Board rooms are becoming crowded with executives responsible for specific functions. Jostling for a place now is an entirely new role – the chief data officer. But what exactly does that mean and how easy will it be to fit a new CDO into the existing C-suite, asks David Reed
It’s a difficult job, but somebody has to do it. Use and governance of the data asset to drive value for the organisation covers a complex range of activities, starting with creating data definitions and setting standards for metadata right through managing the risk which data creates and on to leadership within the organisation as the “voice of data”.
As job descriptions go, this can rapidly become a lengthy one. Little wonder, then, that the role of chief data officer (CDO) is still relatively rare. It is also a new post – the first holder of the title was Usama Fayyad of Yahoo! (now CDO at Barclays) in the early Noughties. It was only last year that the first CDO Leadership Forum was run in the US and it took its maiden European bow in London this February.
The need for a CDO is also not yet fully recognised. An annual CMO-CIO survey by Accenture last year ignored the job title completely among its raft of C-suite titles that each needs to interact with. The relative lack of candidates may have been considered likely to generate too few answers to be valid, of course.
McKinsey grazed the subject in a recent article in its quarterly Journal, “Mobilizing your C-suite for big-data analytics”, but preferred the title Chief Analytics Officer (perhaps because the acronym CDO is being competed for by Chief Digital Officer). In making its pitch for a new top-level position, the authors wrote: “Daunting as it may seem to rethink top-management roles and responsibilities, failing to do so, given the cross-cutting nature of many data-related opportunities, could well mean jeopardising top- or bottom-line growth and opening the door to new competitors.”
That is a compelling argument for creating this post. But what will it mean to the individuals who get appointed (assuming there are sufficient candidates up for the challenge)? And how will the CDO fit into the organisational structure given the web of relationships and responsibilities that it will deal with?
Matthew Keylock, CDO for dunnhumby, says: “The role is about both data and leadership. A lot is about insight and data mining, but it can also be about motivating and building projects.” He recognises that this position is still in its nascent stages with relatively few reference points for its practitioners.
Yet it is rapidly becoming a requirement for ever more businesses. “The CDO role is born out of the need to master the challenges and complexities of data. Realising that is difficult – the IT world doesn’t always serve this purpose very well,” he says. Organisations are facing a tsunami of data as conventional feeds get augmented by the massive influx of big data varieties. Keylock notes that the Internet of Things has barely sprung to life but will also soon be driving yet more volume, for example.
In trying to bring that under control and identify where the value of that data might be found, companies need a dispassionate view that is not directly influenced by dayto-day business goals. Dunnhumby may be thought of as a mature data practitioner, yet it only created the role last year and, notably, Keylock points out that it is not a term that is even used internally.
“It has been a change. Even in our business we didn’t have a global lead for data, but instead had leaders in each country,” he says. Having an individual able to view that data asset holistically means the business can learn more about the opportunities facing it. That leads to the other dimension of the task for Keylock, which is identifying what additional data the company and its clients need to acquire.
For a data services provider like dunnhumby it may be relatively straightforward to carve out the territory over which the CDO will have dominion. Elsewhere, it can be more complex, not least because of the dominance of other roles. Retailers which have introduced a CDO have typically made the position subsidiary to the CIO, whereas packaged goods manufacturers tend to make it answerable to the CMO. “There is no right answer – different organisations may have a different fit,” says Keylock.
This highlights one of the major questions which the existence of a CDO prompts – why is this role even necessary if the company already has a CIO? The traditional view of the data industry has been that the value chain runs data-information-knowledgewisdom, which would logically make the CDO secondary to the CIO.
Yet many CIOs have their own traditional views which are more focused on managing the technology solutions to ensure business processes get the information they need to operate effectively. That does not consider the nature of the information in use, how appropriate, accurate or up-to-date it may be and whether other data sources exist that could be better.
A newer breed of CIOs has taken the role forward and is working to “liberate” information across the organisation by freeing it from functional silos. That certainly creates a more data-centred dynamic in the corporate culture, but it still misses the need to think about what other data might exist beyond the enterprise which could prove to be valuable.
For this reason, a growing number of practitioners are arguing for a standalone function based on data and analytics (as voiced by Andy Day of News UK in our cover article on pages 6 to 9). In a whitepaper called, “CMOs lead the data revolution”, technology, consulting and outsourcing company Wipro makes the same point. “One step that is critical to long-term success and accurate predictive analysis based on big data analytics is to create a data sciences department, led by a Chief Data Scientist who reports to the CEO.”
Leaving aside the particular focus on big data and the emphasis on analytics, the core of this view is the same – that the data asset needs board-level responsibility, led by a champion with the resources to ensure it is both utilised effectively and also protected, while keeping an eye on the shifting strategic requirements for data.
P. Srinivasa Rao, vice-president and global business head, analytics and information management, at Wipro points out that this role “has typically been fragmented. Data has been handled in IT under the CIO, business intelligence has sat between the CIO and BI teams and the emphasis has been on pre-defined reports and self-service analytics. Analytics has often been part of a particular business function, such as marketing or the CFO.”
Whether those disparate components can be pulled out of their current position and be welded together into a coherent central function will depend on the industry sector and the maturity level of the business. “In financial services, the IT department is more focused on providing the data warehouse for self-service analytics and BI, but the organisation knows there is a lot more value in that data. So we are starting to see the emergence of the CDO or chief data scientist. However, retailers are lagging behind, although there are a lot of discussions in that sector,” says Rao.
He argues strongly for the need both for a CDO and an independent function. “If it is embedded in another function, especially marketing where a lot of technology budget is moving towards the CMO, their main objective is to understand customer behaviour and the opportunities to cross- or up-sell. But if you really want to look at data, you need to go far beyond that,” he says.
The benefits which might be driven out of improved logistics or a change in customer service may be identifiable through deep diving into the data. But there is no incentive for marketing (or any other nonaligned function) to look at it in that way. Says Rao: “Even if it is the responsibility of the CFO, they will always look at the data from a financial perspective, not customer behaviour or how data can help to grow the business or cut costs.”
Getting to this ultimate end-point is likely to be an aspiration for most organisations right now. One inhibiting factor for the CDO cause is the low number of actual practitioners and therefore proofs of concept for others to follow. This is likely to be the result of many companies developing their data and analytical culture first before they fully invest.
Day’s previous experience at O2 is a good case in point – the mobile telco did not start off with an independent customer intelligence department, it worked towards it across multiple projects over the course of five years. At the moment, business intelligence appears to be regaining traction as the starting place for a new data culture, as evidenced by another O2 alumnus, former head of data management James Morgan, moving to British Gas Energy as its head of management information. Meanwhile, at Microsoft, Stephen Gilbert has the title of head of CRM and data, answering to the CMO, but is driving a data-led vision to help the business transform its customer experience. (All three are members of this year’s IQ Big Data 50.)
Out of such projects will undoubtedly emerge a new set of data champions who will make it to board level and bring with them an entirely new perspective. They may – or may not – have the title CDO. But then, as the McKinsey article points out, the role of chief financial officer didn’t even exist until the mid-1980s when companies needed better value management for their investors. Data is simply following the same route, thirty years later