By 2025, global data creation is expected to reach 175 zettabytes and the global big data and analytics market is on pace to reach $135.71 billion. Data will fuel global economic development throughout the remainder of the 21st century. Organizations worldwide are scrambling to reengineer their data strategy to capture increasing amounts of data, translate it into actionable insights and ultimately empower more intelligent business decisions.
Several industries, including technology, banking and consumer goods, have already integrated transformative data initiatives into their strategic approach. But the energy and natural resource industries have only just started to fully appreciate the true value of data moving forward.
The single most effective step companies can take to re-engineer and catalyze their data strategy is to hire an effective Chief Data Officer (CDO).
CDO Role Defined
The CDO is one of the newest potential additions to an organization’s senior leadership team. At its core, the CDO role is about determining how data is used and governed throughout the organization.
According to research from NewVantage Partners, the CDO role comprises seven critical job types, each of which is so distinct that it may require more than one person to do them all well. Organizations must ask themselves, “what do we need the CDO role to be based on who we are, where we are and the industry or market context in which we currently operate?” A one-size-fits-all approach won’t work.
The seven job types under the CDO umbrella include; data and analytics officer, data entrepreneur, data developer, data defender, data architect, data governer and finally data ethicist. Depending on the organization’s needs and the market context, the CDO’s role may differ from one business to the next. but ultimately all CDOs are expected to derive the maximum business value from the data available to the enterprise.
What makes a great CDO?
The prevalence of CDO roles has grown globally in many sectors. Nearly two thirds (65%) of data-intensive organizations surveyed in 2021 confirmed they had a CDO in place, up 53% from 2012 when the first generation of CDOs was hired.
It’s clear that organizations are seeing the value in hiring a CDO — but what makes a CDO effective? What characteristics must a CDO possess to successfully govern an organization’s data while also contributing measurable value to the enterprise in the face of the challenges previously listed? To aid companies in the CDO selection process, we’ve identified four key characteristics that recruiters should focus on when assessing potential candidates. Of course, organizations should consider their unique needs, context and circumstances when choosing a CDO beyond the following four characteristics.
Is focused on business value - A business value-focused CDO effectively communicates how an organization’s data strategy will achieve the business objectives and add value to all functional business units.
Balances enablement and control - A great CDO must strike a balance between using and controlling data. In their 2021 Big Data and AI Executive Survey, NewVantage Partners defined this CDO dilemma as being defensively or offensively oriented. Defensively-minded CDOs focus predominantly on creating strict data governance policies that maintain regulatory compliance. Offensively-minded CDOs see data as a business asset that should be used to empower business benefits.
Views analytics and data as a value chain - Great CDOs view data and analytics as a decentralized value chain instead of a centralized, isolated silo.
Aims to build a data-driven, collaborative culture - Great CDOs must be able to disseminate a data-driven mindset across to the entire organization, with buy-in from all levels.
To remain competitive in the volatile global environment, and in the face of their unique trends and challenges, organizations will need to be prepared to undergo significant digital transformations to make good use of their data. To successfully undergo these transformations, effective CDOs will be crucial members of the C-suite moving forward.
Companies must set the CDO up for success. A CDO can wear many different hats. Depending on the organization’s needs, the role may differ. However, it’s crucial to enable the CDOs by: Providing them with a clear definition of their role, granting them executive status and reporting structures, allowing them to be autonomous and dynamic and providing reasonable timelines and expectations.
Furthermore, CDOs need to be business-value focused. While balancing data enablement and control, CDOs must ultimately view data as an asset. They need to understand how it can be effectively used to create value for the business and achieve strategic objectives while being able to communicate that value to their executive peers.
Finally, Data governance should be decentralized and embedded throughout the organization. Data is most effective when it is used by each functional unit of the business as an enterprise-wide asset. To effectively implement a decentralized data governance model, the CDO must be able to effectively disseminate a data-driven culture.
Co-Authored by Lance Mortlock (EY Canada Managing Partner, Energy & Author of Disaster Proof), Pradeep Karpur (EY Canada Data & Analytics Leader, Energy) & Karun Gautam (EY Canada, Senior Manager, Energy)