We first heard of Chief Data Officer (CDO) in the early 2000s. After a decade or so, till 2012, CDOs would still be a small minority, with little more than 10 percent of firms having a CDO in their organizations. In the following years, companies of all sized invested in massive data projects, and data leaders grew significantly in importance.
Despite the substantial growth in the last few years, the CDO role is now at the crossroads. Many recent studies indicate that CDO hiring has significantly slowed down in the last year. Businesses started feeling their stakes were too high to trust the CDOs with large responsibilities such as digital transformation. However, there are diverging views, and many believe that the CDO role will undergo a major transformation in the coming years. Gartner, for instance, predicts the rise of “CDO 4.0” as organizations extend their data and analytics investment to the next level.
The new avatar of the CDO, says the research firm, will focus on products and managing profit and loss instead of just being responsible for driving data and analytics projects. How are the long-term prospects of the CDOs changing now? Experts argue that the CDO role will be very complex to define. One thing is clear– data has evolved to be the core foundation of most organizations. Not a single business decision today is taken without the backing of solid insights driven by data. In the current competitive environments, organizations no more rely on intuition-based decision-making or the experience of the senior leadership alone. The vast availability of data and advanced analytics tools to unlock the potential of that data has persuaded organizations to embrace completely insight-driven approaches.
Subsequently, the role of CDOs evolved from being keepers of data security, compliance, and quality to one that empowers customer experiences and critical decision-making.
Today, organizations across industries have invested heavily in data and analytics projects. The CDO’s role will have to evolve further if it has to deliver constant RoI for organizations and continue to exist. In the initial days, data strategists typically focused on the defense aspects of the data and ensured compliance with regulations, data security, and quality. In the coming days, data & analytics leaders will likely focus on three distinctive responsibilities—as they attempt to survive and thrive.
1. Data leaders will monetize data: CDOs in the new data-driven economy will step up and take up the responsibility of monetizing the data and analytics projects the organizations have been building upon. This could be bringing out new services or products based on those data models or developing a new business opportunity. Many firms in the financial services sector are already doing it—some credit bureaus, for instance. Global automakers like General Motors and Hyundai are also leading the way by showing how connected vehicle data can be used to spin out new analytics products for the market.
2. Chief Data Officers will architect the modern data environments: Often, it has been a challenge for organizations to ensure that all the enterprise data is aggregated, cleansed, and made available for effective analysis. In the coming days, businesses expect their data leaders to accelerate this otherwise time-consuming process. A significant number of enterprises are in the process of building centralized data lakes and modernizing data environments. CDOs will lead the efforts to break down the data silos, analyze diverse data sets, and accelerate AI/ML projects within organizations.
3. Chief Data Officers will take up the role of data ethicists: Recently, we have witnessed increased customer awareness and escalating discussions around data ethics—the right to know how data is collected, where it is stored, secured, and how it is being used. In the coming days, with dynamic regulatory requirements, data leaders will ensure that customer data is not misused while driving value out of it. As the volume of data increases exponentially, organizations’ data systems and algorithms will need strong ethical considerations. Data privacy officers’ and chief ethicists’ roles and responsibilities will merge and evolve in the coming days.
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