Data is now widely cited as a company’s most valuable asset – something 77% of the 1,000 IT directors we surveyed confirmed – but it’s not the be-all and end-all.
It’s great that businesses recognise the potential of data and the role it can play to improve business performance. The trouble is, they’re not investing enough in deriving true value from it. Many don’t have a robust data strategy in place or the right people or skills to interrogate and glean actionable insights from the data. In our same survey, 72% recognise the negative financial impact that an inability to generate insights through the analysis of data can have.
Put simply, having lots of data is great, but without human input and creativity to build data-driven strategies or turn that data into critical business outcomes, it’s the equivalent of owning a supercar, but without having its key or a driving licence. It looks nice, but you can’t use it.
Noted author and data champion Caroline Carruthers puts it a different way: “Currently, most businesses are ‘data hoarders’, wanting to get their hands on as much data as possible. However, without people with the skills to understand how to process and use that data, the questions needed to improve data use are not being asked within the organisation. The data is available, but those without experience in data handling don’t know what they don’t know, so they can’t use it to its full value.”
CDOs to the rescue
In light of the above, Chief Data Officers (CDOs) are rapidly emerging as one of the most valuable business leaders.
As Forbes reports, in 2012, just 12% of Fortune 1000 companies had a CDO, but as of last year, the figure has risen to 67.9%. KPMG believes that businesses with a CDO are twice as likely to have a clear digital strategy. What’s more, according to Forrester, a CDO is present in 89% of companies that have systematically harnessed data to improve their differentiation in the market.
The CDO takes responsibility for leading the strategic direction of the company, understanding and leveraging data to support the strategy, and then playing an increasingly important role in shaping and influencing the plan.
This makes the CDO key in driving the business forward across the board, including revenue growth, innovation and operational efficiencies. As such, CDOs demonstrate a unique set of skills that allow them to understand every aspect of the organisation, from sales and finance to marketing and HR.
It is this breadth of knowledge that means they are responsible for creating a strategy and infrastructure that allows every department to access the data insights they need in a secure, compliant and timely manner.
CDOs are now central to business success, possessing business skills many traditional executives do not have:
- The ability to look at core data, and see how it can be used logically to improve business practices
- Selling the idea of change to stakeholders throughout the organisation (and it being received positively)
- Seeing through the implementation of transformation to a data-driven business
As we’ve established, many businesses are still a long way off using their data to its full potential.
In those organisations without a CDO, it’s currently the CEO and/or CIO leading the charge on data insights. Deloitte found that the CEO is the lead champion of analytics in 29% of companies. But the same report identified that 67% of business executives felt they lack the skills needed to use data and said they were not comfortable accessing or using data from the available tools and resources within their organisation.
To play an even more pivotal role in business, CDOs can make data insights inclusive, so all significant decision makers understand the value of data-driven strategies and are on-board.
Effective CDOs act as the interpreter between data and how it impacts and can improve business processes across every aspect of an organisation. They demystify data for their colleagues and facilitate its use at a functional level for example by becoming a conduit between the digital front office and the app development team to help underlie the criticality and importance of data use and management.
The CEOs of the future
Few roles, if any, cover such a wide variety of responsibilities as the CDO. The CDOs ability to intrinsically understand their business and plan for its future will place these individuals as natural candidates for future CEOs. Here are our five reasons why:
- They are responsible for the management and use of the company’s most valuable asset: data
- The benefits of their strategy positively impact every function within the business
- The impact of effective data analytics is realised on the top line (revenue) and bottom line (cost reduction and efficiency)
- The CDO needs to have a working knowledge of every function within the business
- They are true leaders with the ability to align the organisation to their vision of data-driven business.
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