing offers.
- Defining a data strategy: CDOs define data policies, standards, and governance practices to keep data integrity and meet compliance objectives.
- Integrating data for digital transformation: It is usually more effective to implement changes and innovation from C-level than from middle management. CDOs can identify new opportunities for digital transformation.
- Enhancing the company’s overall business strategy with data insights: The CDO can identify ways to monetize the insights from data, strengthening the core business by adding sources of revenue and/or by saving money.
Finding the Right CDO
As is laid out at IBM’s Big Data and Analytics Hub, there are a few key qualities that make a great Chief Data Officer. A good CDO will have not only data and business experience but also communication and leadership skills. One of the top requirements for a great CDO is strategic thinking along with high technical knowledge. In summary, the main requisites for a CDO include:
- Business experience
- IT background
- Program leadership skills and experience
- Communication skills
Companies should also look for candidates with the following soft skills:
- Visionary – have strategic thinking that enables them to identify new business opportunities.
- Disruptive – have out-of-the-box thinking to bring new ideas to the table to drive digital transformation.
- Collaborative – creating a good synergy between business and IT departments, aligning them to facilitate core business strategy development.
- Agile – can deliver value quickly and implement strategies from data analysis.
4 Benefits of Hiring a CDO
A CDO is more than a data administrator. With accurate data, the CDO can provide useful information across the company vertical, resulting in a data-driven company. Here are some benefits of hiring a Chief Data Officer:
A. Clearly Defined Digital Strategy
Companies with a CDO will experience the benefits of defined data policies, well-designed strategies, and powerful insights into the use of collected data. A clear data management strategy outlines how your company will use data to help meet your business goals and address existing issues and challenges, as well as new ones that arise. With a data strategy in place, the company will be ready to embrace digital transformation, taking advantage of the benefits of AI-driven data analytics.
B. Driving Digital Transformation
An effective data management strategy continuously detects new uses for data insights. It does this by identifying business opportunities and predicting consumer trends, and helping improve internal processes and inspiring digital transformation with data-backed strategies.
C. Streamlining Processes and Driving Value
The CDO democratizes data, using it to enhance operations across all departments in the company. Data management initiatives shift the company culture towards better decision-making and design of processes that are informed by data—thereby adding value throughout the business. Since decisions are based on data, they are more accurate, wasting less time and fewer resources. Additionally, the rest of the business will become more familiar with the power of data and can better streamline operations according to data regulations and governance.
D. Reducing Enterprise Risk
The CDO ensures the company has clear policies to enforce data protection regulations. Since all data-related activity is centralized, this not only improves regulatory compliance but enhances the security and integrity of the data. This, in turn, reduces the need for frequent internal audits, resulting in further cost savings.
The Future of the CDO
The role of the CDO is quickly becoming a necessity for companies to remain competitive in an economy speeding towards digital transformation. The Chief Data Officer is one of the few members of the C-suit that influences all sectors of a business. In a data-driven company, the role is increasingly turning into a strategic one geared to improving decision-making across and between departments.
However, every company is different, so the CDO’s role varies according to each company’s requirements. Some enterprises will focus more on data administration, while others focus more on data ethics. Either way, all companies can benefit from the drive for digital transformation that a CDO brings to the table.
How KloudGaze Can Give CDOs Invaluable Data
Since so much is at stake in a data-driven company, it’s critical to have access to accurate data insights as fast as possible—which means CDOs need the right tools for the job.
One key area of data management where the right solution is needed is in the tracking of compliance issues within enterprise IT ecosystems. With the level of complexity most enterprises face in their systems, it can be nearly impossible to find all of the applications, databases, and procedures that are creating compliance risk and exposing the company to potentially millions of dollars worth of fines.
With KloudGaze’s powerful dependency and compliance mapping solution, companies can automatically map every application and database in their ecosystem for a 360-degree view of both software and database dependencies and compliance risks at code level. CDOs can use easily generated compliance maps to understand and address compliance issues before they become a problem.
Find out more about how KloudGaze’s agentless solution can strengthen your data governance and compliance by requesting a free trial of our platform. If you have additional questions about how KloudGaze can help your company, contact us here.
Chief Data Officers are critical for enterprises to manage and extract valuable information from huge amounts of data—and to ensure compliance with data storage and usage regulations. Here are 4 ways your company can benefit from having a CDO.
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Hiring a Chief Data Officer has become essential for enterprises to manage and use the huge amount of data they generate, ensuring they comply with data storage and usage regulations. Here’s how enterprises can benefit from having a CDO.