Data no longer represent only statistics in enterprises; they have become a strategic source of ideas and information for businesses in all areas, such as risk management, sales, marketing, product development, and management control, among others.
The challenge, however, is to manage this data capital proactively and effectively at the organizational level.
The answer for many companies is to appoint a Chief Data Officers (CDO) who can lead this strategic task in a seamless manner and ensure access to vital data.
What is Chief Data Officer
An in-depth article in CIO magazine states that a CDO is a leader who creates business value from data. His or her role is to oversee the variety of data-related functions to ensure that your organization is making the most of what could be your most asset.
He or she is responsible for the use and governance of data across the organization. They may include data management, ensuring data quality and creating a data strategy. They may also be responsible for data analytics and business intelligence, i.e., the process of extracting valuable information from data.
While it is true that the roles may overlap with CIOs and CTOs, the boundaries should be clear. CDOs are responsible for areas such as data quality, data governance, master data management, information strategy, data science and business analytics.
A growing market
A report by the consulting firm PwC points to the year 2021 states that data is increasingly being spoken about. Looking at annual reports from 1,000 companies around the world, it is clear that data – including terms such as AI, machine learning and analytics – is more prominent today than it was five years ago. It also indicates that data is increasingly of concern not only to companies, but also to their boards of directors and investors.
The study shows that a typical company refers to data 48 times in its annual report and that the appointment of CDOs in companies has accelerated in recent years, although still only 21% of the 2500 publicly traded companies worldwide had CDOs by that time. And almost half of them were appointed since 2019, primarily in the insurance, banking, media and entertainment, retail and technology segments.
Taking a broader view of what that role means, a New Vantage Partners survey in 2022 found that 74% of companies have some sort of data and artificial intelligence leader. Though it posits that there is still a lot of confusion and disagreement about the mandate and importance of the position.
According to PWC, there are 530 CDOs in the 2500 largest publicly traded companies. The United States, which tops the list with 272, France has 37 and Australia, which ranks sixth, has only 12. Sweden and Spain have four each.
Evolution
A Deloitte report states that the role of the Chief Data Officer was born in countries with advanced regulations as a way to ensure data quality before the various regulators, today this role has advanced greatly becoming a key articulator to ensure not only the quality and integrity of the data, but also that they produce value to the various executive levels of financial institutions.
And he points out that there is currently an increasingly strong convergence between the figures of the Chief Data Officer and the Chief Analytics Officer, where there is a greater focus of the CDO in the generation of value. Deloitte calls this role CDO 3.0.
In an increasingly interconnected world with more data, information management is becoming more and more critical, so in the near future, says the consulting firm, the CDO will be transformed into a role more similar to that of a Chief Strategy Officer.
It is also important to keep in mind that some companies have not appointed a CDO directly, but have ceded part of their function to other executives, such as the Chief Digital Officer or the CIO. In addition, many companies have different data owners within their organizations.
An important part of a CDO’s role is to work on improving processes involving large volumes of data and optimizing this management. In this line, working on automation, standardization and validation to ensure data quality is central. A data management platform such as Conciliac EDM, which allows to automate the management of data ingestion, transformation, validation and reporting, among other processes involving data, is a fundamental tool to reinforce a true data-driven strategy.
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