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8/8/2014
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5 Priorities For Chief Data Officers

IBM says 25% of Fortune 500 firms now employ CDOs, yet many don't know how to structure the role. Research reveals five imperatives.

Chief data officer (CDO) is on its way to becoming the next hot job, but according to IBM, many companies aren't quite sure what this new role is all about.

"About two-and-a-half years ago we saw the emergence of the chief data officer, but organizations are struggling to understand what CDOs do, where they put that role within the organization, and what these executives are responsible for," said Glenn Finch, global leader for technology and data, IBM Global Business Services (GBS).

About 25% of Fortune 500 companies now have CDOs in place, and more are being hired every day, according to Finch. To give companies a better sense of direction, IBM recently surveyed 37 CDOs from across healthcare, financial services, telecommunications, retail, and manufacturing organizations. This "on the ground" experience was combined with expert perspectives in an IBM study published Thursday that asserts that the addition of a CDO to an executive team supports greater focus and optimized use of data.

[Want more on the CDO role? Read Why The CDO May Steal The CIO's Lunch.]

IBM's research finds that CDOs are being tasked to drive innovation and optimize use of data in five ways:

  1. Leverage - finding ways to use existing data.
  2. Enrichment - augmenting data by combining internal and external sources.
  3. Monetization - finding new sources of revenue tied to data.
  4. Protection - ensuring data privacy and security.
  5. Upkeep - managing the health of data under governance.

"CEOs are saying, "I don't want you to just move and store data better, I want you to figure out how to create a new business model,'" said Finch. "Every CDO we spoke to had at least one monetization request."

IBM's take agrees with Gartner's view of the CDO role, although the latter associates enrichment and monetization more with media and Internet giant CDOs and protection and upkeep more with banks, insurance companies, drug giants, and telecommunications companies. The latter have often seen that governance, compliance, discovery, and privacy challenges aren't being adequately addressed, as they've had instances in which they couldn't respond to regulators or were stung in legal cases in which they couldn't produce information subject to legal discovery.

Source: IBM
Source: IBM

"These chief data officers make sure that the information is accessible, managed, and governed in an orderly way, and that requires policy decisions and decisions about what information has value," said Gartner analyst Debra Logan.

How can CDOs ensure their own relevance and success? Finch said the key is making sure that data projects are for the sake of business objectives, not for the sake of data. For example, too many companies take the approach of putting a big data lake in place just hoping somebody will find a use for it. There should be a clear business objective, such as reducing data warehousing costs by a targeted amount, comparing same-store sales to weather patterns to improve merchandising, or streaming real-time information into the lake and finding more fraudsters.

"You have to solve for something besides a technology, and even better to be driving a clear business outcome, whether that's cost reduction, growth, customer retention, or risk," Finch said.

The CDO is a business executive, not a technician, programmer, or data scientist, IBM's report concluded. While data scientists typically have backgrounds as mathematicians or statisticians, CDOs must understand their employer's industry and market and combine that with a technical understanding of data and its potential for wider use.

GE and Airbnb take very different approaches to measuring cloud computing's value. Their strategies, plus our exclusive survey, show that calculating cloud ROI is far from an exact science. Get the new Cloud ROI issue of InformationWeek.

Doug Henschen is Executive Editor of InformationWeek, where he covers the intersection of enterprise applications with information management, business intelligence, big data and analytics. He previously served as editor in chief of Intelligent Enterprise, editor in chief of ... View Full Bio

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Manny924
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Manny924,
User Rank: Strategist
8/13/2014 | 4:43:22 PM
CIO is a better title and focus imo
It may not be enough to manage only data. The systems that serve that data may need to be optimzed or replaced in order to improve data distribution and or work flow.

That in itself would be monetization since improvements to work flow improves productivity.

CDO is not a complete position. it has to do with more than the data, it's also about the systems and people that manage, generate or consume it. Data analized is called information. In my opinion, CIO may be a more appropriate title and focus. CDO seems like a reactionary response to address the world of bid data.

A CIO should focus on how work flow enables the highest level of productivity through implementing and tuning systems, from the collection of data to the distribution and consumption of that data.
Laurianne
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Laurianne,
User Rank: Author
8/11/2014 | 11:32:54 AM
Re: How should the CDO role be structured?
This graphic from IBM is interesting for the CEO POV. To me it seems when a company needs a chief data officer, the CIO and IT organization has missed an opportunity to prove to the CEO that IT can create new business revenue with data. if you have data wizards on the IT staff, and a CIO and CMO who view each other as partners, do you really need a CDO? Probably not.
SaneIT
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SaneIT,
User Rank: Ninja
8/11/2014 | 9:35:14 AM
Re: How should the CDO role be structured?
@Li Tan, that makes a lot of sense, CDO doesn't seem like a natural fit under your CIO but more as a parallel role.  Working with data doesn't automatically mean you need the tech savvy to be inside the IT infrastructure, it should be more focused on what can be done with the data not the nuts and bolts behind where the data lives.
Li Tan
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Li Tan,
User Rank: Ninja
8/9/2014 | 10:40:39 AM
Re: How should the CDO role be structured?
Personally I would prefer to let CDO report directly to CEO. My justification is that, CDO is a business oriented rather than technology oriented role. Its major responsibility is defining what's the business result we want to achieve by gathering, protecting and analyzing the big data generated. CDO need to have a clear sense about and be on the same page with CEO about the business needs. Then he/she can achieve this by deep diving into the data gold-mine.
D. Henschen
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D. Henschen,
User Rank: Author
8/8/2014 | 12:41:02 PM
Re: Acronym overload
Chief digital officer shows up more at digital agencies, media companies and in sales/marketing circles where monetization of data and digital innovation are the name of the game.
David F. Carr
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David F. Carr,
User Rank: Author
8/8/2014 | 12:19:12 PM
Acronym overload
I thought a CDO was a Chief Digital Officer. Too many chiefs and not enough Indians?
D. Henschen
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D. Henschen,
User Rank: Author
8/8/2014 | 10:35:24 AM
How should the CDO role be structured?
Here's IBM's take on the pros and cons of various CDO reporting schemes:

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