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10 chief data officer trends that are reshaping the role

The chief data officer role is appearing in more industries and changing in responsibilities. Experts talk about the ways the position is evolving across enterprises.

The chief data officer role is still one of the newest C-suite titles, but it's been around for over 15 years. Over that time, the role has grown from being a novel position in a few specialized areas, such as banking and finance, to a mainstay in a wide variety of fields. This reflects a growing recognition across industries that data is valuable and that the CDO can help drive data strategy and build a data-driven culture to support this.

In the early days, CDOs helped reduce the workload from the IT department in managing the data infrastructure. More and more, the CDO plays a role in finding ways to use data to streamline the business and pursue new opportunities that use data. The CDO also needs to balance these opportunities against the liabilities of data breaches and new privacy requirements like GDPR and the California Consumer Privacy Act (CCPA).

Here are 10 chief data officer trends experts see evolving the role.

1. Navigating a changing a situation

With impact of COVID-19, every business needs to adapt to stay alive and continue to profit. One of the top chief data officer trends over the coming year will be navigating rapidly changing business realities. All existing data management projects should be reconsidered in the wake of the pandemic.

"CDOs that were planning to do nothing but a data lake project for the rest of 2020 are going to have a rude awakening -- they'll quickly turn their team into a cost center that provides no value to the business," said Arijit Sengupta, founder and CEO of Aible, an AI platform.

Sengupta said BI projects have focused on past trends that are no longer relevant. Meanwhile, older AI models need to be constantly recalibrated as the economy moves through different phases of reopening. CDOs will need to look toward augmented intelligence that involves a closer collaboration between people and AI to learn and react faster than competitors.

Changing chief data officer role
The CDO role continues to evolve as the use of data grows in organization.

2. Providing a better roadmap

The constantly changing situation around COVID-19 will also drive chief data officer trends around understanding the business environment.

"The best CDOs will be business thinkers who are able to provide organizational roadmaps that allow companies to compete in the new economy using data, AI, machine learning, information security and well-trained data scientists," said Gildas Bah, founder and CEO of American Business Data Science, a data science training program.

These roadmaps will require cultural change at the top of the organization along with a plan for upskilling the workforce and new ways to lead, work and collaborate virtually.

3. Applying analytics

CDOs need to find ways to bring different types of analytics into the enterprise to improve internal processes, create new products and prioritize the best current opportunities.

"To keep up with the growth of [the] digital economy and make forward-thinking business decisions, CDOs will rely on data analytics heavily in order to interpret data concepts more accurately and map data-driven insights with business priorities," said Ilia Sotnikov, vice president of product management at Netwrix, a data security tools provider. This will turn a CDO into a chief data analytics officer (CDAO).

4. More focus on automation

Some experts believe the CDO will morph into a role that is more focused on finding ways to automate various aspects of the business. 

John Bates, CEO of Eggplant, a software testing tools provider, said the CDO role is rapidly disappearing as it's too narrow in terms of responsibilities. To compete, organizations need C-level leadership to navigate an era where businesses must pivot to everything digital. This requires enterprises to either redirect CIOs to be more business-focused or create a new strategic role -- typically a chief automation officer (CAO) -- to be the catalyst for driving the roadmap for data and automation.

The CAO is responsible for accelerating the pace of transformation by establish a strategic vision for automation across the enterprise.

"Organizations that fail to invest in this unifying leadership role or rely only on a CDO run the risk of being left behind by Industry 4.0," Bates said.

5. Manage a data factory

The CDO was originally created as a way of focusing more executive attention outside the traditional purview of the CIO.

Chris Bergh, CEO of DataKitchen, a DataOps analytics maker, said a CDO trend is automating the data and operations pipeline in the same way DevOps modernized application development. He said data analytics resembles a manufacturing process where data continuously flows in from sources, undergoes transformation and powers analytics and machine learning applications. Bergh said the CDO role oversees this data pipeline, optimizing analytics creation and deployment and managing quality.

The challenge is that most data science and machine learning projects fail to deliver on their promise. As a result, the average tenure of a CDO is currently only about two and a half years. This situation will improve as CDOs learn to employ automation that reduces analytics cycle time and eliminates data and analytics errors.

"In the long run, CIOs will continue to manage enterprise-critical business applications, but CDOs will manage the data factory and provide the vision and leadership required to continuously improve the use of data to further an enterprise's mission," Bergh said.

6. From liability to opportunity

Kenneth Sanford, principal at Distill Data Science, a data science consultancy, said GDPR and CCPA accentuated the need for CDOs to focus on limiting the potential downsides of data. However, COVID-19 and the resulting economic pressure are driving CDOs to focus on the potential of using data opportunistically.

This could affect the qualities boards look for as they bring on new candidates. CDOs have primarily had legal backgrounds, due in part to many CEOs seeing data as a liability. Sanford said that this has been a mistake.

"Those with legal backgrounds lack meaningful training in working with and understanding data," Sanford said. To take advantage of the opportunistic aspects of data, CDOs should have a formal education in data analysis.

When business leaders truly understand the context data is created in, they see the potential to explain and predict outcomes that create business value, such as increasing customer satisfaction scores, reducing churn and more.

"These skills can be taught to business leaders, and it doesn't involve any sophisticated math or computer science or even a computer," Sanford said. "It requires curiosity and a desire to explain outcomes."

Analytics-first thinkers are opportunistic with data. Up-sell and cross-sell models are created by looking at what customers have purchased in the past and create look-alike customers for whom limited data exists. This often means collecting, storing and processing a lot of personally identifiable information (PII).

The legal-first CDO will be quick to limit or eliminate potential PII issues, whereas the opportunistic CDO will look for creative ways to use these data sets within the spirit of the applicable laws. Having a deep understanding of the methods of analytics is required for this.

Data is also the new asbestos. If organizations don't use data responsibly, there will continue to be data breaches that impact consumers, and there are longer-term impacts on overall enterprise value and business reputation.
Ameesh DivatiaCEO and co-founder, Baffle

7. Creating competitive differentiation

A few years ago, CDOs heavily focused on data governance and management of packaged analytics software.

"Now, they increasingly emphasize innovative data science pilots which could increase competitive differentiation, often in a company's product itself," said Aron Kuehnemann, vice president of Diffbot, a knowledge graph platform. He has seen more CDOs have data partnership teams, even in nontech companies.

More organizations are formalizing ways to license or partner around their company data sets. As they do, the market will coalesce around clearer value and pricing models for different data types. It's difficult to place a consistent dollar value on data in general.

"A great irony in a world where everyone talks about the 'value of data' is that most people don't know how much it's worth in terms of their ROI or how much they should pay for which types of data," Kuehnemann said.

As the buyers and sellers of data formalize their roles, the market will determine easier ways to value data, but it probably won't ever be as consistent as a software user licenses.

8. Ensuring visibility and awareness

New data governance regulations are driving CDOs to understand different types of data and their location.

"The CDO is best positioned to be the single point of responsibility for ensuring an organization fully understands the sources of its data, how it's handled, why it's handled and what boundaries and limitations exist," said Stephen Cavey, co-founder and chief evangelist of Ground Labs, a data discovery tools provider. Without this holistic view and central point of control, a business will struggle to maintain adequate control of existing and new data being collected and whether broader implications exist.

Today's CDO must be internally aware of data handling activities and aware of where the data comes from in terms of geography. They must become externally aware of data-centric laws in each market the organization operates and collects data from. Cavey said this is critical as organizations often only acknowledge and maintain awareness of laws where they have a presence, not necessarily laws related to all data sources collected.

9. Using data responsibly

CDOs must find ways to balance data opportunities with data liabilities.

"Data is also the new asbestos," said Ameesh Divatia, CEO and co-founder of Baffle, a data protection tools provider. "If organizations don't use data responsibly, there will continue to be data breaches that impact consumers, and there are longer-term impacts on overall enterprise value and business reputation."

GDPR and CCPA have created a need for CDOs to implement processes to determine what is PII in the mounds of data within an enterprise. They also need to train employees on privacy regulations and implement procedures for compliance with data privacy laws.

A CDO should be aware of -- and communicate -- any regulations relevant to that company and their customers' industries.

"The CDO should also be in lock-step with the chief privacy officer and the CISO to ensure a company's strong security posture," Divatia said.

10. Role expands into other verticals

Perhaps the most important of chief data officer trends Andi Mann, chief technology advocate at Splunk, a stream processing platform, expects to see is more enterprises hiring CDOs. Many businesses are finding new ways to make or save money by taking a more sophisticated approach to collecting, managing and analyzing data.

Organizations in the technology, finance and retail spaces generally utilize the data they have on hand to increase revenues and drive higher customer engagement. Mann said manufacturing, healthcare, the public sector and higher education have traditionally lacked the leadership to operationalize their data and have lost out on valuable business and growth opportunities.

"We expect to see more organizations across verticals adopt CDOs in the coming years, as organizations increasingly recognize the profound impact data can have, especially when integrated throughout every level of an organization," Mann said.

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