Data transparency is the lifeblood of new information economy

Many companies have invested in the analytics infrastructure that helps turn data into a business asset. Now what? Gartner's Debra Logan offers insight.

Companies have spent decades building their analytics infrastructure; the investment is about to pay dividends for companies and further propel the information economy. "Once you build the infrastructure, then you can really start to work," said Debra Logan, a Gartner researcher.

Logan argues that companies are entering the "second half" of the information economy, where businesses will truly regard information as an asset and revenue producer.

"It's no longer a byproduct," she said in a webinar called Data and Analytics Leadership and Vision 2017. "It's the main object of the exercise." Software products require upfront effort from companies, but once created, they can be replicated and distributed at little to no cost.

To reap benefits in this new analytics era, companies will need to untangle data management from IT infrastructure management. In Logan's view, CIOs should continue to manage the infrastructure, but urge their companies to establish a high-ranking data manager position such as a chief data officer.

The importance of data transparency

Even after establishing an executive data management position, companies will have to make some big shifts in how they treat information, if they hope to capitalize on information, according to Logan. Although the idea of a data-driven business has been bandied about for years, Logan argues that companies haven't executed the concept completely. Companies may be making data-based decisions, but they often lack a key element -- data transparency.

In a nutshell, data transparency means no one gets to hold data hostage from the rest of the company, which can happen under the guise of data ownership. And no one gets to interrogate data behind closed doors, which can ensure the data says exactly what the analyst wants it to say.

Indeed, to achieve data transparency, companies will have to change how data is managed and used, Logan said. They'll need to shift from a "closed mindset" where control, information security and compliance are the main objectives, to an open one. Doing so will require a new strategy that can address questions like: "How do we share information without damaging ourselves, our brands, without allowing breaches to happen," she said.

Another big question? How do companies establish an ethical approach to data usage rather than one that checks all the current compliance boxes? "If we have to have a rule for every single thing we need to do with information, we're not going to be able to cope," she said. "We have to take more of an ethical stance than a rules-based stance."

The changes Logan calls for will need to come from the very top of the organization. Companies understand that money is an asset that has to be managed, as evidenced by the ubiquity and importance of the CFO role. The same should go for data, Logan said.

A chief data officer or a CDO-type role would create and oversee an overarching analytics vision and strategy for the company -- one that starts with an assessment of the company's current analytics roadmap, is tied closely to business strategy and makes data transparency a priority.


Historically, companies have done a poor job of looking after their data, possibly because CIOs and IT departments were evaluated based on things like uptime and not on things like data quality. The data chaos that ensued was never corrected because organizations incorrectly believed new technology would take care of the problem, Logan said.

"There was a belief that systems like SharePoint were going to solve information management problems, were going to solve taxonomy problems, were going to solve organization problems, were going to solve quality problems," she said. "And that just isn't true."

But if companies are going to compete on technomics, a term coined by MIT Sloan School of Management's Erik Brynjolfsson to describe the new economy of buying and selling software products, data can't be treated as a byproduct of a business process but as an asset, Logan said. And rather than saddling CIOs with the task of elevating data to asset status, Logan comes down firmly on the side of establishing a separate data management role.

"You've got a lot to do if you're a CIO," Logan said. "You've got to manage the infrastructure, you've got to manage the data center, you've got people doing application development, and so on." Why not divide the duties and together conquer the information economy?

"If you want something done, you have to make it someone's job," Logan said. "The people who are best qualified to do that are the people whose data it is, the people who generate the data, use the data -- they understand whether or not the data is correct."

Companies that have never looked at their data as a revenue source might want to take it slow, she said. Rather than developing a CDO role outright, she advises starting with a data management or a data governance council and working their way up to a chief data officer or a chief data officer-type role. And, she cautions, it will take thought to figure out how to monetize information assets.

"A lot of organizations are going to hire CDOs and a lot of them are going to fail because they don't really understand what the job is about," she said.

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