Chief Data Officers and Magic Data Dust

The role of the chief data officer is integral to organizational success in the modern data-driven world. For enterprise organizations to derive maximum value from their data, a chief data officer plays a vital role in ensuring trusted data through data governance, data privacy, and data security.

About the author

Leigh van der Veen

Senior Database Consultant, Product Perfect

Senior Database Consultant with over 25 years experience for clients around the world, running all manner of database systems.

The CDO is dead...but long live the CDO. You may hear either sentiment, depending on who you ask. The Chief Data Officer is the newest C-suite position, but perhaps the most frequently misunderstood. Didem Un Ates can articulate the value of the CDO role as well as anyone in the industry. After 10 years of progressive experience in the AI and data space, she recently concluded a stint in the Microsoft CDO office, focused on supporting the needs of CDOs at organizations around the world. She explained the value and priorities of today’s Chief Data Officers succintly at the 2023 All Around Azure Conference, during her keynote address:

“We see them (CDOs) as strategic visionaries who unlock the power of data. That’s what is critical.”
Didem Un Ates speaks at a Microsoft event. Source: Spearkerhub

Un Ates went on to list the most essential priorities and opportunities for CDOs in 2024, along with some strategies tor overcoming the challenges of:

  • Data quality
  • Data literacy and culture
  • Analytics strategy
  • Data governance / management capabilities
  • Privacy and compliance

With the continued acceleration in the accumulation of data, the advent of AI and machine learning, and the challenges associated with storing, processing, and governing data, the chief data officer's role is increasing, not waning, in importance. Gartner describes the CDO role as being, “one of the toughest seats at the executive table," albeit a necessary one in today’s climate. Yet, in many instances, the CDO role is perceived as an expensive and unnecessary convenience, sometimes due to a lack of understanding of what the CDO actually does.

Let’s expand on this topic with a brief history of the chief data officer’s role, their day-to-day operational functions, and the benefits of hiring a CDO.

The Chief Data Officer: A brief history

In the years preceding 2002, the manager for data processing operations was not a C-suite role. As organizations have increasingly recognized the importance of prioritizing Information Technology (IT), Business Intelligence, and data management, the data officer's role has become a visible and integral executive position with widespread authority.

The American bank holding company Capital One Finance Corporation was the first to employ a chief data officer in 2002. Only a few other organizations followed suit in the years between 2002 and 2012. This trend changed rapidly just a few years later, although the growth of the CDO role has now leveled off.

CDO Growth Rate. Source: Janco

Yahoo made their own significant CDO appointment in 2005. By 2021 NewVantage Partners' Big Data and AI Executive Survey found that 65% of senior Fortune 1000 business and technology decision-makers said their organization had appointed a CDO.

Early CDOs focused primarily on data governance, data quality, and data security and regulatory requirements. Today’s leaders are focusing more on spearheading their organization’s data-driven transformation to become a data-first company. Going forward, the CDO will continue to play a mission-critical role in the modern digital organization.

The role a CDO plays in day-to-day business operations

In an article entitled, "3 Top Take-Aways from the Gartner Chief Data Officer Survey," Gartner attempted to describe the day-to-day life of a typical CDO:

"Within this challenging role, they unlock data-driven innovation as well as integrate disparate data and analytics capabilities into a strategic discipline, all while delivering a steady drumbeat of quick-win, high-value projects."

Minda Zetlin of cio.com had a slightly different take on the CDO role, describing it as such:

“What is a chief data officer? A leader who creates business value from data. CDOs oversee a range of data-related functions that may include data management, ensuring data quality, and creating data strategy. They may also be responsible for data analytics and business intelligence.”

A successful chief data officer must also have business acumen and focus, a deep insight into the business’s core functions, and a critical understanding of the direction the industry is going to ensure that the data is correctly utilized and provide meaningful insights into forward-looking strategic decisions.

Distinct from the CTO and CIO

Even though some CTOs and CIOs see the creation of a CDO role as an encroachment into their respective territories, the boundaries are quite distinct.

  • CDOs are responsible for data quality, data governance, master data management, data science, business intelligence, and data analytics.
  • The chief technology officer (CTO) is responsible for developing technologies that grow the business externally by selling to customers.
  • The chief information officer’s (CIO) primary focus is on managing the company’s infrastructure and running its internal IT operations.
Source: Harbott

The chief data officer is also distinguished from the CTO and CIO by assuming responsibility for the following day-to-day functions:

  • Advising on data governance, including monitoring and governing enterprise data.
  • Leading initiatives to improve data quality, data availability, and data efficiency.
  • Driving innovative digital transformation, cost reduction, and increased uptime.
  • Supporting the data analytics strategy, including analytics and reporting on all aspects of the business.

The benefits of employing a chief data officer

By 2025, it is estimated that there will be 175 zettabytes of global data, which amounts to 150 times the number of observable stars in the sky. With the advent of 5G and the IoT, 30% of this data will be generated in real-time.

Data Generated Globally. Source: Zdnet

This data influx, combined with the obvious value of the distinct CDO role and the increasing corporate reliance on AI and Big Data, are among the reasons it may be wise to add a CDO to your organization, if you haven’t already. Employing a chief data officer also brings the following advantages:

1. Dependable and reliable data for the business

The ability to trust business data sources is imperative to an organization’s success. If the data is not of high quality, management will not use the insights derived from this data as part of the business’s strategic decision-making processes, regardless of the source. In other words, for the data to be trusted, it must be dependable and reliable. One of the CDO’s key functions is to ensure data quality and reliability.

2. Reducing data debt

Data debt refers to the accumulation of inefficiencies, inconsistencies, inaccuracies, and shortcomings in an organization's data infrastructure over time. It's a concept similar to technical debt, which refers to the shortcuts and compromises made during software development that can lead to future problems.

If organizations do not prioritize proper data governance, their data debt will increase exponentially and will ultimately require drastic intervention. Employing a chief data officer helps to ensure the organization’s data governance strategies improve, and data debt is reduced over time.

CDO Benefits. Source: Sketchbubble

3. Data democratization

Data democratization means everyone has equal and equitable access to the organization’s data. This gives non-data-specialists the ability to analyze data in a self-service business model, without enlisting the data team’s expertise. Data democratization minimizes the gatekeepers and make it possible for all employees to leverage data assets and accelerate decision making.

The CDO can promote data democratization by developing strategies that empower employees to access, understand, and use data to make informed decisions. This includes the oversight of privacy initiatives and security functions (in conjunction with IT teams) to mask or obfuscate sensitive data that not all associates should be privy to.

4. Improving the data culture

For an organization to evolve into a data-driven, data-first company, a cultural shift must occur throughout the organization. Companies with strong data-driven cultures often have equally strong CDOs and executive management teams in place to set expectations and drive new policy deployment. The presence of a CDO also improves the data culture by:

  • Promoting data literacy through training and educational programs.
  • Encouraging transparency and openness around data sharing.
  • Fostering a culture of collaboration across departments.
  • Leading by example through data-driven decision-making.
  • Providing tools and resources for self-service data exploration and analysis.
  • Recognizing and rewarding data-driven initiatives and successes.
  • Regularly communicating the importance of data and its impact on the business.
  • Breaking down barriers to change regarding data usage and access.

The age of the CDO has just begun

The role of the Chief Data Officer (CDO) continues to gain significance in today's digital landscape, as organizations grapple with the growth of data and the imperative to derive meaningful insights from it. As highlighted by industry expert Didem Un Ates, the CDO is increasingly seen as a strategic visionary who unlocks the power of data, guiding organizations through data-driven transformations to become data-first entities. With priorities ranging from data quality to analytics strategy and privacy compliance, the CDO plays a pivotal role in shaping a company's data culture and driving innovation. Despite ongoing skepticism and misconceptions surrounding the necessity of the CDO role, its value in ensuring dependable data, reducing data debt, promoting data democratization, and fostering a data-centric culture has become undeniable.

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