Contrary to popular belief, the role of Chief Data Officer (CDO) has been around for nearly four decades. Ever since the 1980s, CDOs have been a pivotal part of the executive leadership team.
Initially, CDOs were mostly responsible for the “data governance” of the organization. Yet in 2007, when the housing bubble burst and U.S. economy was hit by the Great Recession, a new need for chief data officers emerged. Financial services were now under greater scrutiny from the American government to meet regulatory requirements. Struggling to access key data, hundreds began recruiting chief data officers to marshal, protect, and monetize data.
These duties swiftly expanded until CDOs were formally tasked with using data to identify new revenue opportunities and improve the customer experience. As a result, by 2010 the majority of CDOs were far more invested in reporting, business intelligence, data integration, master data management, and data processing.
Despite this dilation in responsibilities, by 2012 only 12% of firms had appointed a CDO. While this may seem strange now, at the time many executives were still dubious that data would play such a vital part in transforming the business to justify adding a position to their C-suite.
Around 2016, however, many businesses were starting to realize how data was becoming “the new oil”, a valuable asset when extracted and properly refined. Except unlike oil, data was a renewable resource, infinitely replicable and able to grow exponentially.
With 90% of the world’s data having been created in the past two years alone, organizations could no longer deny calling data a fundamental business asset. Nor could they ignore the deadline for GDPR, which was fast approaching. Worried about regulatory compliance and eager to avoid fines, businesses now had double the reason to hire CDOs: first to create data governance policies; and second to improve data quality, accessibility, and overall strategy.
As this perfect storm of market pressures converged, by 2018 a whopping 63% of enterprise would have chief data officers on their executive teams. Almost overnight, CDOs were the new linchpins of digital business transformation. In fact, Gartner now estimates that by 2019 roughly 90% of large companies will have a CDO in their ranks, encompassing a diverse array of duties, such as:
- Leading enterprise strategy, governance, and management of information and data assets
- Collecting, controlling and securing data as well as maximizing data’s value with accessibility throughout an organization
- Strategically identifying new revenue opportunities for big data through data processing, analysis, data mining, information trading, and other means
- Increasing the value and quality of the organization’s data while reducing costs of managing data
- Ensuring business users have easy access to relevant, quality data and reporting tools
- Abiding by the laws imposed by regulatory authorities
- Determining ethical use of data through algorithm management and data modeling
- Architecting future-proof data solutions by planning, designing, and building data systems and ensuring successful integration with other systems in an organization
- Integrating siloed databases and data stores, making data easier for analysts to find and transform
- Work closely with the CIO, CMO, and CTO
Because the chief data officer role is a newly emerging position in the enterprise, there is often flexibility on how to execute for this kind of success. How they evangelize data sharing or monetize new products from data is up to them, leaving a lot of room for creativity.
Overall, though, a CDO must be a shrewd data strategist. He or she must be a steward for improving data quality, without sacrificing privacy and security. To ensure data consistency, CDOs must always be keen to account for how different departments may employ unique definitions for leads and customers, and establish standards for such metrics with relevant stakeholders.
Data silos can often present a big barrier to data quality. CRMs may hold duplicate records. Marketing automation records could be out-of-date. Some data is always changing, while other data stays the same. Some data should ingested and stored, while other data may be best kept for a short time. Thus, a CDO’s goal in integrating data silos needs to not only take silos into account, but to have a strategy to prevent future silos and know what type of data to extract, transform, and load for secure storage. All of which are good reasons to use a cloud data warehouse.
Should your organization hire a CDO? Well, that usually depends on the size of your company. Compared to SMBs, larger organizations, which collect and manage more data, are far more likely to need a CDO. Still, as data takes on a central role in our daily lives, permeating nearly every activity in the business and public sectors, any serious organization, regardless of industry, will need an executive in charge of governance and utilization of information as an asset. That said, technology and financial companies are much more apt to need analytics, reporting, and warehousing capabilities than other sectors. And it’s for this reason that they’re hiring CDOs as a rate far faster than ever before, and unifying data silos with a cloud data warehouse.