By Chris Wilson
According to a number of authorities on the subject, 90% of the world’s data has been created in the last two years. This has fuelled a growing appetite to leverage data as a critical asset whilst increasing the pressure to contain associated costs. The appointment of a Chief Data Officer (CDO) can be a catalyst to addressing these challenges.
Each organisation will have its own set of circumstances leading to the appointment of a CDO, and these will dictate the shape of the CDO role. Across the board, however, there are certain data-related responsibilities that appear to be covered by the majority of known CDOs, namely analytics, architecture and governance.
Financial institutions are being moulded by ever-changing economic, regulatory and technological factors. Within this context, the role of CDO is being shaped by a set of common industry-wide characteristics, including strategic thinking, commercial acumen and regulatory expertise.
As with the shape of the role, the reporting line associated with the CDO varies from one organisation to the next. Looking across all industry sectors, CDOs can be found reporting into the CEO, CFO, CIO, COO, and other C-level leaders, such as the Chief Marketing Officer and another with the CDO title – the Chief Digital Officer. Within financial institutions, however, the vast majority of CDOs report to COOs. Taking these findings as a whole, it is clear that CDOs must have senior sponsorship.
The beneficiaries of data maintained and utilised by financial institutions are the lines of business. Decisions regarding customers, investments, products and risk are made by the business, but their effectiveness depends upon the accuracy and quality of data. Perhaps, then, CDOs can be understood as business-driven and technology-enabled.
The CDO’s responsibilities are too great for one person to deliver, especially in large global financial institutions. A broader commitment is required, from both the business and supporting functions. Many organisations have, or are in the process of creating, a dedicated organisation for their CDOs – to enable them to define and deliver data strategy through the support of an aligned and collaborative infrastructure, for the benefit of the organisation as a whole.
Whilst the CDO role has great potential, there are some major challenges that must be addressed. First, the competition for talent is fierce as there is a shortage of people who have business and technology knowledge. Secondly, sponsorship – this can also be a challenge but is fundamental for the CDO to be effective. Thirdly, scepticism – this can often be the enemy of sponsorship and should be overcome by a proper understanding of the CDO role, its benefits and potential return on investment. Once these challenges have been addressed, funding and scope will be next on the list.