As organizations increasingly view data as a competitive asset, the role of the Chief Data Officer – CDO – is becoming far more formalized. Today’s CDO is viewed as the steward for “Data Ownership and Responsibility” across the enterprise, and organization’s as diverse as the City of Chicago, Yahoo!, and Citigroup all have CDOs. While there is some ambiguity in terms of the reporting relationship for CDOs across organizations – is it to the CEO or CIO – the need for the role and the challenges are fast becoming apparent as they provide both offensive- and defensive-line strategies.
We see four challenges every CDO must tackle head-on if they are to succeed:
As a CDO you can’t really assume responsibility for data within the organization if you don’t really know where it is or how to integrate it. But the fact of today’s organization is that data sits in multiple technical and business-driven silos. So marketing data sits in multiple brand and consumer databases, while the sales organization may look at retail store and regional sales data, and HR may have silos around employee hiring, benefits, performance, and retention. It’s not uncommon for consumer data to sit in 36 different brand marketing databases and a 360-degree view of an employee by HR may require referring to 10 different HR systems. The wave of M&A activity has only complicated the data integration challenge further. Wrangling or integrating data from multiple sources can take 80 percent of a data scientist’s time, and between 60 percent and 80 percent of the total cost of a data warehouse project may be spent on ETL (extract, transform, and load) software.
Simply put, the challenge around data integration is just not tenable – and really the primary reason for the creation of the CDO role.
Retailers, too, are fast realizing that data on consumer loyalty and relationships, products, and suppliers far exceeds the value of their physical stores. This was brought home to them when they realized that their largest competitor was Amazon which did not own stores. They’ve realized that Omni-channel is all about recognizing your consumer in real-time, offering them the right products, and providing store associates with the right data to close the deal.
This requires using data to run your business operationally versus just observing trends — a change in mindset that the CDO must lead!
The vast growth of open source technologies where developers download software and use it even though it may not have adequate security or may not be installed correctly has really escalated this problem. As Information Age reported last year when MongoDB an open-source software provider faced a huge security alert after almost 40,000 of its customer databases were found unsecured on the internet including a French telecoms database with 8 million customer phone numbers and addresses.
CDOs must ensure that every piece of technology used within the organization is truly safe and enterprise ready if they wish to keep their jobs!
As organizations realize the value of data as a competitive asset, the role of the CDO as the leader of the data-driven transformation will only grow. Ultimately, they must lead their teams at winning the “data game” by playing both offense and defense!
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