The role of chief data officer became a buzzword for most part of 2020 but in 2021, this title is increasingly becoming popular in enterprises. The chief information officer role is commonplace in organizations but the chief data officer is becoming important because of using data to drive organizational goals. The traditional CIO handles the information side of things but the chief data officer should answer questions including data management, data quality and business analytics.
The chief data officer is an evolution from the chief digital officer, another role that happens to have similar initials with the chief data officer¹. The modern organization needs the chief data officer to align the strategy and vision of the company with data strategy. Unlike the chief information officer focused on information processed by the organization, the chief data officer looks at how to harness technological value for business profitability.
The hiring of chief data officer role is increasing according to Glassdoor as enterprises upgrade their data and analytics infrastructures. In 2021 alone, hiring in the chief data officer category will increase by over 40% as organizations seek to harness growth from technology. It is worth noting that the chief data officer position did not feature in most organizations until after 2000 when companies including Yahoo realized the important of CDO’s. The C-Suite must collaborate with the chief data officer for the organization to achieve the benefits of technology investments.
Are CDO’s a threat to CIO’s and CTO’s? The answer to this question is obvious that chief data officers have their specific roles and will not undermine the roles of other technology leaders in the enterprise. For example, the chief technology officer has a more general role compared to the chief data officer who has to focus on real data and analytics² of the company. These roles intermarry and most important, they streamline decision making and enabling the business to become competitive with good data practices.
Roles of a Chief Data Officer
1. Overseeing Data Quality
Here is one truth: No organization can survive without good data quality practices as they influence business value and outcomes. The data strategy of an organization relies on the clean state of data and the chief data officer handles this area. Unlike the chief technology officer who has multiple roles, the chief data officer focuses on improving data quality and helping the organization attain the set goals.
Good corporate data standards have become the norm as organizations seek value from their data systems. The chief data officer explores the data systems of the organization and finds ways of using the data to make the business competitive. Data silos³ are a challenge for most organizations where they fail to derive value from their data and the chief data officer ensures that the organization optimizes data.
2. Championing Data Culture
Most organizations struggle with instilling a data culture in their operations and the role of the chief data officer has made this easier for companies because of mobilizing stakeholders within the organization. A good data culture includes smooth movement of information and data within the organization while eliminating the roadblocks that come in the way of efficient data systems. The chief data officer communicates the data vision of the organization to the C-suite⁴, employees and other stakeholders.
The success of data culture in an organization depends on the education offered to stakeholders. A recent survey by McKinsey found that educating stakeholders about the value of data and implementing best practices improves business outcomes by more than 50%. From these findings, it is clear that chief data officers are critical in driving the culture of data in organizations through education and communication.
3. Data Ethics
Data ethics is arguably one of the most sensitive topics in the enterprise and consumer world today. An ethical data culture ensures that data achieves the required goals without harming or undermining the privacy of users. The instances of AI bias⁵ is a good example of why the data ethics debate needs a sober approach to understand best practices. Tech companies such as Facebook have faced lawsuits because of intruding user privacy and this comes down to data. Enterprise data ethics strategy encompasses transparency, accountability and integrity. The chief data officer oversees the implementation of data ethics and advises the organization on decisions around responsible use of data.
4. Systems Security and Data Governance
Data systems face threats and with breaches happening such as the Equifax hacking and Bitcoin, data protection is critical for enterprises. The chief data officer has an understanding of data systems within an organization and works with the C-suite to ensure protection of the data systems. Encryption practices developed by chief data officers support the systems security strategy of organizations by reporting risks and recommending methods to harness value from data⁶.
5. Business Intelligence and Analytics
Every business hires a chief data officer to communicate about business intelligence and profitability with the current technology investments. Analytics assist chief data officers to visualize and understand business value and chief data officers collaborate with the C-suite in implementing strategic roles based on data. Without a good a business intelligence⁷ model, a business faces high risks and the chief data officer makes sense of the current analytics by communicating to the C-suite.
Data is a Good Driver of Business Performance
As a chief data office of an organization, you have so much on your plate. From advocating strategic goals around data, implementation of data analytics and collaborating with the C-suite, the chief data officer must understand how to implement innovation across the board. As mentioned, data faces multiple risks and organizations may not achieve these benefits unless the CDO outlines and understands the data strategy and ways of reaching the goals.
Start-ups and technology companies in 2021 are investing in chief data officers to assist in understand performance metrics⁸, outlining risks and maximizing the benefits of data. Chief data officers have a responsibility to create the right environment for data analysis and implementation to improve business competitiveness.