Physicist Albert Einstein famously said that ‘information is not knowledge.’ Though the Nobel laureate clearly wasn’t referencing the use of data as a corporate decision-making tool, his point could easily apply. Information alone isn’t enough. To provide value, data must be cleaned, analyzed and crunched before it can reveal pertinent insights.
In the age of the customer, companies succeed or fail based on their ability to keep consumers happy and engaged. Understanding their preferences, why they select one product over another and whether they want to purchase online or in-store are all critical insights. To get a better handle on customer behaviour, organizations need to transform their data into business-impactful information.
Getting from A to B is not without its challenges. A significant example is the disconnect between the IT department and the business leaders. Generating reports from existing data is taking many companies weeks or months — far too long in a competitive business climate, according to Forrester Research.
Leaders in a digital landscape
As data’s role has grown in prominence in recent years, organizations have introduced new leadership to help them become more agile and nimble in leveraging data for business decisions. A Forrester survey of 3,000 businesses (small, medium-sized and enterprises) reveals that almost 70 per cent either have a CDO in place today or are planning to hire one soon.
Gartner believes that as early as 2019, 90 per cent of large organizations will have a Chief Data Officer, underscoring the idea that data is one of the most valuable business assets for a successful company.
Though data leaders have been around for about 15 years, mostly in large financial and healthcare organizations, the role has changed significantly. Historically, these data leaders were often brought into the organization over concerns about a data breach. As a result, they spent the bulk of their time on data management and governance.
Going forward, Forrester predicts more of their time will be spent on data discovery, analytics, evaluations and embedding those insights into processes or delivering them to decision-makers. In other words, business goals are driving the role of the Chief Data Officer.
Along with organizational evolution, CDOs have also seen their jobs expand strategically, reports Silicon Angle.
The stats on emerging roles and responsibilities
Another Gartner survey of almost 300 CDOs, Chief Analytics Offers and other high-level global leaders in data and analytics found that more than a third of those surveyed have some level of profit-and-loss responsibility. This means that their activities are tied to specific business results.
More than 70 per cent said they’re consulted as thought leaders on emerging digital models, 60 per cent assess external opportunities and threats, and 77 per cent are developing new tactics to compete with data. More than a third say revenue growth is one of their top three measures of success.
Budgets are also on the rise. Survey respondents reported an average CDO office budget of $8 million, representing a 23 per cent increase from the average of $6.5 million reported in 2016. 15 per cent of respondents report budgets of more than $20 million, contrasting with seven per cent in 2016.
“The steady maturation of the office of the CDO underlines the acceptance and broader understanding of the role and recognizes the impact and value CDOs worldwide are providing,” said Michael Moran, Research Director at Gartner. “The addition of new talent for increasing responsibilities, growing budgets and increasing positive engagement across the C-suite illustrate how central the role of CDO is becoming to more and more organizations.”
The cost of poorly managed data
Canadian enterprises debating whether they can afford to shell out for a dedicated data lead should consider the cost of not doing so. Gartner estimates that poor data quality is hitting organizations where it hurts, costing them an average $15 million a year.
In addition, Futurum Research says that CDOs add value to the business, applying meaning and strategy to data in five important ways:
- They make companies more competitive
- They break down data silos
- They bring meaning to data
- They keep data clean
- They support the C-suite team
In a time of unprecedented access to a seemingly unlimited amount of data, the CDO may soon become an indispensable part of many organizations. Until then, it may also be key to staying ahead of your competition.