10 Ways Cdos Can Succeed in Forging A Data Driven Organization
10 Ways Cdos Can Succeed in Forging A Data Driven Organization
Driven Organization
Published: 22 May 2019 ID: G00378249
Key Challenges
■ Data and analytics leaders may not recognize that the definition of data and analytics success is
to become an enterprise engine of value creation.
■ Culture and data literacy are the top two roadblocks for data and analytics leaders.
■ “Information as an asset” is a popular idea, but a scarcity of asset management standards,
unfamiliarity with data monetization and a lack of experience prevents data and analytics
leaders from driving value from data.
Recommendations
To achieve success in their role, data and analytics leaders, including chief data officers, must:
■ Establish clarity for the CDO’s role and purpose by defining and advocating the role’s vision,
priorities and scope.
■ Transform their enterprise by prioritizing cultural change and fostering a data-driven orientation.
■ Apply asset management disciplines to select information assets and borrow ideas from other
industries and competitors to monetize their data.
■ Apply all of these 10 best practices to aid the data-driven transformation of their enterprise.
Table of Contents
List of Figures
By 2022, 30% of CDOs will partner with their CFO to formally value the organization’s information
assets for improved information management and benefits.
By 2023, data literacy will become an explicit and necessary driver of business value, demonstrated
by its formal inclusion in over 80% of data and analytics strategies and change management
programs.
Introduction
The chief data officer’s (CDO’s) mission has shifted from risk mitigation to creating business value
with data assets. “Enhance data quality, reliability and access,” “Enhance analytical decision
Analysis
Define the Vision, Priorities and Scope of Your CDO Role
For many organizations, the CDO role is still new, untested and somewhat amorphous. In these
circumstances, the scope, priorities and responsibilities of the CDO’s role can quickly become
inflated. It seems that once a CDO is hired, regardless of how small the associated budget,
resources and team, every data problem that crops up, however minor, seems to fall into their lap.
The problem of defining and aligning priorities, while leaving a buffer zone of flexibility for new
things that come up, is a common one for almost any leadership role. To achieve clarity of role and
purpose CDOs should act quickly and decisively to determine the data-driven ambitions of the
enterprise, set their scope and actively communicate their role. There’s no absolute right or wrong
to this determination. The critical issue is, don’t leave these items up for grabs:
■ Take the lead in defining your enterprise’s data-driven ambitions and the necessary governance
changes to achieve these.
■ Craft a bold, inspiring mission statement, and then build programs that deliver indisputable
value.
■ Establish your CDO role and shape the basic perceptions that others will associate with your
subsequent plans and actions.
■ Proper preparation, assessment, planning, acting, measuring and, above all, communication
can greatly enhance your chances of success.
■ Learn how to create the influence models that identify your target audiences, how to reach
them, the prescriptions to advance your objectives and the metrics to measure your success in
reaching them.
■ Avoid overemphasis on tactical actions and decisions. Our recent CDO survey highlights this
potential blind spot for CDOs. The tactical bias is evident in the responses regarding the
organization’s operating model — where doing is more of a focus than those elements that build
organizational muscle for the future (see Figure 1).
CDOs should strive to balance strategic and tactical activities. Being driven by business goals is
important, but most CDOs’ operating models skew toward being a service center rather than
cultivating data-driven competencies across the enterprise. The lack of attention to training and
coaching, to self-sufficiency and to consultative engagement reflects an obsession with short-term
achievements and a never-ending thirst for delivery. It is essential to nail down the scope and
purpose of your role as soon as possible, but expect them to change over time. Set and agree on
some concrete starting expectations and make these a part of your influence plan for all
stakeholders.
Further reading:
■ “Dare to Dream! Give Your Data and Analytics Programs a Mission to Transform Business and
Improve the World”
■ “Start Your Data and Analytics Strategy With a Clear Value Proposition”
■ “The Chief Data Officer’s First 100 Days”
■ “How Data and Analytics Leaders Can Create Effective Influence and Communication
Strategies”
In talks with Gartner clients, many CIOs express anxiety over the CDO role. This anxiety frequently
relates to reporting relationships. Most CIOs ask if the top data and analytics leader must report
outside IT. The answer is “no,” and they need not be concerned even if they do. This introspection
is usually a sign that the CIO knows the organization needs to do something different, and they want
to do what is best. That said, the CDO role is most often a business-reporting role.
In Gartner’s 2018 CDO Survey, 49% of respondents reported to a top business executive (CEO,
COO, CFO). This was up from 45% in 2016 and 48% in 2017. Likewise, 22% of respondents in
2
2018 reported to a top IT executive (CIO, CTO); down from 23% in 2017. A business-reporting
CDO may create uneasiness for an established CIO, but it may be the only way to show the
importance of data and analytics.
In many larger enterprises — and those of all sizes within certain sectors — the CIO role has
become extremely difficult and complex. When the CIO is responsible for the infrastructure,
innovation and leadership that run digital businesses, it is more than a full-time job. Where there is a
lot of regulation, legislation and even litigation, the CIO may lack the time or expertise to function as
the head of information governance or that of monetizing and exploiting data. Such CIOs are more
likely to appreciate a CDO. Accordingly, a CDO must understand the immense pressures on the
CIO.
From an enterprise perspective, CDOs and CIOs have many shared executive relationships, and the
success criteria for each role indicates that one cannot succeed without the other. As a CDO, don’t
hesitate to seek coaching or mentoring on relationship building. Again, clearly defining your role
and, especially, having the CIO involved in this process can help.
The concerns of top CDOs are very similar to those of top CIOs — innovation, digital transformation
and business strategy are the three most-cited non-IT responsibilities that top CIOs have in addition
to their IT responsibilities. An enterprise cannot succeed in these endeavors without the teamwork
of these key executives. Those that compete against each other only damage other critical
executive relationships and inhibit everyone’s ability to achieve the desired enterprise outcomes.
As your organization’s top data and analytics leader, you should create a strong working relationship
with the CIO. Understand their goals and how they are measured and engage them in areas that
drive mutual success. The CIO should do likewise.
Further reading:
■ “Improving the Working Relationship Between the Chief Data Officer and the Chief Information
Officer”
“With this data, or this type of insight, how could we fundamentally change the value
propositions for our customers?”
Conceiving and answering these types of questions requires an expanded set of data and analytics
competencies. It is not just the data and analytics department, but the entire enterprise that gets
involved. Achieving data and analytics success over your competitors requires a much more
expansive role for data and analytics in business value generation, and therefore in everything your
organization does.
This expansive approach fundamentally changes the data and analytics team’s orientation and
work:
CDOs should deliberately orchestrate the creation of competencies across the enterprise, ensure
the consistency of distributed practices and build enterprise abilities that underlie future success.
Further reading:
Some describe culture as “the collective conversations of an enterprise.” As a result, one cannot
change the behaviors and belief systems of an enterprise without changing the conversations within
it. The CDO is the source of leadership for fostering a data-driven business. But this role achieves
its goals far more by influence than control. In fact, you can think of the CDO as the “chief data
influencer,” working steadily to enable the organization to become increasingly data-driven in its
decision making and operations, and in the behaviors of its people. This means that CDOs must
engage with business and IT stakeholders at a human level, taking into account their motivations,
Data literacy is an essential part of a data-driven culture. An information language barrier exists
across business units and IT functions, rooted in ineffective communication across a range of
stakeholders. As a result, data and analytics leaders, including CDOs, struggle to get their message
across and to fully utilize key information assets. The increasingly pervasive nature of data makes it
crucial for all employees to learn to “speak data” — to become data literate (see “Information as a
Second Language: Enabling Data Literacy for Digital Society”).
In conjunction with attention to the data-driven culture, addressing better data literacy enables the
skills, knowledge and aptitudes required to work with, interpret and act upon data (see “Getting
Started With Data Literacy and Information as a Second Language: A Gartner Trend Insight
Report”). Speaking a common data language results in:
■ Business leaders internalizing the expectation that data assets exist to be shared
■ Frontline associates taking responsibility for ensuring quality data
■ Stakeholders collaborating in conceiving and creating data-intense solutions
■ Employees “conversing” with data — using self-service tools — to discover new insights and
opportunities
Further reading:
CDOs can start treating information as an asset by leveraging established asset management
practices. These practices can draw on various well-known IT and business disciplines. They offer
guidance to help organizations successfully embrace a new, transformative view of data for the
digital business. CDOs should identify these existing disciplines and practices within their
organizations and begin applying them to information.
Treating data and analytics as assets does not mean identifying asset owners. One practice that
should be abandoned is the notion of a “data owner.” This impedes exploiting information assets by
encouraging data hoarding and silos, rather than data sharing and availability. Without the alternate
concepts of information accountability and responsibility, the illusion perpetuates that whoever is
designated as the “owner” has final say over its usage. More importantly, it sets the wrong tone
about information as something other than an enterprise asset. CDOs are, increasingly, challenging
these attitudes.
The idea of a “data trustee” or “sponsor” establishes information as a shared resource with shared
responsibility. Information treated as a true enterprise asset, rather than a hoarded resource, can
generate more value and better amortize the costs of generating, collecting, storing and securing it.
“Data ownership” has a second meaning outside the organization — that of legal property.
Unfortunately, there is little by way of legal precedent for recognizing information as property.
Instead, CDOs, along with their organizations’ legal teams, should focus on ensuring, establishing,
controlling and taking advantage of contractual rights to information.
Further reading:
Our 2018 CDO survey identified how CDOs are driving business benefits with information, now and
in the future. Yet the top three methods still remain inwardly focused on process improvement and
enhanced or new offerings. CDOs should adopt underutilized methods to drive more external value
from the available information assets (see Figure 4).
As a business asset, information has economic value that organizations can “turn into money” in
two ways:
■ Direct monetization is about a transaction. This is what most people think about when they
consider monetizing data. Transactions take many forms. Examples include:
■ Bartering/trading with information
■ Creating information-enhanced products or services
■ Selling raw data through brokers
■ Offering data/report subscriptions
For example, in the retail industry companies are licensing their point of sale (POS) and other data
to their consumer packaged goods (CPG) partners, and telcos are trading data with suppliers and
partners for goods, services or favorable contract terms.
■ Indirect monetization is about optimizing the business. It entails using information internally
to improve a process or product in a way that results in measurable outcomes, such as income
growth or cost savings. Examples include:
■ Improving operational efficiencies
■ Developing new products or markets
■ Building and solidifying partner relationships
■ Publishing branded indexes
For example, aerospace and other defense-related industry sectors in particular are extremely
conscious about issues leading to cost overruns and program delays. Delays can result in milestone
payments, withholding of payment, write-offs, debookings and fewer contract awards. Moving from
trailing indicators to leading indicators can generate tremendous value by avoiding situations that
degrade performance. Such indirect monetization improvements can avoid potential losses in the
hundreds of millions of dollars, reduce business risks and bring solutions to market faster.
Organizations should evaluate and experiment with both direct and indirect approaches in order to
maximize their monetization options and opportunities. At the same time, the CDO needs to be the
voice of reason. You should apply a feasibility checklist to answer questions related to the
practicality, marketability, scalability and economy, along with the legal, technological, ethical and
ecological ramifications of new ideas for innovating with information.
Further reading:
Unfortunately, according to our recent CDO survey, most organizations we surveyed are not
measuring their information assets in any way (see Figure 5). This certainly doesn’t bode well for
their ability to manage or monetize information as effectively as it can and should be.
To help data and analytics leaders, Gartner has developed six information valuation models that use
different assumptions to compute different types of information value (see Figure 6). These include
three foundational and three financial measures:
■ The foundational models consider the quality-related aspects of information, or its impact on
alternative performance indicators.
■ The financial models measure value in monetary terms by adapting the accepted methods for
valuing traditional assets. (When adopting financial models, solicit the support and involvement
of finance.)
CDOs can use these results to improve data collection, management and deployment. In such
cases, the measure itself is not as meaningful as:
■ The delta between the realized and potential value of an information asset
■ The capability of tracking the appreciation or depreciation of an information asset’s value over
time
There are models for various needs and circumstances. Selecting which to use and when to use
them depends on your objectives. Some are leading indicators; some are trailing indicators. Some
are oriented toward improvements in enterprise information management (EIM); some toward
assessing information’s business benefits. You may find that it makes sense to apply several models
for the benefit of different IT, information, financial and business leaders — or for different kinds of
information assets.
Further reading:
■ “Applied Infonomics: Why and How to Measure the Value of Your Information Assets”
■ “How Chief Data Officers Can Succeed by Driving Measurable Business Value”
■ “Applied Infonomics: Use a Modern Data Catalog to Measure, Manage and Monetize
Information Supply Chains”
Don’t limit your curiosity to your own vertical industry, or you’ll be permanently in second place (or
worse!) as you constantly react to your rivals’ information initiatives. There are many great ideas
being tried and proven in other industries. Why not consider how to adopt and adapt them? You can
draw on professional and personal network contacts, various industry conferences and
publications.
Another key source is Gartner’s growing “Art of the Possible” library of examples of information and
analytics being used in high-value, innovative and transformative ways. It includes real-world use
cases for almost every industry, business function, geography, type of data and style of analytics.
Gartner clients can receive selections from this library via a written-response inquiry requesting
examples for particular areas of interest, such as customer experience or supply chain.
Further reading:
Sometimes, external data can be a tremendous driver of opportunity, yet many data and analytics
leaders and other business leaders fixate on their own internal information assets. This narrow focus
leaves them unaware of the many external data sources that they can combine with internal data to
achieve dramatic business outcomes. People switch banks and paint their houses before and/or
after they move. What are the customer milestones your organization could and should be
recognizing and taking advantage of?
Be relentlessly curious. External sources of information are proliferating through online government
databases, public records and the increasing spread of social networks. Anonymized data is now
being sold — and monetized — by other companies. Discover what information assets exist outside
your organization. Identify their potential value. Start curating them. Your organization certainly has
someone or even an entire department for procuring office supplies, but do you have anyone whose
job it is to procure “data supplies”?
Further reading:
Technology innovation outpaces our ability to anticipate all the unintended negative consequences
that may arise from it. Data and analytics leaders must counteract this by creating a culture of data
ethics — influencing the data product life cycle and data and analytics strategy while enabling
business value.
CDOs have to maintain and advocate an orientation toward information ethics. They should plan on
working closely with the legal team, the public relations team, the CFO, CIO and other business
leaders to ensure that potential uses and management of information aren’t going to cause
problems. Remember, information is nondepletable, easily transportable and highly fungible. These
characteristics mean that information can be misused very easily compared with other assets.
Information regulations are exploding and it’s a murky, confused and uncertain regulatory
environment. A CDO needs to be keenly aware of overlapping, inconsistent laws, industry
regulations, company policies, and the policies of suppliers and partners with whom they do
business. CDOs of banks and government organizations, in particular, have said in client
discussions that the gaggle of overlapping levels of regulation creates direct and baffling
contradictions. For example, if they share data with someone requesting it, they’re out of
compliance due to one law, but if they don’t share it then they’re out of compliance with another
law.
Moreover, customers of different ages, backgrounds and geographies each have their own idea of
what constitutes the so-called “creepy line” when it comes to using the personal information that
organizations collect about their customers. This creepy line is fluid, dynamic and unpredictable.
But you need to know where it is: for each customer at any given point in time, for different
customers and partners, and in each of the localities in which you do business.
Further reading:
Evidence
1 Gartner’s 2018 Fourth Annual Chief Data Officer Study was conducted via an online survey from
September through December 2018, with 257 data and analytics leaders from across the world. The
purpose of the survey was to test a set of hypotheses about the CDO role and the office of the
CDO, in order to understand how this rapidly growing business function is maturing and the
resulting business impact.
Respondents were required to have the title of CDO or CAO, or to have the responsibilities of an
executive-level data and analytics (D&A) leader in their organization (in the case of organizations
without an official C-level D&A title). The survey sample was gleaned from a variety of sources
(including LinkedIn), with the greatest number coming from a Gartner-curated list of more than 2,000
CDOs and other high-level D&A leaders.
2 Gartner’s 2017 Third Annual Chief Data Officer survey was conducted by phone and online from
July through September 2017, with 287 CDOs, CAOs and other high-level data and analytics
leaders from across the world. In order to participate, respondents were required to have the title of
CDO or CAO, or to be a senior leader with responsibility for leading data and/or analytics in their
organization. The survey sample was gleaned from a variety of sources (included LinkedIn), with the
greatest number coming from a Gartner-curated list of almost 2,000 CDOs and other high-level data
and analytics leaders. For further details, see “Survey Analysis: Third Gartner CDO Survey — How
Chief Data Officers Are Driving Business Impact.”
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