The explosion of data has led to a significant increase in investment in big data projects. Many companies are looking at the data they collect in a completely new way. Data is now recognised as an asset that can be leveraged to access new sources of business value.
According to analysis by MHR, more than three quarters (76%) of UK companies implemented at least one Big Data project during 2017. This figure will keep growing year after year as companies recognise the central role data can play in their success.
The most innovative companies are already investing in establishing a data-centric culture across the whole organisation. This means the role of the Chief Data Officer (CDO) is becoming increasingly important. Without a clear strategic vision of what to do with hundreds of terabytes of data, companies can quickly get bogged down in the details.
The value of a Chief Data Officer
The Chief Data Officer is the voice of data within a company and represents data as a strategic asset. A company’s data is highly valuable: you could argue that there is a very real exchange rate between data and profit, whether the data is used intelligently to increase efficiency, boost sales or create entirely new business opportunities. A deeper insight into customer relationships, decisions and the market has enormous value. The ultimate goal is to empower the organisation by delivering that information in an actionable way, through technology, workflow, visibility and compliance.
The specific applications of data will vary widely from one company to another, but it is clear that, to get ahead in today’s markets, it is an asset that must be used intelligently.
Origins of the CDO
The CDO role is relatively new. In the past, data was a secondary priority for most companies, and responsibility was usually relegated to data architects and analysts. In most cases, these early data proponents did not earn a seat at the executive table.
Eventually, a variety of use cases provided unequivocal evidence of the power of big data, and executives soon recognised its value as a corporate asset. The first corporate CDOs emerged as a direct consequence of the 2008-2009 financial crisis. The initial driver was a response to increasing regulatory and compliance reporting demands, particularly in banking and financial services, where new requirements called for greater scrutiny of data quality, accuracy, transparency and privacy.
Financial services CDOs were given the mandate to manage regulators and ensure data quality and transparency. Given this situation, the first generation of CDOs played mainly on the defensive. However, this quickly began to change as companies learned to leverage their data to improve efficiency and identify new business opportunities. Rather than limiting themselves to compliance, CDOs began making significant contributions to profit margins.
CDOs and the information age
The ongoing data explosion shows no signs of slowing down. The CDO has become a key player in most large companies. Developing and managing a comprehensive data strategy is essential to keep pace with change in modern business. Such strategies require strong leadership and direction from a CDO. However, as business processes continue to grow more complex, the CDO’s role and responsibilities will change and evolve.
In the age of AI, that leadership rests on data governance: quality, semantic layer and security. At Digital Fox Data we help build that foundation with our Business Intelligence consultancy. If you want to put your data in order, let’s talk.