While bigger businesses in specific industries have employed Chief Data Officers (CDOs) for awhile, they remain relatively rare birds.
Not surprisingly the rise of CDOs and the use of the term “big data” in the popular vernacular have coincided.
The rise of big data
The first time that the term “big data” appeared was in 1998; it was coined by John Mashey.
Mashey used the term to refer to the vast amounts of data which were becoming increasingly more complex and unmanageable to process, even back then.
Enter the new kid
The first CDO was appointed in 2003 at Capital One, the US financial institution. As of this year, Gartner estimates that there are currently more than 100 CDOs, mostly working in financial services and the bureaucracy. This is liable to increase, says recruiting firm Russel Reynolds, who claim that by next year half of Fortune 500s will have CDOs on staff. Interestingly, the Federal Communications Commission (FCC) made a recent statement in creating a CDO for every department, a total of 10 CDOs for 10 bureaus and offices.
So just what is it CDOs do?
The role of the CDO defined
The job of the CDO is to focus not only on big data for better data mining and analysis; s/he must find ways to control the volume of data and make it “accurate, actionable and accessible,” to quote TD Ameritrade’s CDO, Derek Strauss.
In a more micro sense, here’s a non-exhaustive list of the principal functions of the CDO, from the Executive Report, The Role of Chief Data Officer in the 21st Century by the Cutter Consortium:
- Data governance
The CDO must organize and execute everything – policies, procedures, structures, roles, and responsibilities – that is required for proper management of data assets. This includes establishing things such as decision rights, rules of engagement, and accountability over data.
The CDO must establish a uniform standards for data naming and acronyms, data modeling, data defect thresholds, data quality improvement, security, and privacy.
- Business Intelligence (BI)
The CDO is responsible for BI. This means CDOs oversee things like decision-support applications which allow managers across the organization to make informed decisions
- Data in the Cloud
The CDO has to carefully consider the use of cloud storage. Generally speaking, huge volumes of data can make cloud storage a good option, but benefits must be weighed against the cost and the risk of exposing data.
- Security and Privacy
The CDO has an important role to play with the security department to determine the level of data security appropriate to the company.
With these new guidelines, the CDO is perceived as being data savvy and capable of changing and improving the big data culture of a company. Should the CDO be a permanent executive or a temporary consultant who trains employees and guides and remodels a company’s data approach only for the duration of his contract?
What about the CIO?
Among CIOs, there is divided opinion on the issue of big data. Some do not see managing it as a great challenge and others think it’s a complete nightmare. CIOs seem to understand the importance of data analytics though – indeed 70% of those surveyed in a report by KPMG said it was a very important business driver.
Whatever their view of big data, the fact is a CDO can’t replace a CIO. Properly managed, it should not boil down to a territorial battle because CDOs allow CIOs to focus on infrastructure and to create value from the use of technology.
The Road Ahead
It’s too soon to predict the long-term future of these roles. For now, it can be said that the CDO title has gained some acceptance in the last 10 years and that CIOs are still critical for businesses. What we do know is that the world’s data now doubles every 2 years, and that the digital universe will grow by a factor of 300 by 2020.
Smart businesses are thinking about how to manage this explosion.