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Find your way through the chief data officer (CDO) maze Three questions organizations need to ask and answer An IBM Institute for Business Value (IBV) study on chief data officers (CDOs) revealed that organizations that have a CDO “tend to be analytically mature, business driven enterprises that outperform their competitors.” Unfortunately, like a hedge that has been left unattended too long, CDOs can often find their job an endless maze of poorly defined responsibilities—leading to a high rate of turnover. However, answering the following three questions can help you find the right path. “Few [CDOs] retain the role for more than 24 months” 1 1. What is expected of the CDO? Too often companies fail to define the primary business goal and scope of the CDO role clearly, and the CDO suffers as a result, pulled in competing directions. To avoid this, determine whether the company’s goals for the CDO office align more with the CDO’s ability to be a data integrator, business optimizer or market innovator. In addition, make sure to specify the scope of the CDO’s role—whether that entails data management, technology or analytics or some combination of these. Assessing who the CDO should report to and what the team should look like is essential when growing a healthy CDO office. Selecting the CEO, the CIO or a functional area director as the direct supervisor of the CDO can have a major impact on the visibility of the office and how the CDO interacts with other parts of the business. This choice should be made with the CDO’s primary responsibility in mind. Yet many CDOs are identifying a problem that can trip them up even when the right supervisor is identified– a lack of talent. Leaders should ensure that the CDO team is equipped to meet the CDO’s primary responsibility and that it can scale to his or her needs. “2/3rds of CDOs are being measured against all three objectives at once.” 2 72% 65% 55% 49% 48% 69% 69% Data integrator 3 Business optimizer Market innovator Impact on organization Impact on data management Impact on business 2. How should the CDO office be structured? 34% of CDOs report directly to their CEO 3 31% of CDOs are integrated within IT 34% of CDOs report to functional areas “Almost 40% of CDOs reported a lack of skills as one of their top-two obstacles... Only 20% of organizations with plans to hire a CDO consider this an obstacle” 3 3. What should the priorities be for the CDO? Early on, building a data-driven culture should be a key focus. Leaders should recognize the importance of culture early and set their CDO up for success by allowing him or her the freedom to shape it. Of course the data itself is important too. The type of data that needs to be collected may vary based on the primary responsibility that a CDO has. For example, a market innovator might be particularly interested in the contextually rich data available from sensors and devices. Organizations should ensure that CDOs have the necessary resources to access the data needed to fulfill their primary responsibility. Types of data sets collected by organizations with a CDO 4 The CDO position doesn’t have to get lost in the maze of all things data. The more clearly the CDO role is defined, the easier following the path toward organizational success will be. Whether a company needs someone to fill the role of data integrator, business optimizer, or market innovator, it should take steps to ensure that the CDO has the directive, resources and focus necessary to thrive. For more information about which expectations, structure and priorities might best suit CDOs, read the full study at ibm.biz/2016cdostudy or view helpful solutions at ibm.biz/cdolookbook. 1 IBM Institute for Business Value research and market observation. 2014 to 2016. 2 Tyler, Bruce; Cortnie Abercrombie; and Rebecca Shockley. “The Chief Data Officer playbook.” IBM Institute for Business Value. May 2016. http://www.ibm.biz/2016cdostudy 3 2015 IBM Institute for Business Value Chief Data Officer Survey. IBM Institute for Business Value. 2015. 4 2015 IBM Institute for Business Value Analytics Survey. IBM Institute for Business Value. 2015. www.ibm.biz/2015analytics © Copyright IBM Corporation 2016. IBM, the IBM logo and ibm.com are trademarks of International Business Machines Corp., registered in many jurisdictions worldwide. Other product and service names might be trademarks of IBM or other companies. A current list of IBM trademarks is available on the Web at “Copyright and trademark information” at www.ibm.com/legal/copytrade. Customer-generated data Streaming data and events Third-party data Sensors and devices “43% of organizations planning to appoint a CDO consider developing a data-driven culture a key responsibility compared to 88% of those that have appointed a CDO.” 3
