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TRANSCRIPT
The Rise of the Chief Data Officer
Foreword
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The signs are all around us. The flowers are blooming. The fruit is starting to appear. The harvest will be abundant.
No, we are not talking about farm crops. But we are talking about a booming natural resource. We are talking about data!
Data is now recognized by its more familiar name “Big Data”. Big Data are everywhere, as a result of sensors everywhere. Sensors include human sensors (in social networks and other online venues), retail transaction databases, web documents and web logs, financial records, market numbers, health records, law enforcement tracking, surveillance systems, cyber systems, machines, weather, traffic, huge scientific experiments, massive simulations (of vehicle collisions1, the brain2, the climate, and the Universe 3), and so on. Big Data has grown up – it is now recognized as a fundamental business asset, a natural resource, a driver of innovation, a source of revenue, a creative force for new products and new wealth, a cultural sea change, a disruptive force, a job opportunity gold mine for those
with the right skills, and the sexiest thing happening in the 21st century 4. Many now believe that Big Data has matured, moving beyond the peak of its initial hype and is moving ahead into its promised plateau of productivity. Data has come of age in the corporate boardroom as well. The enormous potential for new wealth, new products, new customers, new insights, and new entrepreneurial business lines has caused a cataclysmic shift in the power of “information” in the corporate executive suite. The existing CIO’s role seems to have solidified in the past decade to that of “Chief Information Technology Officer,” with an emphasis primarily on technology and infrastructure. The new CxO in the boardroom is the data person (the “data lover”). This may be the Chief Data Scientist (focused on the analytics objectives, opportunities, and obsessions that arise in this era of Big Data). But, we also see the CDO (Chief Data Officer) coming into the inner circle of executive power.
Kirk BorneData Scientist, Astrophysicist,
Professor of Astrophysics and Computational Science, Big Data Science Consultant, & Public Speaker
1 https://www.ccsa.gmu.edu/2 http://www.telegraph.co.uk/technology/10567942/Supercomputer-models-one-second-of-human-brain-activity.html3 https://www.youtube.com/watch?v=NjSFR40SY584 http://hbr.org/2012/10/data-scientist-the-sexiest-job-of-the-21st-century/ar/1
The Rise of the Chief Data Officer
The CDO is focused on the data – acquisition, governance, quality, management, integration, policies (including privacy, preservation, deduplication, curation), value creation, recruiting skilled data professionals, establishing a data-driven corporate culture, team-building around data-centric business objectives, and acquisition and oversight of corporate data technologies (not I.T. in the historical sense). The responsibilities are enormous, the requisite skills are CxO-worthy, the challenges are many, and the opportunities to create and define the role are very attractive.
Perhaps the largest role (and biggest challenge) of the CDO will be to manage the titanic shift in corporate culture that moves from traditional business instinct in decision-making to evidence-based data-driven decision-making. This will require silo-smashing on a corporate-wide scale, forging new alliances across departments, and engaging stakeholders inside and outside the business. Only an executive-level position such as the CDO would have the authority and charge to rock the corporate boat and
steer it into new directions of this scale. Admiral Grace Hopper offered this advice (and warning): The most dangerous phrase in the language is, “We’ve always done it this way.” It takes executive-level leadership to shake up corporate inertia, to push for new data-oriented approaches, and to overcome the paralysis of analysis, in order to drive the organization into the unchartered waters where big data analytics are leading the new digital business. The CDO is that leader.
Big Data was the sleeping giant of the digital age, hidden like a seed beneath the soil – but it is now in full bloom. It takes a leader with data savvy to nurture it and to make the most of it. This white paper takes a broad look at the many relevant issues described above. It examines these and many other facets of this new corporate data-driven phenomenon: The Rise of the Chief Data Officer.
The Rise of the Chief Data Officer
Foreword continued
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The Rise of the Chief Data Officer
The Rise of the Chief Data Officer | 1
Chief Data Officer by the Numbers | 2
Chief Data Officers: Which Industries? | 3
Chief Data Officer in the C-Suite | 4
Chief Data Officer Responsibilities | 5
Big Data, Big Decisions | 6
Technology and the Chief Data Officer role | 7
Chief Data Officers and the Data-Driven Enterprise | 8
Contents
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• Where CDOs can be found
• Why they need to be within a C-level role
• What responsibilites and challenges CDOs face
• Emerging technological issues.
Chief Data Officers are becoming a familiar sight in boardrooms and CDO appointments are spreading to new industries. We are entering a new era for big data, and Chief Data Officers are not only defining the industry standards but also the CDO role itself.
Executive Summary
“The importance of effective data management will only increase as devices and sensors collect even more data”
As more organizations realize the importance of managing their data in light of new legislation, business practices and perceptions, the number of Chief Data Officers (or CDOs) is rising. Data management and data-led decision making is too critical not to have a C-level executive with an overall responsibility for it’s management, security and appropriate use. We are on the cusp of a data boom and we are seeing the number of CDOs growing year-on-year.
The importance of effective data management will only increase as devices and sensors collect even more data, the information economy demands greater data integration
and analysis at a faster rate. Businesses increasingly use analytics to drive strategy and innovation, whilst government
regulations and privacy issues dominate news headlines around the world.
In this white paper, we look at the factors affecting the emergence of the CDO role:
“government regulations and privacy issues dominate news headlines around the world”
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The Rise of the Chief Data Officer
Key Statistics
• There are more than 100 Chief Data Officers in large global companies in 2014.(1)
• The number of large global company CDOs has already doubled since 2012.(2)
• 60% of companies, large and small, say they need to hire or are hiring a CDO or senior data leader.(3)
• 70+% of CDO roles were created within the last year. Five years ago, the role wasn’t widely known.(4)
• 66% of large enterprises have a senior data leader and 71% will do so soon.(5)
• 17% of large enterprises will have a CDO by the end of this year and 25% will have one by next year. (6)
• Top CDOs are found in more than a dozen countries, with 60% in the US and 20% in the UK.(7)
• More than 25% of them work in New York or Washington DC due to regulatory drivers.
• More than 25% are female.
• In financial services, 80% of companies in the Americas, 60% in Europe, and 50% in Asia Pacific are moving in that direction.(8)
As more organizations consider the value of making business decisions based on data, we can expect the CDO role to spread even further afield. So where are they found?
1. Gartner, “CIO Advisory: The
Chief Data Officer Trend Gains
Momentum”, 13 January 2014.
2. Gartner.
3. Data Blueprint/Dataversity, “The
Precarious State of the CDO:
Insights Into A Burgeoning
Role”, 2013.
4. Data Blueprint.
5. Accenture, “Analytics in Action:
Breakthroughs and Barriers on
the Journey to ROI”, 2013.
6. Gartner.
7. Gartner.
8. GoldenSource, “Chief Data
Officer’s Role Growing in
Importance”, 18 June 2012.
Chief Data Officers by the Numbers
Companies are increasingly appointing Chief Data Officers and the numbers are growing exponentially each year. There are countless senior information managers, but currently few data experts at C-level with responsibility across the enterprise. In 2014 and 2015, that number will undoubtedly grow.
60%of top CDO’sare in the US
20%of top CDO’sare in the Uk
Top CDOs are found in
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Chief Data Officers: Which Industries?
Executives with the CDO title are largely found in finance, government, and technology. Many companies have senior managers with similar roles and it is likely that many of those roles will evolve into CDO jobs.
The presence of CDOs is driven by heavy regulation, risk and compliance management, the sale of data-driven products and high IT expenditures as a percentage of operating expenditures.
In finance, the financial crisis led firms to establish CDO roles for executives responsible for data quality. Increased regulatory attention to money laundering and tax evasion has also prompted Big Data investments in financial fraud detection.
Governments are challenged by their fundamental responsibilities as a central data source and provider. CDOs create frameworks for treating data as an asset, managing information, coordinating multiple agencies and disseminating information.
Technology companies are driven by their ability to collect vast amounts of real-time data and their desire to monetize that data or utilize it in product design. CDOs help accelerate the speed of analysis and decision making to develop new products and services.
“CDOs help accelerate the speed of analysis and decision making ”
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The Rise of the Chief Data Officer
Chief Data Officers in the C-Suite
Every company is now a data company. Chief Data Officers are moving to the top of the organization hierarchy as data increasingly becomes a business asset. Companies are more and more dependent on data products and data analysis to drive revenue, yet investments in data are minuscule relative to what companies have invested in IT. The management of data is increasingly critical to business decision making and the key data leader needs be part of the senior management board.
New data management frameworks such as MapReduce and Hadoop have enabled organizations to analyze huge amounts of data in much simpler and more cost effective ways. But the task of doing so often falls to already overstretched IT departments, and outside the existing level of skills and training of those departments.
Data warehousing and analysis can be very siloed, which hinders enterprise level reporting and decision making. Different
departments will even have different names for key performance indicators. The result is a fragmented data culture, lacking good data sharing, leadership, data led decision making, and any real sense of cohesive practice.
The Chief Data Officer needs a clearly defined role and high-level authority to manage information, conduct analysis and link them to strategy across the enterprise. CDOs typically report to the CEO or CTO. Naming a C-level data officer also signals to the entire organization that the business is taking data seriously and now recognizes information as an asset.
The CDO role also needs to be at boardroom level because it bridges functions. Purely IT-focused CDO roles tend to lack sufficient business knowledge to truly work across multiple functions. Seating the CDO in a particular business function also has its risks because governance and best practices can’t necessarily be generalised to fit the rest of the organization.
“Chief Data Officers are moving to the top of the organization hierarchy”
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As the CDO role emerges, the actual responsibilities involved vary considerably between industries. The key things they have in common are being responsible for data across the enterprise and driving how the company’s data supports the company’s overall strategy.
Some CDO roles place more weight on using data to drive sales and marketing or R&D initiati ves than on the IT function. Even in government, some CDOs emphasize open data initiatives and transparency, whilst others bear more responsibility for coordination between government departments.
Across the board, CDOs have deep industry knowledge and a willingness to figure out their new role as they go along. When it comes to data, many organizations are establishing brand new structures and implementing new policies.
As a bridge between business and IT, Chief Data Ofiicers’ responsibilities cross functions and involve multiple stakeholders. CDOs have to use their enterprise information management expertise to drive the company’s major business objectives. Making this happen demands keen political skills as well. CDOs have to communicate with those in the boardroom as well as those in the server room.
Chief Data Officer Responsibilities
“a willingness to figure out their new role as they go along”
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Core CDO Duties
• Data Governance and Quality
• Analytics and Business Intelligence
• Data Management and Systems
• Data Security and Privacy
• Best Practices
The Rise of the Chief Data Officer
CDOs face a number of difficulties, not least that it is a new role without established best practices. CDOs are challenged to create value for the enterprise, addressing privacy concerns, manage company politics and recruit other skilled data professionals.
“Many CDOs are the first in their company to hold the role and define it as they go”
Creating ValueMany CDOs are the first in their company to hold the role and define it as they go. Some may even find that rather than creating bigger data initiatives, their role is to pare down data collection and analysis to what is most strategically relevant.
Managing Company PoliticsAs the CDO role emerges, it may initially overlap with other existing roles in the organization. If not clearly defined, creating a CDO within the organization can cause friction, expose existing management weaknesses, add an additional layer of management, lead to budget issues and cause staffing re-allocation from other departments.
Recruiting Skilled Data ProfessionalsData professionals with skills in data management, manipulation and analysis are in high demand. CDOs will need to recruit from outside the organization, train new specialists and also increase general level of data literacy throughout the organization.
Addressing Privacy ConcernsThe increasing use of consumer data creates new revenue opportunities and also puts the enterprise’s reputation at risk. Recent corporate and government data privacy scandals makes customers even more wary of providing data. CDOs will have to play a role in communicating the terms of exchanging data with the company, how it will be stored, how it will be used and how customers can exempt themselves from programmes. CDOs will also take the lead in lobbying governments to formulate better data privacy legislation.
Examples of data that organizations use to create value:
• Personal Customer Data and Demographics
• Internal Sales and Customer Service Data
• Website Data
• Multi-Channel Data
• Loyalty Programme Data
• Travel Data
Big Data, Big Decisions
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Technology and the Chief Data Officer Role
The CDO’s job is to also implement new technologies that augment the company’s strategy. At boardroom level, decision makers need better data analysis and visualization and new insights into how to monetise data. Despite continued advances in IT, organizations’ success with data will depend on their ability to ask the right questions.
Major Technology Issues for CDOs:
Computing and Processing
• The speed of computing is currently limited by the ability to miniaturize transistors.
• Quantum computers cost around $10M, but cloud-based quantum computing will soon be available.
Cost and Scalability
• Companies need to experiment with new approaches, then inexpensively scale them.
• Big Data as a cloud-based service is cost-effective, scaleable and runs quickly.
Privacy and Security
• Security inside and outside the enterprise will be important and companies will need to develop predictive solutions.
• The continued digitization of information and processes will create new vulnerabilities. Sensitive personal information can already be aggregated from using data artifacts without customers entering actual information.
• Governments will be watchful and may begin to make companies liable for security problems.
• More companies will introduce data ethics boards and increase transparency.
Data Storage and Analysis
The three Vs, volume, velocity and variety, will continue to drive technological needs.
The challenge is to identify only the relevant data and find patterns that can drive the business forwards.
“The speed of computing is currently limited by the ability to miniaturize transistors”
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The Rise of the Chief Data Officer
CDOs are moving into the boardroom because ‘data as an asset’ is at the center of company strategies. Finding new sources of revenue and creating new products are increasingly dependent on data. As a result, executives responsible for data management need enterprise-wide authority and responsibility.
Five years ago, few companies had a CDO and now there are more than 100 in large global companies. The majority of organizations surveyed, both large and small, now say that they need to hire one. At the moment, CDOs are mostly found in finance, government and technology. CDOs are more recently found in advertising, pharmaceuticals, energy, automotive manufacturing, health care and utilities. The CDO role will grow quickest in industries where regulation and risk management are important, IT expenditures are high, or customer data drives sales or innovation.
CDOs need to be willing to be the first in their organizations and flexible enough to work with multiple stakeholders and invent
new policies and procedures. Given the infancy of the role, CDO responsibilities differ considerablly across industries, but in general, they are responsible for data across the enterprise and integrating into the company’s strategy. Key CDO challenges
include creating value for the enterprise, addressing privacy concerns, managing company politics and recruiting other skilled data professionals.
The number of CDOs is already growing and will continue to do so as big data and technologies continue to evolve. As companies become better at managing data and using data at their cores, they will also move from
using data to tell us ‘who’ and ‘what’ and ‘how many’, towards asking and answering ‘why’. Throughout the enterprise, people will become better at working with data, combining multiple sources of data and choosing which data to work with. By
integrating effective data management with corporate strategy, CDOs are forging the way
to our big data future.
Chief Data Officer and the Data-Driven Enterprise
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“The majority of organizations surveyed,
both large and small, now say that they need
to hire a Chief Data Officer”
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Acknowledgements
References
The authors would like to thank all the members of the LinkedIn group - Big Data / Analytics / Strategy / FP&A / S&OP / Strategic Planning / Business Analytics / Innovation
CDO’S by numbers
1. Gartner, “CIO Advisory: The Chief Data Officer Trend Gains Momentum”, 13 January 2014.
2. Gartner.
3. Data Blueprint/Dataversity, “The Precarious State of the CDO: Insights Into A Burgeoning Role”, 2013.
4. Data Blueprint.
5. Accenture, “Analytics in Action: Breakthroughs and Barriers on the Journey to ROI”, 2013.
6. Gartner.
7. Gartner.
8. GoldenSource, “Chief Data Officer’s Role Growing in Importance”, 18 June 2012.
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The Rise of the Chief Data Officer
Featured Contributors
The authors would like to thank all the members of the LinkedIn group - Big Data / Analytics / Strategy / FP&A / S&OP / Strategic Planning / Business Analytics / Innovation for the continuing sources of new information and discussions around data.
George Hill
Managing Editor of Big Data Innovation, a magazine dedicated to the spread of new ideas and technologies within the data community. He has been writing and researching around the subject for the past 4 years as well as collaborating with and interviewing some of the major players within the space.
Chris Towers
Big Data Divisional Head at the Innovation Enterprise. Since Joining in 2012 Chris has immersed himself with the Data Community on a global scale, bringing key decision makers, pioneers, leading experts of all seniorities under the same roof. With an avid interest in all things Big Data, Chris is passionate about Big Data Innovation and the future the industry and practices hold helping pave the path forward for practitioners working in the field.
Kirk Borne
Kirk Borne is a Data Scientist and Professor of Astrophysics and Computational Science in the George Mason University School of Physics, Astronomy, and Computational Sciences. He has been at Mason since 2003, where he does research, teaches ,and advises students in the graduate and undergraduate Data Science, Informatics, and Computational Science programs. Previously, he spent nearly 20 years in positions supporting NASA projects, including an assignment as NASA’s Data Archive Project Scientist for the Hubble Space Telescope, and as Project Manager in NASA’s Space Science Data Operations Office. He has extensive experience in big data and data science, including expertise in scientific data mining and data systems. He has published over 200 articles and given over 200 invited talks at conferences and universities worldwide. Follow him on Twitter at @KirkDBorne.
Authors
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The Rise of the Chief Data Officer
Contacts
Chris TowersBig Data Divisional Head +1 (415) 992 [email protected]
Deanna NoticeVP, Marketing +1 (415) 992 [email protected]
Hannah SturgessDirector, Demand Generation Partnerships +1 (415) 992 [email protected]
George HillManaging Editor & Online Director
+1 (415) 992 [email protected]
The Rise of the Chief Data Officer
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