The Role of the CDO
The exponential growth in the diversity, quantity and availability of data is complicating the job of managing enterprise data. To manage and create value out of these critical data assets, a new C-level position has been created: the CDO. The primary goal of the CDO is to realize the value of data across the enterprise. This leader must be laser-focused on data, understanding, marshaling and applying organizational data resources in support of the enterprise business strategy. If not, she is diluting her own effectiveness. In order to be effective, there are three primary areas in which the CDO should be focusing her efforts: strategy, execution and governance.
By now, everyone knows that there is tremendous potential to capture value through data. From reducing costs by improving quality, to enriching existing products and services through consumer informatics, to innovating by bringing big data and analytics to bear, data is everywhere. It influences everything. Managing enterprise data continues to be a part of the CIO’s agenda, which includes managing technology and associated processes. The exponential growth in the diversity, quantity and availability of data is complicating the job of managing enterprise data. To manage and create value out of these critical data assets, a new C-level position has been created: the Chief Data Officer (CDO). The primary goal of the CDO is to realize the value of data across the enterprise. This leader must be laser-focused on data, understanding, marshaling, and applying organizational data resources in support of the enterprise business strategy. If not, she is diluting her own effectiveness. In order to be effective, there are three primary areas in which the CDO should be focusing her efforts: strategy, execution, and governance.
1.) Supporting Enterprise Strategy
From a strategy perspective, the CDO must ensure that enterprise data use is in alignment with the enterprise data strategy and broader business strategy. The enterprise data strategy influences the CTO and CIO agenda by developing a comprehensive roadmap of the data assets and data architecture needed to enable a long-term business strategy. For example, if the company is shifting from a business-to-business (B2B) model to a consumer-centric one, the CDO must be able to align the appropriate data assets that enable a 360-degree view of the customer across all channels. This includes customer master data sources, call center data sources, web channels and all other customer touch points. These data sources must then be aligned to support the specific business questions, objectives and hypotheses that need to be answered. Another example is if the company is pricing optimization. In this case, the CDO must be able to work with executives from the marketing and product teams to ensure the disparate data sources are aggregated to facilitate the type of sophisticated analytics necessary to optimize pricing decisions.
2.) Enabling Business Execution
When it comes to execution, the CDO must focus on continually improving data maturity and quality. She must ensure that increasing levels of detail can be captured to improve the specificity and positive predictive value of the data throughout the enterprise. Organizations that have reached increasing levels of data maturity ensure that data is fit for its intended purpose. This means that the CDO must take ownership and accountability for improving how data is defined, acquired, stored and distributed within the organization and across external partners. The CDO must focus on quality by implementing standard data management activities, processes and methodologies with an eye on continuous improvement. She must also align critical activities to the strategy-aligned enterprise data roadmap. Her organization’s work products must be stored and employed in a manner that supports development activities and facilitates data integration.
The effective CDO understands that data management supports execution and systems development (e.g., MDM, test data prep, and other delivery concerns) but is independent from application development. While systems development is about delivering functionality to a subset of the organization, data management focuses on supporting business processes across the organization. Data management is informed by application requirements and technology architecture and it adopts a symbiotic relationship across applications to facilitate reporting, business intelligence and analytic decision-making. Therefore, while the CDO focus is solely on the data assets, interrelated activities are supported (e.g., development lifecycle activities, operations). Given these constraints, it is important to define the specific functions that fall under the purview of the CDO. To be specific, all data management functions coordinated at the enterprise level fall under the CDO. This includes data architecture, data quality, metadata, document management, content management, analytics, data warehousing, business intelligence, reference data, master data and data security. While not solely responsible for operations and data development, the CDO should work with the CIO and CTO organization to optimize business and IT performance.
3.) Governing the Data Assets
The CDO is the C-level representative for data governance and data stewardship in the organization. The CDO ensures that shared data across the organization is well-handled from ownership, access, quality and security perspectives. The leader is responsible for a number of key data governance goals. First, he should define what constitutes shared data across the enterprise and articulate how it is used by the business (e.g., what it is, how it flows, how it’s consumed, what the problems are with it). Secondly, he should define enterprise-wide objectives and a strategy for cross-department shared data management. This includes definition of the long-term roadmap (i.e., the multi-year movie). Next, he should create and improve data governance processes and artifacts, including getting departments in sync and holding them accountable for their responsibilities. He should also sponsor programs of work within and across departments to close gaps in enterprise’s data management processes and drive resolution of cross-department shared data issues. Finally, he should influence enterprise’s business and technology strategies from a data management perspective.
In order to be an effective data steward, the CDO must focus and align key leaders from across the organization to achieve the broader data management goals. He must first put in place a data governance lead that will shepherd the cross-department data governance processes and artifacts (e.g., policies, standards, governing bodies). This person will operate the cross-department data governance processes (e.g., running committees, tracking access, reporting on quality), sponsor implementation and usage of data governance tools and techniques, engage in the execution of the data management program of work and resolve cross-department shared data issues and escalate critical items to the Chief Data Officer for resolution. This is a collective effort. For data to be effectively governed and managed at the enterprise level there must be a broad, strategic vision, a focus on execution and the governance tools and processes in place to effectively manage this large endeavor.
Being an Evangelist for Data
So, how does the CDO get things done? In order to be successful, the CDO must act as a data evangelist—promoting the organic development of improved data practices and adoption of industry best practices. He must possess superior leadership skills to inspire and motivate staff, excellent communication, interpersonal relations and negotiation skills. He should be well-regarded in the industry and abreast of the latest developments in data management, promoting improved data practices within and across organizations. The CDO is responsible for overseeing work that is highly complex and varied in nature. Therefore, he must focus on the double bottom line, the ability to optimize business performance through data while being able deliver leadership for the common good of the organization.
In closing, the CDO is responsible for data that is owned, leveraged and influenced by several individuals. Yet currently, no one is solely responsible. Managing it correctly will allow the organization to enable and drive differentiation, strategic values and outcomes. The role of the CDO is fairly new and it is still absent in many enterprises. The mandate of the CDO is evolving and each organization will have particular nuances to the role and subsequent charter. Nevertheless, common to every CDO mandate and at the very top of the list, is reducing costs and increasing value of the enterprise’s ever-growing data assets.
Contributed by Larry Kolek, Alan Matsumura, Kevin Henderson, and Ricardo Vieira.