The chief data officer: The CIO’s newest ally
As organizations shift to data-driven strategies, the CDO role is rising. But to succeed as an entity, the CIO and CDO must work in concert — with clear delineations in responsibilities.
Jim Tyo, chief data officer at Nationwide Insurance, has a crystal-clear vision of his role: to help the company optimize the use of its data.
Tyo has 80 associates in the company’s Enterprise Data Office to help achieve that mission, with another 40 contactors rounding out the data team.
Yet Tyo is equally clear that his office needs to be well integrated with IT to succeed.
“We’re blurring the lines between IT, data and business units, and that makes the role of the CIO and the structure we have more critical, to make sure the data tools and the services and the strategy are available to drive business outcomes,” Tyo says.
Cooperation, Tyo says, is critical to maximizing the value of the company’s data program. At the same time, so is well-defined delineations between his job as CDO, the enterprise CIO and the business unit CIOs. And those boundaries have also been critical to establishing a productive partnership between data and IT.
“You don’t want to compete on trying to do the same things,” he says. “So at Nationwide it was important to delineate these roles and responsibilities, because knowing your pieces and how they fit with your partner’s pieces is critical for how to work well and collaborate and work across the teams. There’s probably not anything more important for success.”
The chief data officer is one of the newest entries into the C-suite, with the number of CDOs swiftly growing in the past decade. Research firm Gartner counted just 15 CDOs working in large organizations in 2010, 400 in 2014 and then 4,000 in 2017.
That means few organizations are as mature as Nationwide is in their data use and the CDO role, according to executive experts, researchers and analysts.
The CDO position is not always clearly defined within individual organizations. And the CDO’s objectives, responsibilities and purview are often poorly articulated, leaving confusion on what should fall to the data officer and his or her staff (if there is any) and what should remain with the CIO and IT (where many data and analytics projects have long been housed).
But the CDO role is evolving alongside the actual number of positions. Organizations are increasingly taking the same approach as Nationwide, creating specific mission statements for their chief data officer, hiring staff and providing funding to drive the data agenda into the future.
This evolution finds the CDO at the center of a shift from overseeing data and analytics projects to “driving a product-centric organization,” according to Gartner. Following is an examination of the rise of the CDO role, and how organizations must carve out distinct, collaborative responsibilities in a newly data-focused C-suite.
The CDO: A key role for data-driven organizations
The CDO position is rising in prominence thanks to a trend that sees organizations evolving from digital to data-driven business strategies. By 2022, 90 percent of corporate strategies “will explicitly mention information as a critical enterprise asset, and analytics as an essential competency,” Gartner predicts in its May 2019 report 10 Ways CDOs Can Succeed in Forging a Data-Driven Organization.
To succeed, organizations must clarify and promote the CDO’s role as well as create and promote a culture that embraces the data-driven mindset and disciplines, Gartner advises.
“What we’re seeing now is a new type of data leader — the chief data officer 4.0, a leader focused on creating data products for the organization,” says Mario Faria, vice president and program director with Gartner’s data-focused Research Board organization.
Most CDOs aren’t yet fully strategic. Many remain focused on tactical tasks such as implementing analytics services and delivering dashboards rather than higher-level work such as creating a data and analytics center of excellence, coaching others to be data-driven and enabling organizational data fluency, Gartner reports.
“CDOs should strive to balance strategic and tactical activities. Being driven by business goals is important, but most CDOs’ operating models skew toward being a service center rather than cultivating data-driven competencies across the enterprise,” according to Gartner’s May report.
As a veteran of several executive data positions, including the CDO role, Althea Davis has experienced the evolution firsthand. Davis, now global data governance manager for Heineken, the Dutch brewing company, says organizations that had once aimed to simply wrangle data are now seeking leaders who can use data to add value.
CDOs thus need to be evangelists, “to get people to see the vision, to open up their eyes, let them have lightbulb moments,” she says, adding that CDOs must also be able to support their statements with business cases.
“We have to get people data-literate without them feeling that they can’t contribute. We have to get people motivated and take action on something that’s not very familiar,” she adds.
Certainly, though, not all organizations are at this point, Davis and others say; in fact, many don’t have data executives while others still house data activities within IT. And many organizations that do have CDOs don’t have clear expectations for the role, as evidenced by the variation in CDO’s authority, responsibilities and influence from one enterprise to the next.
That variation is a function of organizational data maturity, individual CDO expertise, and how other executives view the role of data and the CDO, experts add.
“For many organizations, the CDO role is still new, untested and somewhat amorphous. In these circumstances, the scope, priorities and responsibilities of the CDO’s role can quickly become inflated,” Gartner analysts write in the research firm’s May report.
Business management consultancy NewVantage Partners also found in its Big Data and AI Executive Survey 2019 that the CDO “role remains ill-defined with the consequence that CDOs may be ill-equipped to address the challenges.”
Experts say such conclusions aren’t surprising, considering that organizations have been creating data for ages yet have had no single steward for it until the advent of the CDO role about two decades ago. Still, many organizations are shaping the CDO role on the fly and are staffing up data offices all while lacking visibility into the data they have, let alone having a vision on how to optimize that data’s value.
CDOs aren’t the only ones feeling uncertainly. Some CIOs are likewise uncertain of where this new role leaves them. As the Gartner analysts wrote in the May report, “some CIOs see this new role as a direct affront, if not a threat to their dominion, and a ‘watering down’ of their responsibilities and influence.”
CIOs don’t need to worry, executive experts say, as the CDO-CIO relationship must be symbiotic, not adversarial, if either one wants to deliver successful data strategies to their enterprise.
“There’s no way a CDO can succeed without the cooperation of the CIO,” says Peter Aiken, an associate professor of information systems at Virginia Commonwealth University, and associate director of the MIT International Society of Chief Data Officers and co-author of The Case for the Chief Data Officer: Recasting the C-Suite to Leverage Your Most Valuable Asset.
Similarly, Aiken says CIOs — with their expertise in technology, but not data and analytics — don’t have the skills or time to oversee a successful data strategy.
And with data becoming a critical component of organizational success, the need for technology that can support and fuel the data mission is only increasing, and that means the CIO and the CDO must work in tandem for any enterprise that wants to remain relevant in the digital era.
“No one can effectively manage IT and manage data, so we need someone exclusively focused on data and someone exclusively focused on technology. They’re both moving at alarmingly fast rates, and you have to have focus and control and authority and accountability in both areas,” says Todd R. Harbour, associate director of the MIT-based International Society of Chief Data Officers, former CDO for New York State and co-author of Data Strategy and the Enterprise Data Executive: Ensuring that Business and IT are in Synch in the Post-Big Data Era.
Harbour offers this insight into the two roles: “The CDOs are setting the policies about the data, where it can live and how it should be used. The CIOs have to make sure that the data can go wherever it needs to go and that the IT is configured toward those policies. And CISOs are working with them to make sure it’s all secure.”
Aiken concurs. “The CDO should describe what should happen with the data, and the CIO is expert in making it happen,” he says.
Defining roles, developing strategies
Best practices and organizational standards around the CDO role are emerging. Organizations that embrace those best practices and evolve and mature the data office first will be best positioned for competitive advantages in the future, according to leadership authorities, consultants and researchers.
“The chief data officer role has become a very strategic role for many different companies in many industries, because data is having a dramatic impact on business,” says Martha Heller, founder and president of Heller Search Associates, a recruiting firm specializing in CIO and IT leadership roles across all industries.
The most mature and most data-fluent organizations are now using data to determine new business opportunities and new products to develop as well as how to be more efficient, more productive and more competitive, Heller and others say.
Challenges, of course, remain for organizations aspiring to that vision. Organizations must break down barriers that stubbornly remain between IT, the data function and the business units, says Eric T. Bradlow, vice dean of analytics at The Wharton School at the University of Pennsylvania.
“The key is that they’re not siloed, because firms struggle to use data for decision-making when those three things aren’t integrated,” he says, noting that while each area requires very different skill sets they need to collaborate and cooperate rather than exhibit (deliberately or unintentionally) any territorial behaviors.
That collaboration can become more complicated and challenging in large companies that have added not just a CDO but also a chief digital officer, a chief analytics officer, a chief data scientist and other such functions to their executive ranks.
Additionally, many organizations struggle to find not just the right talent but any talent, as data experts and data-fluent IT pros are in short supply and high demand, according to Bradlow, Heller and others.
Similarly, many organizations struggle to develop the data-related skills needed throughout their units, experts say, noting that it’s a particularly tough task for small and midsize companies that aren’t large enough to support a CDO position or data function and therefore must house those responsibilities within other existing areas such as IT or operations.
Either way, a key element for success in the years ahead rests with having a top-level organizational vision for data and data leadership, along with clearly articulated responsibilities and objectives for every executive on how they’ll interact with the emerging data operations envisioned by the leadership.