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Editor's Note: The chief data officer position is surfacing more and more, particularly among the biggest organizations: Gartner estimates by 2021 the office of the chief data officer will emerge as a "mission-critical function" -- along the lines of IT, business operations and finance -- in 75% of large enterprises.
The CDO role initially emerged among regulated enterprises needing someone to watch over data governance. But the scope has grown to include digital transformation initiatives and other forward-looking endeavors. In this article, Ramesh Nair, North America financial services leader at Accenture Applied Intelligence and Huendy Espinal, manager at the same Accenture unit, discuss the CDO's key responsibilities and challenges, which include creating a solid data foundation and getting tangible results from data investments.
Why should channel partners care about the CDO function? It makes sense for partner companies to understand the CDO role, especially if they work with large enterprise-class clients or firm at the upper end of the midsize company space. Here's another partner angle: Some consulting firms offer virtual CDO services to smaller firms that can't afford a full-time executive, in much the same way some managed service providers offer virtual CIO services.
Enterprises across industries have been involved in the data game for over three decades now, transforming bits and bytes into insights and, increasingly, tangible business outcomes.
Traditionally the CIO has been focused on the IT aspects of data -- storage, volume, recovery, security, ingestion, access and availability. However, as the value, centrality and complexity of data continue to increase, organizations need someone to create a strategy for optimizing data for competitive gain, executing on the delivery of this strategy, and extracting value from data. In conjunction with the CIO, this role is responsible for innovation and growth agendas, transformation from legacy systems to new big data ecosystems, and strategic positioning for next-generation technologies like artificial intelligence (AI) and blockchain: the CDO.
In our experience CDOs take responsibility for a multitude of activities within an organization, from data management and analytics, to ethics and digital transformation across business units. This CDO role is especially critical in the financial services industry as these organizations process massive amounts of data on a daily basis, and plan and navigate through an ever-changing regulatory landscape. Financial organizations are also constantly finding new ways to utilize AI and machine learning to drive tangible business results, enhance cybersecurity, improve data quality and drive operational efficiencies. As such, the need for a CDO in these companies is very real, but not without its challenges.
Key challenges of the data-driven enterprise
As business executives continue to have even greater expectations from their data, many are challenged to keep up with today's data demands and sophistication of analytics technologies.
Earlier this year, Accenture Applied Intelligence hosted a two-day CDO Roundtable for financial services. With representation from companies across the industry -- banking, capital markets, insurance -- there were many different responsibilities and different bosses -- and our findings were quite telling about the current state of the industry.
With the proliferation of data into nearly every business decision, the CDO role is more significant than ever before. We know banks and insurers have been using data for decades and are at the forefront of CDO adoption, but across industries, the bigger issue we're seeing is the lack of organizational commitment to empower this growing role.
Our roundtable participants provided practical insight into what's keeping them up at night. These challenges fall into three broad categories:
- Getting the foundational data capabilities right: The foundational capabilities (data warehousing, metadata management, data quality, data lineage, and data governance) are necessary for a strong data foundation. But CDOs continue to struggle to extract value and demonstrate tangible and sustained impact from their current and emerging data investments, and preparing for future demands and capabilities.
- Decommissioning and migrating legacy data and analytical environments: One of the major challenges of building new capabilities is to "untether" from the past and migrate from legacy data and applications to the big data and cloud models. It was discussed that such journeys are not just technical migrations but a holistic set of strategic actions to "transform" technical, data, analytical, talent and governance disciplines.
- Transforming talent and culture: Talent, organizational structure, remits, and the decision rights of data managers, users and scientists, and the CDO function are critical to the transformation journey. For most financial institutions, the question was not about gaining the talent, but maintaining and developing talent in light of the war for talent, and the attractiveness of the digital and technology companies for the new wave of data and analytics talent.
Opportunities to demonstrate value
Although these are significant challenges, they can stand out as great opportunities for CDOs to demonstrate value and carve out important value-driving roles for themselves. As the CDO role continues to evolve and become integral to business functions -- even for organizations outside the financial services space -- companies must empower CDOs to step outside their comfort zones, seek broader remits and decision rights, and to lead and drive the transformation agenda.