Chief data officers (CDOs) have a big job: They are responsible for determining how to utilize information as a business asset. Gartner found that through 2019, 90% of large organizations will have hired a CDO, but only 50% will be considered a success.
Ahead of Gartner’s Data & Analytics Summit 2017, Doug Laney, vice president and distinguished analyst at Gartner, discussed how CDOs can be successful in the midst of developing best practices, high expectations, and demands by their organizations.
Q: How do CDOs gain the authority they need to succeed in their role?
A: The role of the CDO is relatively new and evolving quickly. CDOs are the head custodians and chief stewards of an organization’s information assets. Organizations have a growing stake in aggregating information and using it to make better decisions. CDOs are tasked with using information to automate business processes, understand customers, develop better relationships with partners, and ultimately sell more products and services faster.
By 2020, 50% of leading organizations will have a CDO with similar levels of strategy influence and authority as their CIO.
By 2020, 50% of leading organizations will have a CDO with similar levels of strategy influence and authority as their CIO. CDOs can establish a leadership role by aligning their priorities with those of their organization. To a great extent, the role is about change management. CDOs first need to define their role and manage expectations by considering available resources.
CDOs will gain authority when they successfully verify that their organization can own and control its data, and that it has probably future economic benefits. Gartner recommends that CDOs apply the principles for identifying traditional assets (e.g., physical and financial assets) to data in order to lead their organizations in recognizing data as a legitimate, valuable asset.
Q: How do CDOs obtain the budget and resources they need to be successful?
A: It has proved difficult for CDOs to get anything other than moderate budgets and limited resources when they report into an existing business unit like IT. Moreover, with only a handful of personnel in the Office of the CDO, the group must operate virtually, tagging onto, and inserting themselves into, existing projects and initiatives throughout the organization. This, of course, is suboptimal.
We recommend that organizations serious about improving the realized value of their information assets bifurcate their IT department into separate “I” and “T” departments, the former led by a CDO. Budgets and resources can rise to sufficient levels when information is treated as a real enterprise asset, and the CDO is an actual chief who assumes responsibility for all information management (and sometimes analytics, too).
80% of successful CDOs will have value creation or revenue generation as their Number 1 priority through 2021.
Q: Why do CDOs need to monetize their information assets?
A: Monetizing information is part of a growing demand for infonomics, or giving economic significance to information. In fact, we estimate that 80% of successful CDOs will have value creation or revenue generation as their Number 1 priority through 2021, up from less than 50% in 2016. Infonomics provides the framework businesses need to monetize, manage, and measure information as a real asset, thereby improving its benefits to the organization.
Monetizing information takes many forms, such as enabling improved business performance and relationships, and enhanced expense and risk management. It can also take the form of bartering with information in return for goods and services, creating supplemental revenue streams, and digitizing existing products and services. Ultimately, monetizing information should involve innovating with it in transformative ways to gain a competitive advantage.