In the recent times, Organizations have started placing an increased focus on data management, data protection and analytical capability. This is where the Chief Data Officer, i.e. the CDO comes into being. The key enabler of the role of the CDO is the exponential explosion of information and data. The ability to build the right infrastructure to capture and extract quality data, and then to drive actionable-insight is the rationale behind appointing a competent CDO. Going a step further, the CDO will be most effective when the right platform(s) exist that allow business users to perform their own analysis in real-time. This is also called the ‘democratization of data.’
The top five reasons to pay attention to data—and hence create the Office of the CDO—are:
• Unclean data is a cause of unnecessary staff activities causing wastage of time and effort;
• I.T. projects are often derailed by unclean data. As per a paper in the H.B.R., I.T. projects spent an average of 12% of their budgets on data quality issues1;
• Superior data quality leads to faster analytics. Practitioners of analytics projects can spend up to 80% of their time preparing and messaging data prior to running the models;
• Clean data leads to better compliance. Having a systematic approach to data management can reduce risk while also improving operational efficiency;
• Good data practices save money. Departments, functions and divisions are buying data from varied sources. Centralizing data purchases can bring considerable cost savings by reducing and rationalizing data needs.
Data quality is the key driver for analytics and the sure shot way of ensuring clean data is to ‘clean’ it at its source. Data cleansing downstream is expensive, tedious, and not scalable. However, creating an environment and culture of data quality requires a fundamental shift in the behaviors and the underlying I.T. tools.
The Chief Data Officer or CDO is becoming a key part of the C-suite in corporations. Appointing a CDO will ensure that the organization embraces changes in incentives and processes to bring about a culture of data ‘sensitivity’. The CDO is infact a role that drives collaboration within the organization, most of which is to improve inter-operatability between the business units and I.T.
B2C companies have been early adopters of the role of the CDO because of the overwhelming amount of information. The CDO role is now a de facto CxO role in most Fortune 1000 companies. Some companies have ensconced the CDO within the I.T. department with varying results. In general the I.T. departments, spearheaded by CIO may not be best placed to manage the culture of data. The CIOs remit is already challenged to meet internal customer needs. Adding another responsibility to this will not prove efficient.
As an example, a B2C company wants to ensure that its data is available in remote locations. But they have significant legacy infrastructure and I.T. issues—some of which are distributed across warehouses, different I.T. systems, different tools and databases, etc. In such a scenario, a CDO can create a seamless data-access system by unifying data and creating the right rules and governance. This can result in a more controlled environment for distribution of data.