While the power of technology has never been greater, tech success still depends on applying the right human insight and understanding to unlock its full potential.
And data is a key component to its success.
When combined with commercial understanding, functional context and sector experience, data offers the insight organisations need to make bold decisions and take the right actions that will deliver sustained outcomes and growth.
But as the scale of information available to organisations continues to increase - driven by greater use of cloud technologies, artificial intelligence (AI) applications and automation - some can struggle to get the best out of their data. To harness it as a strategic asset and extract maximum valuable insight, human intervention remains critical.
Innovative, tech-enabled businesses are looking to Chief Data Officers (CDOs) to raise the bar on data initiatives, define the company’s data strategy and uncover new insights. CDOs play an increasingly critical role in new business strategies and transforming businesses, highlighting just how important data is for responsible growth (to internal and external stakeholders). However, there remains a scarcity of these individuals: people that can combine sufficient commercial and people management skills with the requisite deep understanding of data and technology.
Now is the time to invest in appointing a CDO - a single accountable executive responsible for driving growth, delivering value and enabling a transformation with data. Understanding and capitalising on insights is a crucial, no-regrets move that will benefit a business in the long term, particularly during periods of uncertainty.
A driver of data-led tech transformation
A CDO’s role is broad, as an owner of the proprietary data and platforms within a business and responsible for the execution of data initiatives across organisational and functional silos. Alongside ensuring quality and governance, they must enable employees across the business to gain richer, more useful insights to discover creative solutions to some of their biggest challenges.
With such exposure to a wealth of data and insight, CDOs are perfectly placed to lead an approach to transformation that factors everything from human behaviour to industry knowledge, one that not only helps predict and mitigate risk but capitalises on technology investments to drive growth.
Joey Jegerajan, Chief Technology Officer, Consulting, at PwC UK and EMEA says: “Human intervention, understanding and judgement are responsible for many of the successes and failings of technology. Nowhere is that more evident than how organisations strategise, understand and interpret data, with the right balance of people and technology critical to unlocking its full potential. The CDO’s role is integral here, equipping the business with the knowledge, insights and confidence needed to drive business strategy.”
“Human intervention, understanding and judgement are responsible for many of the successes and failings of technology. Nowhere is that more evident than how organisations strategise, understand and interpret data, with the right balance of people and technology critical to unlocking its full potential. The CDO’s role is integral here, equipping the business with the knowledge, insights and confidence needed to drive business strategy.”
While most organisations understand the need to shine a spotlight on data, by 2021 less than a quarter had appointed a CDO. Of those that have, most are concentrated within particular sectors and regions. Currently, CDOs tend to fit a specific profile - they’re often male (82%), come from a tech experience background (66%) and, most often, report into Chief Information Officers (CIOs). This profile needs to shift, to bring a greater diversity of thought and experience, and introduce broader skills that increase the capability of data leadership more broadly.
While appointing a CDO should be a no-regrets move, there are elements of the role that may require businesses to think about how they measure impact, ensuring that diverse perspectives are captured to drive the greatest success.
The right time for a CDO?
After a period of digital transformation in industry, many organisations now have a better technology infrastructure in place and are primed to capitalise on the promise of data. The modernisation of core business technology such as enterprise resource planning (ERPs) and customer relationship management (CRM) platforms has radically improved the capture, structuring and reusability of data across businesses.
To capitalise on this, CDOs are helping their organisations to architect data in new ways, tied to the most critical agenda on cost efficiencies, revenue growth and customer experience improvement. And they are exploring opportunities to create value from data assets outside their traditional business models. They do this by building partnerships with other companies, public bodies and research institutions, and forming data ecosystems that make the most of new, advanced means of secure and privacy compliant data sharing.
Andy Wisnia, Corporate Strategy Partner, PwC Strategy& says: “To maximise value from data, CDOs need to strike a balance between data governance and managing risks on one hand, and pushing data innovation and creativity on the other. That’s creating a tension as businesses continue to build their confidence in using data at scale and try to understand where and how quickly returns on data investments will materialise. CDOs can occupy a unique position to help other business leaders deliver on organisational purpose and strategy with data, making performance more transparent and enabling digital change, at pace. It’s no surprise that we are seeing more large businesses in all sectors choose to create the CDO role and function, with increasingly wide remits."
“CDOs can occupy a unique position to help other business leaders deliver on organisational purpose and strategy with data, making performance more transparent and enabling digital change, at pace. It’s no surprise that we are seeing more large businesses in all sectors choose to create the CDO role and function, with increasingly wide remits.”
Unsurprisingly, companies with a large payroll and multi-billion pound revenues are more likely to employ a CDO than smaller organisations. In our global study we found that in the UK, 57% of companies with $50 billion+ revenues have CDOs, compared to just 21% in companies with less than $5 billion. Yet, the influence of a CDO is far greater for smaller businesses that are more agile and less siloed: they can move more quickly on data initiatives and can unlock value with greater ease.
The influence and impact of CDOs
The presence of a CDO on a leadership team or board elevates the data discussion within the organisation and externally, helping to shape the narrative at a strategic level to derive greater value from assets. Companies with a CDO can better demonstrate an unbiased commitment to data. For organisations without, conversations around data are often led by other functional leaders - such as a Chief Marketing Officer (CMO) or Chief Information Officer (CIO) - who can focus more exclusively on narrow areas of data use or specific issues such as security. A CIO acting as a data lead, for example, is likely to take a very risk-averse approach and increasingly focus on protecting data leaks, which could stifle innovation and information sharing.
Data sharing is an area where the CDO function should come into its own. Traditionally, an organisation’s approach to data sharing has been risk averse, constrained by security, regulation and governance. While sensitivity around data remains paramount, the value that can be derived from unlocking growth by sharing data across ecosystems and monetising assets is becoming increasingly apparent.
Data sharing enables innovation, improves the customer experience and facilitates growth, yet organisations can remain reluctant to move beyond a defensive stance on their data. When discussing data publically in investor presentations and annual reports, companies have proved twice as likely to refer to data “defensively”, in terms of security, regulation or governance, than in the context of “innovation”, in areas such as value and growth.
Here, CDOs are inspiring a change in mindset and helping democratise an organisation’s data. This is leading to a cultural change to encourage the sharing of data securely while empowering their workforce to create innovative data assets and insights, according to Jegerajan.
“Sharing access to data is likely to feel unnatural to organisations that have traditionally safeguarded data heavily. A strong CDO has the expertise to break down these barriers while ensuring all parts of the ecosystem are using data responsibly. It may feel uncomfortable early on, but managed correctly, the rewards will outweigh any concerns,” he says.
The potential for the CDO role and function appears to be growing significantly, although time will tell if the expected industrial value creation from data can truly be delivered. The next iteration of the Chief Data Officer study - due to be released later this year - will further examine this trend. It will also test if the early adopters of CDOs have been able to drive a competitive advantage from data to deliver improved commercial performance.
“Sharing access to data is likely to feel unnatural to organisations that have traditionally safeguarded data heavily. A strong CDO has the expertise to break down these barriers while ensuring all parts of the ecosystem are using data responsibly. It may feel uncomfortable early on, but managed correctly, the rewards will outweigh any concerns.”
Top 5 tips to drive value from data
- Have a single view across your business that can be used to inform strategic decision-making and prioritise strategic investments that drive growth using internal and external data.
Disrupt business and commercial models through automation or monetisation, considering how you can offer services more effectively, in a different way.
Empower your employees with self-serve platforms and upskilling to become more data-driven, so they can identify the use cases and insights most applicable on the ground.
Anticipate customer needs so you can provide relevant information underpinned by data to improve customer engagement.
Use data to drive improved operations by optimising processes, using analytics automation and enhancing your operating model to make real-time interventions and drive better outcomes.
To discuss anything raised in this article, please get in touch.
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