The emergence of data as the new currency in the digital economy has turned the executive in charge of data, the chief data officer, from a blocker and tackler into a franchise quarterback. The CDO now sets data in motion to deliver new products and services through different channels and partners.
“While Forrester’s research shows that the CDO role initially emerged as a data czar playing defense in response to real and perceived threats, discussions at MIT’s event indicate that today’s data leaders have gone on the offense to purse strategies that drive business transformation and growth,” said analysts Jennifer Belissent and Elizabeth Cullen in a Forrester research note, referring to the 11th Annual MIT Chief Data Officer and Information Quality Symposium, which took place in July.
In a sign of the CDO’s elevated status, a Forrester survey found that 40 percent of data and analytics decision makers report that their company’s CDO works directly for the CEO. They’re working together to turn data into cash. Forrester says 64 percent of decision makers at firms with CDOs report commercializing data, compared with 33 percent of those without a CDO.
CDOs score all kinds of business outcomes with data. For instance, CDOs at insurance companies mine scientific literature to guide underwriting strategies and mitigate risk, according to the Asbestos Network and Mesothelioma Guide. In its report, Forrester says the CDO at AIG uses image recognition and video analytics to predict the odds of an accident happening at a construction site.
All tallied, companies with a CDO are more likely to prioritize the acceleration of digital business than companies without one, Forrester says.
The CDO’s value in the digital economy has risen to the level of an elite quarterback in the NFL. (Well, not exactly, but the metaphor works.) Companies are trying their best to get one on their payroll. Recruiting and retaining top data and analytics talent has become a priority. Forrester says one company is contemplating asking candidates for a three-year commitment in exchange for providing venture funding afterward.
For their part, CDOs feel the pressure to perform amid sky-high expectations. “I’m expected to create a unicorn by the end of this,” a CDO told Forrester. Other CDOs who had managed data in the past might not be suited to lead, Forrester warns.
Either way, a CDO will need good teammates to succeed. For instance, cross-departmental colleagues can advise a CDO on the best way to present data insights to different employees across an organization, such as mobile account alerts for sales managers and Excel for an operations analyst.
A CDO also might have to bring in storytellers, philosophers, ethicists, linguists and artists to help create a narrative from the numbers. Forrester says the CDO at Sanofi recruited a journalist from the University of California, Berkeley, and an anthropologist from The Metropolitan Museum of Art to do exactly this.
Digital transformation has become the most important game in business, and companies are beginning to understand that data and the CDO hold the keys to winning.
“Gone are the days when the CDO role focused solely on data management,” Belissent and Cullen said. “Data hoarders will not last; those who innovate with data will thrive.”
Tom Kaneshige writes the Zero One blog covering digital transformation, AI, marketing tech and the Internet of Things for line-of-business executives. He is based in Silicon Valley. You can reach him at [email protected].