We first heard the word Chief Data Officer (CDO) way back in early 2000’s. After a decade or so, till 2012, CDO 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 on massive data projects and data leaders grew significantly in importance.
Despite the substantial growth in the last few years, the CDO role now seems to be at the crossroads. Many recent studies point out that CDO hiring has significantly slowed down in the last one year. Businesses probably started feeling that their stakes are way too high to trust the CDOs with large responsibilities such as digital transformation. There are however diverging views and many believe that the CDO role will go through 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 be focused on products, and on 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 is going to be one that is 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 from data. In the current competitive environments, organizations no more rely on intuition-based decision making or on the experience of the senior leadership alone. 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 on data and analytics projects. Evidently, the CDO’s role will have to evolve further to if it has to deliver constant RoI for organizations and continue to exist. In the initial days, data strategists typically focused on the defence aspects of the data and ensured compliance to 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 that the organizations have been building upon. This could be bringing out new services or products based on those data models, or even coming up with a new business opportunity out of it. 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 will expect their data leaders to accelerate this otherwise time-consuming processes. A significant number of enterprises are in the processes of building centralized data lakes and modernizing data environments. CDOs will lead the efforts in breaking down the data silos, analysing diverse data sets and accelerating AI/ML projects within organizations.
3. Chief Data Officers will take up the role of data ethicists: In recent times, 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 be responsible for ensuring that the customer data is not misused during the process of driving value out of it. As the volume of data increases exponentially, organizations’ data systems and algorithms will need strong ethical considerations. Roles and responsibilities of data privacy officers and chief ethicists will merge and evolve in the coming days.
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