Is It Time for a Chief Data Officer?

Data’s ubiquity both inside and outside the corporation begs the question: Is it time to expand the C-suite to include a Chief Data Officer? Our short answer to that question is “yes” and our long answer is “heck yes.”

Historically, Fortune 500 companies have expanded their C-suite in reaction to an increase in the strategic and operational complexity that their organizations face, often linked to major technology disruption. The CFO rose to prominence in the 1980s which coincided with the advent of the electronic spreadsheet that enabled increased analysis of return-on-invested-capital and a firm’s value. The CIO was established when big iron technology moved out of the back office and into the front office with the adoption of the mini-computer and PC. The CMO was elevated with the advent of the Internet, multiple channel management, and new digital media.

Today, we are witnessing an exponential increase in data in terms of volume, velocity, variety and value. Data has been driven by the proliferation of five disruptive technologies: social media, mobile devices, cameras, sensors and cloud computing. The non-linear price point collapse in data storage and data transmission costs has significantly increased the amount of global data that is available for acquisition and analysis. Data’s ubiquity both inside and outside the corporation begs the question: Is it time to expand the C-suite to include a Chief Data Officer? Our short answer to that question is “yes” and our long answer is “heck yes.”

If you examine the history of data processing, the early 1980s were all about the automation. Computers were leveraged to complete mundane, usually arithmetic tasks, much faster and cheaper than humans. Data was processed, manipulated and maintained in one place, the mainframe computer. During the 1990s and early 2000s, optimization shifted from hardware and infrastructure to software and applications. Client-server architectures became popular as firms distributed processing and data to put more capabilities into the hands of the end user. Today, data is everywhere—stored everywhere and expected to be available to employees and customers everywhere. Data proliferation has created a new dilemma. Every part of the organization creates data and every part of the organization uses the data, yet for the past 20 years, no one has owned the data. And unlike the majority of other corporate assets—such as brand, cash and talent which are shared and managed at the enterprise level—data remains elusively embedded in organization silos.

If you want to improve business performance and move beyond knowing what is happening to understanding why it is happening and, in some cases, predicting what will happen next, you need both an enterprise view of data and an organization with a leader responsible for ensuring the data is shared across the enterprise.

Contributed by Larry Kolek and Alan Matsumura.