The volume of data that businesses are managing is increasing exponentially, with 329 trillion megabytes of data being created every day, according to Statista.
At its current rate, data growth is increasing 23 per cent year over year.
As businesses work data into the core of their operations, especially within decision-making, the job of managing an entire company’s data is going beyond what Chief Technology and Chief Information Officers signed up for.
This shift has seen the emergence of a new technology role in the boardroom: The Chief Data Officer.
What is a Chief Data Officer and what do they do?
The Chief Data Officer (CDO) is responsible for the governance and utilisation of data across an entire organisation. With businesses becoming increasingly reliant on data, the CDO acts as the boardroom link between the business’s strategic direction and how a company manages and deploys its data.
Speaking to TechBullion, Mike McKee, CEO of data management firm Ataccama said: “CEOs expect leadership teams to define deliverables against business objectives, and a successful CDO will know how to plan data management initiatives that will achieve wider outcomes for the organisation. These could be in areas such as reducing risk, ensuring compliance, increasing revenue, improving customer experience or achieving operational efficiencies.”
Of the top 10 UK companies by market cap, three employ a dedicated Chief Data Officer, one has a Chief Data & Analytics Officer, and one has a Head of Data Governance. With half of the UK’s largest companies shifting towards a CDO to oversee data management, the trend should continue with businesses moving towards a singular C-suite data lead, supported by teams of data scientists, analysts and other data colleagues.
Traditionally, CTOs and CIOs are the most likely to move into a CDO role, already with an understanding of data within the business due to overlaps in their remit, as well as experience sitting in the leadership team to understand the strategic aims of the business.
McKee felt that CIOs had the closest overlap with a CDO, claiming that ‘both roles have a common interest in transforming processes and enabling business efficiency by using technology and data,’ but expressed that a clearly positioned and well-defined CDO role should relieve CIOs of a significant portion of their responsibilities.
CTOs and CIOs often have a background in managing and implementing new technology initiatives alongside the technical operations within a business, which is underpinned by data. This makes the shift to becoming a CDO easier than other leadership roles.
Heads of Data also have a natural pathway, already engrossed in the day-to-day of data management and data quality as part of data initiatives. The main challenge that Heads of Data need to overcome is pivoting towards a more overarching strategic focus, aligning data values with the business’s values.
The importance of data governance
Data governance is the primary job of a CDO, setting internal data policies and standards on how data is collected, stored, processed, and disposed of, to ensure that a business is maximising the value of its data.
Under a CDO’s governance, they decide who can access certain types of data and make use of it.
As the role emerged, data governance accounted for the majority of a CDO’s responsibilities, creating frameworks, implementing systems and setting the strategic direction of a business’s data management and usage. Within data governance, CDOs often place an emphasis on the security of their data. In fact, 52% claim that data security remains their most critical responsibility, according to IBM.
Increasingly, a CDO’s focus is shifting towards using data to drive business outcomes.
CDOs need ‘undisputed ownership of all data-related operations’ according to McKee, from governance initiatives to prevention of data breaches to enabling business growth initiatives and a data-driven culture.
As the volume of data is rising quickly, businesses are relying on data as part of their decision-making processes more and more, giving rise to one of the most important rising members of the C-suite – the CDO.
The CEO’s most trusted adviser?
Not quite yet… but CDOs can play a vital role in supporting CEOs.
McKee’s top three ways that CDOs can support their CEO are communicating how data-led projects align with business goals, evangelising the created business value, and providing updates on the rollout timeline for data-driven projects to ensure visibility of what is happening, why, and when.
“In general, it will be the organisations with a clear data strategy that will be fast to respond to external forces like technology innovation such as generative AI, new regulations, and seizing opportunities to address an unmet need or gap in the market,” McKee said.
With data an increasingly central component of business operations, what are you waiting for? It might be time to hire a Chief Data Officer.
