Data is the heart of modern business — the fuel powering organizations forward. However, many are still struggling to unlock value from the wealth of information they hold, with organizations across EMEA unable to use a third (33 percent) of their data effectively. For some, a primary reason for such ineffective use of data is the absence of a C-suite executive with accountability to modernize technology, author enterprise data strategy, and accelerate a data-driven culture: the Chief Data Officer (CDO).
Some believe the C-suite is already overcrowded and the thought of adding another position is unappealing, but in the contemporary business landscape, data is increasingly shaping corporate strategy. Without a CDO, the C-suite will miss key opportunities.
The role of the CDO
The CDO owns and drives data strategy for the business. They manage how data is collected, controlled, and put to use to achieve corporate objectives. They discover and execute opportunities to monetize data and accelerate digital transformation.
The CDO advocates for data initiatives. Without such a data champion, the C-suite will be less likely to discover integral data insights given the overwhelming proliferation of data.
Here are five reasons why organizations need a CDO:
- Establish a data-driven culture within the organization
The C-suite heavily influences the culture at a company. If they do not mandate and practice data-driven decision making it won’t become a part of the culture.
While anyone can talk about implementing a data-driven culture, an effective data strategy requires action. The CDO drives the implementation and use of platforms, tools, and processes to support a data strategy. The CDO also helps shape, communicate, and implement the data strategy and vision to all stakeholders.
Without a CDO, data could become an afterthought. Another member of the C-suite, such as the CIO, could be assigned data-related tasks in addition to their core responsibilities. Developing a data strategy is unlikely to be their top priority and a data-driven culture may fail to get established all together.
- Inspire and motivate the data team to achieve business goals
To implement an effective data strategy, data teams need a CDO to lead and motivate them through clear communication, well-defined goals and — when needed — course correction.
Without a leader, data teams may feel misunderstood and unmotivated. Collecting and storing data from various sources is insufficient as a sound data strategy because data alone won’t generate business value. Data teams need to understand the types of data they are handling and where it comes from to properly set KPIs and goals for the data. Without well-defined objectives, spearheaded by a CDO, organizations may not be able to derive full value from their data.
- Encourage concrete returns on investment
Data-related choices must be made with Return on Investment (ROI) in mind. Although the amount of data being stored globally is continuing to grow exponentially, storing high volumes of data is no longer an impediment to achieving ROI through data strategy. Instead, organizations must effectively manage and optimize data from on-premises servers to the public cloud and edge networks.
Many organizations have turned to point solutions for data management and analytics to address this. While such tools may be effective in quickly solving specific data processes, giving off the illusion of faster time to value, they actually create more complexity and increase expenditures, including the upfront cost of onboarding the tools as well as of integrating them into the ecosystem. 78 percent of data leaders agree that they drive up the cost of data.
The implementation of modern data architecture technologies — data lakehouses, data mesh, and data fabric — should produce concrete ROI to ensure continued support from leadership. Those returns are often measured in business value which may be unrealized without a CDO champion.
- Take accountability for data successes — and failures
Finance has a CFO, marketing has a CMO. These functions are critical to operations and as such they have a member of the C-Suite who is ultimately accountable for the successes and failures of their department.
With data becoming an increasingly important business asset, the CDO can offer that level of accountability that every major function requires. They also ensure their successes are visible to the C-suite — without them, the rest of the C-suite may not understand the value the data team is bringing to the business.
- Improve competitiveness in the AI age
Research from Harvard Business Review reveals that 41 percent of surveyed CDOs define their success by achieving business objectives and driving business value through their data strategy. In this regard, their value cannot be understated. CDOs provide thought leadership that can increase agility and improve competitiveness, for example, by predicting business performance and customer behavior and embedding those insights as new product features and service offerings.
Looking toward a data-driven future
In today’s data-driven world, data leaders should have a place in the C-Suite. The role is essential to drive an organization’s data strategy, to promote a data-driven culture across the enterprise, and to implement modern data architectures and essential AI technologies which will unlock the full value of data whether it resides on premise or in the cloud.
Image Credit: Josepalbert13 / Dreamstime.com
Shayde Christian is VP Data Analytics at Cloudera.
