Data use continues to drive business across industries, shifting chief data officer responsibilities from a niche role for specialized industries such as finance into one every organization must consider.
The shift 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.
In the early days, CDOs helped reduce the data infrastructure management workload for the IT department. The CDO now increasingly finds ways for data to streamline the business and pursue new opportunities. The following 10 CDO trends are shaping how the role is evolving.
New CDOs define the future of the role
Data is everywhere, and business leaders increasingly acknowledge its critical importance. Only 21% of companies have a CDO, yet two-thirds of companies are talking more about data now than they did five years ago, according to PwC research.
A good CDO can influence and advise companies about how to talk about data, how to gather the right data and how frequently, and how to do so for their benefit, said Dan Priest, cloud and digital leader at PwC.
Sixty percent of CDOs are now members of the C-Suite, with oversight of enterprise-wide data, according to PwC research. This suggests that boards and CEOs are beginning to make a single executive accountable for data success and accountability.
"Without a map to reference, CDOs hired this year will most likely be the first of their company to hold the title and ultimately define the future of the role," Priest said.
High inflation is the death knell for big splashy data initiatives that take years to prove out. Inflation is the top trend shaping the role in 2022, said Matthew Halliday, co-founder and executive vice president of product at Incorta, an operational analytics platform. CDOs should consider how to quickly deliver stand-up solutions and real, tangible business outcomes while rooting out inefficiencies.
The best strategy is to take a small step forward, show value and repeat. CDOs should focus on projects that directly impact the bottom line and can prove value quickly and at every step, Halliday said. More speculative projects may need to go to the back burner for the time being.
Linking data and analytics to business outcomes
Expect more CDOs to look for ways to link data and analytics to prioritized, measured business outcomes, said Todd Blaschka, chief operating officer at TigerGraph, a graph database platform. As part of this process, CDOs should extend their reach beyond data and analytics technical capability to be able to look at data stored across the organization. Next, they may need to attach data initiatives to monetization strategies.
A great example is customer modeling. Chief data officers can develop new AI applications that examine the customer experience firsthand to look for ways that improve customer retention and drive more revenue.
CDOs may need to rethink cybersecurity in response to the growth of the data sources and volume of data, said Christopher Scheefer, vice president of intelligent industry at Capgemini Americas. These new and nontraditional data streams require additional methods of securing and managing access to data.
"The importance of cybersecurity in a pervasively connected world is a trend many CDOs cannot ignore due to the growing threats of IP infringement, regulatory risks and exposure to a potentially damaging event," Scheefer said.
Rethinking and reimagining cybersecurity is no small feat. The level of complexity of integrating connected products and operations into the business presents an incredible amount of risk. Establishing proper governance, tools and working with cybersecurity leadership is critical.
It is the CDO's job to ensure the business does not constrain itself, limiting external connections and services that could bring competitive advantage and paths to growth, Scheefer said.
CDO transition to new roles
Many enterprises are considering transitioning the CDO into more expansive roles such as chief data monetization officer or chief data and analytics officer, said Peggy Tsai, CDO at BigID, a data intelligence platform.
As an organization matures its data management strategy, there is less need for a CDO to establish the organization's data strategy. The centralized data responsibilities are delegated across the organization's technology, operations, finance, risk and business teams.
"The centralization function of data becomes unnecessary if all C-suite executives have embedded data responsibilities," Tsai said.
In addition, the chief data officer is put in a more pivotal role that focuses on a hybrid of analytical, engineering, product management and monetization responsibilities.
CDOs playing offense vs. defense
More CDOs are playing offensively, said Tomas Kratky, founder and CEO of Manta, a metadata management company. This means a bigger focus on easy-to-measure and verifiable economic results.
As organizations rush into the big data world to collect everything, trust in data is becoming lost along the way, said Ajay Sabhlok, chief information officer and chief data officer at Rubrik. The CDO is at the forefront of addressing issues with the data pipeline process and finding innovative ways for their organizations to use data.
"We must finally accept that no technology alone can solve our fundamental issues around data meaning, data semantics and data quality," Sabhlok said. "The culture of data products will boost data-driven creativity and innovation."
In contrast, defense is mostly about risk, compliance and basic governance. CDOs should be actively looking for use cases where they combine available data with AI and machine learning to offer a great data product. Chief data officers should consider investing into visibility and observability, particularly in the design and development phase, to ensure data quality and ethical use.
"We have testing and basic monitoring, but we must find a way to truly prevent incidents and data issues from happening," Sabhlok said. "With real visibility, we are also better suited to deal with data privacy expectations and ensure that our data is used in an ethical way."
Chief data officers typically have a good business and technical understanding of what must be done to play offense well, Kratky said. However, the shortage of data engineering talent makes it difficult.
Stress data literacy
More CDOs are encouraging and leading data literacy initiatives, said Caroline Carruthers, CEO of Carruthers and Jackson, a data consultancy. They must ensure the whole workforce is data literate, from the IT team providing the technology aspect to the customer support doing data entry.
The challenge for this CDO trend may be convincing all staff to commit the time and effort needed to become data literate, especially those who are starting from a position of very little data understanding.
Chief data officers need to provide real-world benefits to convince the workforce that becoming data literate is worthwhile. The best way to do this is through tailored, personalized training for each employee, at all levels, to ensure a good standard of data literacy across the board.
"This will ensure that organizations are making the most out of their data at every level," Carruthers said.
Demonstrate the value of data
More CDOs will develop programs to increase awareness about the value of data, said Carruthers.
"Currently, organizations are hesitant to invest in data because there is a lack of understanding about the value it can deliver," she said.
CDOs must illustrate the benefits that data provides outside of the fiscal value. To overcome this, CDOs should create a common language that organizations can use when discussing data to make the benefits more understandable for all colleagues. This allows CDOs to provide the correct value model to illustrate the importance of data within an organization.
Improve data sharing
CDOs are looking at ways to improve data sharing capabilities, said Maarten Masschelein, CEO and co-founder of Soda. At the same time, CDOs must also be aware of the technical challenges posed by handling personal data, questions about how to make data accessible in a secure way and how to ensure reliable, high-quality data flows between these teams.
As part of this process, CDOs need to invest both time and resources into creating robust data-sharing agreements to help streamline this process.
Many enterprises have built the infrastructure for obtaining and managing data. The final CDO trend is a focus on driving growth in 2022, said Jonah Ellin, chief product officer at 1010data, a retail data analytics firm.
"CDOs are now becoming accountable for identifying growth opportunities and answering the question of how to make it happen backed by data," Ellin said.
One challenge is figuring out how to use data science to identify opportunities with sufficient transparency and detail to convince the organization to act. Chief data officers also need to consider how they can de-risk decisions for everyday users.
One strategy is to identify ways to embed complex new data science models directly within the user interface of existing business apps. These must surface predictions and recommendations that allow users to explore the underlying reasons for the findings.