As we embark on the dawn of the fourth industrial revolution with all its economic promises and upheaval, we see data swiftly emerging as a critical asset in many industries. The traditional Chief Information Officer (CIO) role is being augmented by new roles such as Chief Data Officer (CDO) to bridge the gap between business, operation and information technology. Taking an overall approach to curation, alignment, operationalization and monetization of data in the new economy, the CDO provides a much-needed emphasis and general advocacy for data in the new era of a digital economy. With smart connected cognitive systems, technology trends, such as cloud computing, robotic process automation, distributed computation engines, machine learning, artificial intelligence and advance materials, can provide new market opportunities for the C-suite to explore. It is important to comprehend the essence of cloud, big data analytics and cognitive computing so that they do not pose an existential threat (if ignored) to the early stages of development.
The CDO’s mission today differs vastly from data managers of the past. The CDOs are asked to step out of their comfort zone with operational data and step into business leadership roles with full execution responsibilities to monetize the data locked inside the operational silos. Unlike past decades, the economy and capital allocation schemes attach more value to insight, derived intelligence and technology intermediation than the process itself. An example being ‘Airbnb’, the largest accommodation provider in the world with no real need for owning real-estate, is fully being managed in a virtual data-based environment.
CDO as an internal venture capitalist source in a data economy
In today’s digital economy, innovation with data is a primary directive due to real-time demand for deeply personalized customer experience and insight. The CDO must not only be concerned with identifying, building and governing the value creation of data pipelines, but also must understand the underpinning of cloud, big data, artificial intelligence (AI) and machine learning to be able to innovate with data and flourish.
The CDO almost acts as an internal venture capitalist (VC) by allocating capital to innovative data projects with obvious return-on-investment (ROI), while providing a data strategy that aligns with the board of directors’ vision of an organization’s competitive advantage going forward.
The data strategy and capital allocation becomes a practitioner’s document that requires periodic grooming and continuous input from the board, stakeholders and the CIO/CTO. The CDO as a VC must not only take into account the long-term corporate objectives, but also guard against traditional capital allocation schemes that equate a product strategy to a successful execution and delivery.
CDO as an internal regulator and risk manager
The evolving landscape of regulation in both breadth and depth combined with the given reality of a multi-jurisdiction global firm attributes to an ever evolving CDO role.
“The CDO’s complete apprehension and attention to regulatory nuances is of great importance to the success of the organization”
The CDO duties depend on l, regulatory expertise and technology working in tandem. CDOs should be able to provide executive level regulatory guidance and oversight throughout any data-driven project. For example, in central counter party clearing firms or the back-offices of financial institutions with an international reach, a CDO must be fully versed in multiple regulatory frameworks such as GDPR, PFMI, Reg. SCI, Dodd Frank, BCBS 239, CCAR, COBIT5 and NIST to name a few. The CDO’s complete apprehension and attention to regulatory nuances is of great importance to the success of the organization.
CDO as a technology evangelist, general advocate and the voice of the data
For those that have seen multiple technology cycles starting from mainframe to Hadoop to Spark to GPU computing to tensor flow and AI, this new era, which is being shaped by multiple technological and sociological trends, can seem fundamentally different.
While the new trends in machine learning, artificial intelligence fueled by cloud and resilient distributed computational engines are familiar to an experienced data executive, many C-Level executives and boards of directors require guidance and executive level conversations to fully embrace the new data-driven economy and reaffirm both opportunistic and long-term capital commitment needed to transform the monolithic and human drive processes to a machine-driven paradigm.
The senior IT executives who can embrace the new computing trends centered around transforming data into actionable insight in real-time will be able to provide the organization with a salient data strategy and an actionable road map that will guarantee competitiveness in a Darwinian moment in time.
Data agility and real-time data requires fast culture
As we embrace the age of big data and real-time analytics, fast-data emerges as a must-have requirement for new systems that use smart data pipelines to transform raw data into insights. To operationalize data agility and data at the speed of initial conception, the CDO needs to plant the seeds of an agile and fast culture while emphasizing absolute integrity and transparency to stay true to the spirit of industry-specific regulations. The shared-data-services concept can only be realized if there is a fast and agile culture that can turn around data request at the speed of thought, rather than traditionally prescribed corporate cycles.
In order to thrive, the CDO’s organization must fully embrace data agility, API economy, fast delivery cycles, data wrangling over data integration, customer orientation and a culture of change while moving away from the hierarchical project structures with multiple hand-offs which lead to ‘wastage’ and lengthened delivery cycles.
Data skill sets are different than traditional IT skill sets
The CDO is fully responsible for providing an environment to hire and develop the best data talent with a bias-for-action in a mixed-workforce environment. The new talent is not only motivated by traditional compensation regimes, but also company culture, social standing, and style of management. The ability to manage a multi- generational labor force must take center stage in a CDO’s skillset. While millennials tend to learn and thrive by ‘google-ing’, viewing YouTube technical tutorials and then iterating toward a solution without the need for micro-management, experienced managers are also essential to the success of an organization. In the new data-driven economy, the data architecture, data wrangling, data engineering and data science take a frontseat and can no longer be pushed into an operational black hole without a substantial penalty.
In conclusion, the role of the CDO was created to help C-Level executives realize the benefits of a fast-culture data-driven organization while mitigating the existential threat to the organization being left out of the digital economy and the upcoming cognitive revolution. The CDO role will continue to evolve as the firm’s entry into the brave new world of connected intelligent systems evolves. If the last five years have been any indication of the change, the three monumental trends of big data, cloud, automation and cognitive or AI-based systems will build upon each other and accelerate even more rapidly.
This is an exciting time for many companies and CDOs will play an integral role in building the organization’s footprint at the dawn of the fourth industrial revolution and connected intelligent systems, as described by Professor Klaus Schwab, founder and executive chairman of the World Economic Forum.