Chief data officers (CDOs) is relatively a new addition in the C-suite. While the position is created because most organizations have a data-driven culture today, in reality it is seen that most of the CDOs, despite some of their best efforts – they are yet to deliver superior organizational performance. This is according to a recent global survey by Gartner, which emphasizes the fact that CDOs and data analytics teams need higher strategic focus.
“CDOs generally focus upon the right things, but they do not have the right mix of activities,” said Debra Logan, distinguished research vice president at Gartner. The survey found that CDO’s rank creation of data-driven culture as the No.1 critical factor to the data and analytics team. There is however a contradiction as other key factors like data integration and data skills training as well as strategic activities such as architecting a data and analytics platform are ranked low.
Gartner also found, CDOs rank implementation of a DA strategy as number 3. But creating a data literacy program, the most-critical success factor gets a ranking of 12th. This was despite the fact that, in the same survey, ‘poor data literacy’ was rated the No. 1 roadblock to creating a data-driven culture and realizing its business benefits.
“The low ranking of strategic activities can be explained because the majority of organizations are at maturity level 3 or higher for EIM and business intelligence and analytics,” said Logan. “While the survey shows that information governance is important, especially master data management (MDM), CDOs should never lose sight of the business outcomes they are trying to achieve. Focusing exclusively on governance, even MDM, is not enough to succeed as a CDO.”
Here are some interesting finding of the survey:
Emerging Technologies Are Important to DA Strategy Success
A majority of CDO respondents rated machine learning (ML) and artificial intelligence (AI) as critical at 76% and 67%, respectively. Sixty-five percent of respondents were using or piloting ML, while 53% were using or piloting AI. Less than 20% of CDOs surveyed were using or piloting smart contracts (18%) or blockchain (16%).
“CDOs are embracing emerging technologies to enable and drive data program success,” said Logan. “The survey respondents reporting superior overall organizational performance compared to competitors were more likely to use ML to drive revenue growth. They are also likely to attract and retain top talent and translate customer or business needs into high-value products or services.”
Only 8% of CDOs Are Directly Measuring Financial Value of data
The report found, only 8% of CDOs were measuring the financial value of data assets. Forty-five percent of CDOs reported they produce some data quality metrics. These include, accuracy, completeness, scale and usage. While 29% said they measure the impact of key information and data assets on business processes, such as KPIs.
“The measurement of information value clearly leans toward data quality. There is room for improvement as nearly a fifth of CDOs surveyed have no objective measurement of information assets,” said Logan. “Organizations need to realize that those who measure either the financial value of key information and data assets or measure the impact of these on business processes are nearly twice as likely to report superior performance in DA team effectiveness.”
The survey also found that the majority of CDOs generated value from information assets to improve internal processes (60%) and increase the value of products and services (57%), with a focus on efficiency. Half of CDOs reported a focus on enhancing new offerings by innovating with information. Other means to realize value from information assets also lagged. Nineteen percent of CDO respondents were selling or licensing information via data brokers or online marketplaces. Only 17% were selling or licensing to others for cash.
Overall, respondents using information and data assets to generate indirect economic benefits were more likely to report superior organizational performance. This is especially true when engaged in improving or developing new offerings. They are also looking at increasing the value of their products/services.
The road ahead
Logan added that a successful CDO need to emphasize on the following:
- Provide measurable business outcomes. For example, how DA can reduce customer churn as well as deliver specific outcomes such as data quality.
- Balance tactical and strategic initiatives especially when it comes to technology implementation. In other words, CDO’s emphasis is not on implementation, which CDOs should leave to the CIO).
- Experiment with digital emerging technologies and looking for the best use cases to develop real cases.