Big Data and The Emergence of The Chief Data Officer
There’s no question that we now live in a data-driven age. But what was it that triggered this data-centric corporate mentality? In this Forbes article, CEO and NewVantage Partners’ managing partner Randy Bean argues that it began as a direct result of the 2008-2009 financial crisis, and that the role of data in today’s business world has only grown and become more important since then.
Increased government oversight and regulations, made it essential for most companies – particularly financial services to invest in data quality, accuracy, transparency, privacy, and reporting.
The now-prevalent role has evolved in several ways since 2008, and what began as a more defensive role now helps companies perform better by using data to innovative processes and gain a competitive market advantage. Bean’s article breaks down the historical journey of the CDO role, discussing how it’s transformed through the years, what it looks like today, and what its possibilities and limitations are for the future.
The focus on Big Data is a recent development — and it isn’t going anywhere.
“Prior to the emergence and popularization of Big Data over these past five years, data has been perceived as a secondary priority for most corporations.” But as post-2008 regulations required financial companies to better track their data, it became necessary for companies to designate specific roles to do so. “According to a 2016 New Vantage Partners survey, 62.5% of firms report that they now have at least one Big Data initiative that has been implemented.”
The Chief Data Officer role began as a defensive one, but the job function is evolving.
The primary job of data-focused professionals began as a way to ensure accuracy: “There were material consequences to be paid for for not ‘getting the data right.'” But the role has changed as the years roll on, and it’s become clear that data analysis is now an essential part of corporate business strategy. In fact, 54% of firms surveyed by NewVantage Partners 2016 Big Data Executive Survey have appointed a Chief Data Officer: “Today, the Chief Data Officer has become an established figure for a majority of corporations, as firms come to recognize the central importance of developing and managing a data strategy, defining and implementing a data governance process, and ensuring regulatory compliance.”
The future responsibilities of the CDO role may be unclear, but the role is definitely here to stay.
Some companies keep their CDOs focused on more defensive strategies, but others are taking a different approach: “Offense-minded firms seek breakthroughs, realized by leveraging data through iterative learning — rinse-and-repeat; test-and-learn; fail fast, learn faster — designed to achieve “quick wins” that build organizational credibility, alignment, momentum, and demonstrate tangible business value.”
In his new book, Only Humans Need Apply: Winners and Losers in the Age of Smart Machines, Tom Davenport identifies Four Eras of Information, dating from 1975. Confirming the speed with which these eras are progressing, Davenport notes that the third and fourth Eras of Information have been spawned just within the last three years. These eras have been driven by the rise of Big Data.
The accelerating proliferation of data has fueled a growing prominence of data within the corporate enterprise. A growing majority of firms are seeking to leverage data as a critical business asset as they look to drive new sources of business value. According to a 2016 NewVantage Partners survey, 62.5% of firms report that they now have at least one Big Data initiative that has been implemented; nearly double the 31.4% of firms who reported the same result in 2013. As firms comes to recognize the central role that data can play in their success, a growing number of companies are investing in efforts to forge a data culture, enabled by data-driven decision making.
Prior to the emergence and popularization of Big Data over these past five years, data had been perceived as a secondary priority for most corporations. Often treated as a corporate backwater, responsibility for data was commonly relegated to the purview of data architects and analysts. These data proponents struggled to secure a seat at the executive table, as they attempted to make the case for data. One executive, who was an early believer in the potential business value of data, and champion of a more prominent role for data within the corporation, has lamented that “once we got into the room, it was still at the kid’s table”.