Over the past decade, chief data officers (CDOs) have been increasingly recognized for the value they bring to an enterprise. In fact, 65% of companies now have a CDO, a major increase from 12% in 2012. CDOs today are responsible for all of an organization’s data strategies, from data management to governance to privacy and analytics. As more enterprises rely on data for decision making — one recent study finds 77% of US companies are leveraging some form of business analytics — CDOs are more responsible for monetizing their companies’ data.
However, the strategies CDOs rely on to strengthen analytics, if implemented incorrectly, can create unexpected costs and slow down decision making. To avoid these pitfalls, CDOs and other IT decision makers should consider the following five practices to get more value out of their data.
“Don’t put the cart in front of the horse”
It’s an old saying, but it applies to data analytics. To successfully monetize a data analytics strategy, CDOs should know the business use cases of the strategy before implementing anything new. This is important for two reasons. First, data strategies should be laid foundationally, from the ground up, with due consideration to how they will impact and interact with different verticals of an enterprise. Say a company wants to create a program to turn customers into lead generators, but doesn’t implement the same strategy across both the customer and sales teams. This creates a bottleneck that costs both time and money.
Second, cutting-edge technology — like machine learning and artificial intelligence — may seem like an immediate solution to a problem or new means to expedite the analytics process for growth. However, if a CDO introduces the technology without pairing it to a specific use case, the new technology could turn into a loss on investment. So before adopting the latest and greatest, CDOs should know exactly what they’re getting themselves into.
Protect data as your top business asset
Data doesn’t have much in common with traditional enterprise assets. For example, it’s harder to gauge the value of vast quantities of data than it is for a company-owned warehouse. However, like physical property, if data isn’t well protected and managed, it could turn into a loss. Consider the recent rise of ransomware attacks — in 2020 companies paid an estimated $412 million in ransom. Data’s mission-critical value is being directly exploited by malicious actors.
To avoid paying large ransoms or costly data leaks, CDOs should implement zero-trust data management strategies for built-in protection. With zero-trust data management, no one is trustworthy: no user, no application, no device. Successful data analytics strategies, especially in larger enterprises, may require data to be handled by multiple teams and applications. Zero-trust data management strategies protect data from corruption, even when it’s being used across multiple verticals. This way CDOs can be assured their asset doesn’t become a loss.
Don’t let data governance be an afterthought
While often overlooked, data governance is another essential part of maintaining data as an asset; in fact, it’s fundamental to the process. Without proper governance infrastructure in place, data teams might waste hours of time locating and organizing the data they’ve collected before they’re able to leverage it for decision making. Also, unorganized data can lead to inaccurate results. Bad business intelligence could negatively impact anything from a go-to-market strategy to a new ad campaign. To keep their fellow executives armed with the best information, CDOs should consider the full scope of the data governance required to successfully implement a new analytics strategy.
The most successful strategies enable a uniform data language across the entire enterprise. By implementing master data management strategies and a single source of truth analytics repository (or a data warehouse), CDOs ensure the whole of the business is leveraging the same information. And having standardized KPIs, such as logo counts, can enable business leaders to achieve and act on consistent insights to drive the bottom line.
However, when establishing a governance practice, CDOs should still map back to the business use case defining their analytics strategy. This ensures their governance infrastructure, whether it’s a new dedicated governance team or a data warehouse, is designed with the end results of the analytics strategy in mind.
Prioritize privacy planning
In the US, three states introduced data privacy laws in the past year. While the US doesn’t have a single law governing its companies the way GDPR does in the EU, trends suggest it won’t be long before most companies observe some form of compliance law. This is a good thing, if companies are prepared for it.
Currently, only 21% of consumers trust established global brands to keep their information secure. So CDOs adopting new analytics strategies without accounting for privacy regulations risk not only legal fines if they’re out of compliance, but also brand trust. To ensure their companies remain compliant, CDOs should bake privacy considerations into every part of their analytics strategies. Sensitive information should be accounted for and team members who don’t need access to it to do their work shouldn’t have it. Prioritizing privacy from the early days of strategy planning keeps data an asset and prevents it from turning into a liability.
View IT as a business catalyst
Lastly, CDOs and other executives looking to impact growth in their respective companies should begin to view IT as a business catalyst. While CDOs and other IT leaders traditionally held positions siloed away from the decisions directly related to revenue and growth, the new and ever-increasing reliance on data means those days are long gone. Successful companies and their CDOs will connect their business analytics directly into every fundamental facet of the enterprise — from sales to marketing to finances.
While this shift in roles doesn’t fall solely on the CDO, it is up to CDOs, CIOs, CISOs, and other IT leaders to take a 360-degree view of the business. Going forward, the most successful CDOs and the successful strategies they implement will heavily rely on their ability to account for business input, the latest tech trends, and feedback from customers and partners simultaneously. It may present initial challenges, but factoring IT in business decisions will empower CDOs to get larger returns on their data investments.