The CDO role comes of age
The role of the CDO is a relatively new position. It follows that in many businesses, the merits of adding a new CXO to the C-suite aren’t easy for some to understand or accept. Often, questions are raised about the role of the existing CIO and why data-related initiatives shouldn’t be or aren’t already included in their remit.
However, the reality is that most CIOs have been operating as Chief Infrastructure Officers, not Chief Information Officers.
The other challenge is that data is actually a business asset, not an IT asset – or at least it should be treated as such. Laney believes that the root of this problem may be that the accounting profession doesn’t yet recognise data as an asset, although it clearly meets the criteria.
Do CEOs truly understand the ‘data world?’
The short answer is ‘no’. All too often, data gets ‘rolled-up’ into an Excel or PowerPoint-based financial report that lands on the CEO’s desk. It’s not surprising then that many CEOs don’t appreciate that data is the lifeblood running through the organisation and the extent to which the business depends on it. More critically, perhaps, many fail to grasp the potential inherent in wielding data as a competitive differentiator.
“Today, many businesses are simply using data for operational processes and then reporting on it using standard business intelligence tools. They don’t understand that there’s a wealth of ways to generate economic value from data by creating data products that you can make available to your suppliers, partners or customers. There are also opportunities to use data for hindsight-oriented analytics as well as in more diagnostic, predictive or prescriptive use cases,” says Laney.
3 top reasons to hire a CDO
When asked how to go about convincing a CEO to hire a CDO, Laney suggests the following statements and how to back them up:
- ‘You may be managing your office furniture better than you’re managing your data.’ The message here is that when it comes to furniture, you’re accounting and budgeting for it, and you know precisely where it is. You’re managing it like an asset – although it’s a relatively low-value one when compared to your data.
- ‘You can’t manage what you can’t measure.’ Because organisations today aren’t compelled to measure their data due to the lack of accounting standards, they don’t manage it like an asset. Ultimately any asset that you’re not managing well is going to be one that you’re not able to fully leverage or monetise.
- ‘Why don’t we sit down and measure the value of data in the same way that we measure the value of other company assets?’ By understanding its cost basis, the margin it’s delivering, its contribution to income streams, its quality characteristics and its potential market value (if you were to package it up and make it available to the broader business ecosystem) you could demonstrate how and where money is being left on the table.
Laney believes that only by measuring data will you be able to discover and demonstrate how underutilised it is – and what its potential is.
Data-sharing across the business
Laney advocates for the sharing of data across the business. “By identifying areas where data is underperforming, you can improve efficiencies within your organisation without making any wholesale changes to your business processes. For example, how could the manufacturing team benefit from accessing customer support data or how could people in customer support use sales data? By pinpointing a few key ways to better ‘flow’ data through your organisation, you can realise great value through minimum effort,” he explains.