Your data is costing you a fortune! How can this be, after all your top executives have rigorously focused on budget and resource management reducing the overlap of applications and the duplication of processing efforts throughout the organization. Congratulations, you have successfully positioned and managed data as a byproduct of application processing. Data is not being handled like the organizational asset everyone claims it to be.
In order to embrace the value and power of data in this rapidly evolving digital era, a companywide approach must be adopted. New roles, responsibilities, organizational commitments and executive buy-in must be generated to elevate the importance of data throughout the organization. In a recent keynote at the MDM and Data Governance Summit, I outlined the responsibilities of a chief data officer. The CDO is an emerging role to which organizations are increasingly turning to help address the growing gaps in managing and harnessing the value of data.
Don’t get me wrong. The CIO isn’t going anywhere. Bringing on a CDO or adding new authoritative supporting roles should not be a replacement for a CIO, or any other C-level position for that matter. The CDO should be an enhancement to the existing organizational structure and complement the positions that are already working hard to drive the business forward.
Changes, Gaps and Emerging Trends
The need for a new role does not assume that current leaders are not doing their jobs. In fact, it suggests quite the opposite. Business and IT leaders are doing well, and if the landscape of data were to remain the same, we wouldn’t need to consider change. But the landscape is changing and it is doing so at a rapid pace. These changes are widening the gaps between business requirements and capabilities and creating new challenges that must be addressed.
Landscape changes The sheer volume of data generated today has drastically altered how organizations must approach their data strategy. This includes data classification, architecture, modeling, quality and management, and governance. The wide array of diverse data sources available to companies today is staggering. The ability and flexibility to adapt as the requirements for these sources change requires dedicated, unyielding attention to internal and external data landscapes.
Gaps and challenges It has become the gold standard to map data strategy to key business initiatives and use tactical data actions to enable the business. The potential value of data far exceeds what is outlined in our current business goals and objectives. The question should no longer be “How can data enable our business?” but rather “What can data allow us to do that we previously thought impossible or that we have not thought of before?”
Emerging trends Social media, location based data, mobile devices, virtualization, cloud technologies, and the general public awareness of data use are all changing how data is created, consumed, managed, distributed and stored. General IT oversight does not address the many facets of emerging data technologies, the capabilities they provide and the risks they present. The organizations that are consistently on top of these emerging trends will be the ones rewarded with competitive advantage.
One Size Does Not Fit All
Not all organizations need or are ready for a CDO. For some, the formal assignment of the authoritative roles and responsibilities that surround and support the company’s data will be an appropriate alternative. When considering whether a CDO makes sense in your company, factor in these things:
Organizational culture What does your current C-Structure look like? Will the addition of another C-level executive be welcomed as a valuable enhancement with a focus on a specific organizational asset or will it be viewed as a disruption caused by the misunderstandings about the new role or the emergence of new titles? Be careful not to get hung up on titles if this is the case - focus on responsibility and accountability for the company’s data. The purpose of the chief title is to designate the highest authoritative level of a specific business operations responsibility. Note: Not all chief positions report to the CEO. “Are You Ready for a Chief Data Officer?” written by Thomas Redman in the Harvard Business Review is good food for thought on this.
Organizational structure - Organizational charts delineate relationships, lines of empowerment and authority. Organizational structure informs the coordination and supervision of operational procedures. If adding a top-level executive doesn’t fit the style of your organizational structure, that’s okay. Add a position of data authority (with authority over people, technical resources and budget) at the level that makes sense within your company. Just make sure the position has organizational authority to drive change down and credibility to manage up so data doesn’t get lost or ignored in the boardroom.
Size of the organization There are two ways to assess the size of the organization in respect to executive oversight for data: the number of people in the company and the amount of data that flows through the organization. Managing the “people side of data” is a challenge all its own. The more data touchpoints that exist, the more challenges and needs will arise. Larger organizations need more managers as there are inherently more responsibilities; whether the managers should be executives or not goes back to the consideration of culture. Organizations that do not have high employee counts but work with large volumes of data will also significantly benefit from raising the importance of data to the highest authoritative position.
Choose Your Strength Light, Medium or Bold
The executive commitment to not just managing data as an asset but to increasing its value is critical. A companywide focus on data to drive innovation and gain competitive edge needs to be promoted throughout the organization. Redefined or renewed executive focus on data can come in the form of a new C-level executive, the chief data officer, or in the form of executive sponsorship and support of new authoritative positions reporting within the existing organizational structure. Consider these options:
CDO Light For organizations that are not ready to add another Chief position but have an emerging recognition of the importance and value of data. Each line of business reporting into a C-level executive has a position of data authority. These positions are responsible for the oversight, management and promotion of data within their reporting structure. They should be given the authority to act and manage people and resources for all things data-related. They should be encouraged to drive innovation through the use of data and to increase the value of data within their lines of business. For the purposes of maintaining consistency across the organization, they maintain a working relationship with the position solely responsible for enterprise data management. The enterprise data manager leads the organization’s data initiatives and should be given the voice and authority to do so. The enterprise level responsibilities of this position focus on the practices and tools used throughout the organization to ensure standardization and reuse. This position is accountable for the reduction of data costs and activities and should regularly audit across the business verticals to ensure all data policies and procedures are followed. Because there is distance between the enterprise data management officer and the senior executive levels, communication between them needs to be clear, transparent and frequent as to the needs, successes and challenges that data presents throughout the organization. The executives under which the enterprise data management officer reports should consistently demonstrate commitment and support for the organization’s data strategy. This is illustrated in Figure 1.
Figure 1: CDO Light. For illustration purposes only not a template for organizational structure. Your mileage may vary.
CDO Medium For organizations that have a C-suite with strong technical and business leadership and do not currently want or need to add another C-level position. Nevertheless, executives at these companies realize that data creates significant value. In this model each line of business has a position responsible for the execution of the companywide data strategy developed and managed by the enterprise data team under the direction of the CIO. The vertical data authorities serve as extensions of the enterprise data team which collectively are responsible for the company’s data strategy including design and architecture, process and policy, and administration and enforcement. The vertical authorities help to ensure data is shared throughout the organization and that data remains a key business driver. The leader of the enterprise data team will work closely with the CIO to be the consistent voice of data, responsible for effectively communicating data’s role in business initiatives. This is illustrated in Figure 2.
Figure 2: CDO Medium. For illustration purposes only not a template for organizational structure. Your mileage may vary.
CDO Bold For organizations with a strong data strategy who are ready to take data to the next level. They realize that data plays a key role in competitive and operational excellence and will seek to drive the business with innovation via the capabilities of data. Managers in these organizations will pull up a chair for the CDO at the boardroom table and welcome him/her with ideas and questions. Instead of asking how data can enable the business, they will ask “What is our data capable of where can it take us next?” and “How can we use our data to set us apart from the competition?” The executive team will not be worried about whether the CDO is replacing them or carving out pieces of their responsibilities because they recognize that the CDO is bringing to the table a new set of responsibilities and capabilities that will help advance the business into uncharted territories. In this model, the chief data officer works with executive peers representing the needs, challenges, and capabilities of data in every business discussion. The CDO is responsible for the enterprise data strategy and cultivating a data-driven culture. All positions that are data-related exist in the CDO’s reporting structure. This is illustrated in Figure 3.
Figure 3: CDO Bold. For illustration purposes only not a template for organizational structure. Your mileage may vary.
Addressing the rapidly growing needs and capabilities of data will require new roles and responsibilities. Regardless of how the roles and responsibilities are implemented, the companywide attention to data must increase. The discrete accountability and focus on data created within the organization will maximize data’s potential value, drive innovation, and gain competitive edge. Long live the CDO, CIO, CTO, CEO and any other C that can make this happen!