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HP Software's community for IT leaders // January 2014
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What a Chief Data Officer does—and why you need one

Consultant and author Peter Aiken explains why enterprises need top-level data strategists—and why it shouldn’t be the CIO’s job.

In their book, The Case for the Chief Data Officer, Peter Aiken and co-author Michael Gorman say that today’s organizations must become more data-savvy, and that someone on the executive team needs to own the data strategy. Viewing data as a business’s most valuable asset, they say businesses need to recast the C-suite to include the CDO title. They also suggest that, in most cases, the responsibility hasn't worked when it has fallen on the shoulders of already burdened CIOs.


Peter Aiken
Aiken has studied data management for more than 30 years and has held leadership positions at and consulted with more than 50 organizations in 20 countries across various industries. In addition to being an associate professor of Information Systems at Virginia Commonwealth University and president of the Data Management Association International, Aiken puts his experience to work at Data Blueprint, where he is the consultancy’s founding director. In February 2013, Data Blueprint interviewed 114 IT management professionals and found that more than 60 percent said their organizations need, or are in the process of hiring, a CDO. We caught up with him to learn more about the emergence of the CDO.

Q: Gartner VP and Fellow Mark Raskino recently noted in his blog that the number of CDOs doubled from 2012 to 2013.  What's behind the drive to hire CDOs?
Peter Aiken: There’s a lot going on in this field. The Federal Reserve Bank has hired a chief data officer for the first time. President Obama mentioned data management in his 2012 State of the Union speech, as a career field that could put people to work. Not many people listen to the State of the Union, much less expect anything about data management in it—but by golly, he said it.

Q: According to Gartner, banking, government, and insurance are the top three industries for CDOs. Are highly regulated industries the realm from which the CDO emerged?
PA:
Over the past decade or so, the concept of data governance has become more popular. People are looking at this and saying, “OK, we have corporate governance—that makes sense. We have IT governance—that also makes good sense. Now we should extend that concept into data governance.” This is where the CDO concept sort of came from.

Q: Do enterprises need CDOs?
PA:
The first bit of pushback you get is, “Why do we need another chief?” I’m perfectly sympathetic to the fact that we have challenges at the C-level and nobody wants any more complexity, etc., etc. However, when you think about it, data is a resource for organizations that possesses some unique qualities, and those qualities dictate that data resources deserve the same level of professionalism as, say, HR or finance.

Q: Your book notes that data is an organization’s sole non-depreciating, durable, strategic asset. How can we not have a chief data officer?
PA:
At the moment, everybody’s in charge of managing data. The typical IT shop—nine of 10 manages data poorly. But the typical IT attitude toward data is, “Well, if they can sign on to the server, then our job is done.” Organizations can’t have assets managed in this fashion—think how irresponsible the CFO would be if anyone could write a check for anything at any time. And of course the business depends on IT to do this, because they say, “Hey, we have someone called the chief information officer, don’t they function the same way as a CFO does? Aren’t they ultimately in charge of the organizational resources—the information resources—for our organization?” And the answer is, unhappily, no.

Q: So it’s not so much a knowledge issue as a matter of focus and attention?
PA:
It’s been kind of difficult, because some of my best friends are CIOs. You don’t really want to put something out there that says they’re not doing their job. But when you think about it from a C-level perspective, managing data as an asset for the organization has got to be up there, particularly in today’s environment—looking at these Big Data techniques and things like that. If we’re going to do more with data, then something else has to give.

For the book, I took a sample of the advisory services—the Gartners, the Forresters of the world—and what they’ve been telling CIOs to pay attention to for the last five or six years. We ask CIOs to do a tremendous amount, and they do a great job with most of what they’re given. Everything from backup and recovery to moving into the cloud, adopting new technologies, embracing Agile development methods, the list goes on and on. But it is a zero-sum game, and if we ask them to do more with data, then something else has to get dropped. Most of them don’t have the capacity to do more.

Q: Are CDOs primarily data scientists?
PA:
No—and that’s another interesting development in this space. Data scientists lack the knowledge, skills, and abilities to become CDOs. And I think most of them probably don’t want to, either. But there is this idea that, “Whoa, we’re creating a new job category. Can’t a data scientist do this?” They walk in and basically become $200,000-a-year SQL monkeys. I love that data science is the sexiest career, that people are talking about it—but we need people with the knowledge, skills and abilities to influence the rest of the C-levels. They must be able to have those corner-office conversations.

Q: Where should the CDO be on the org chart?
PA: What I say to organizations is that you have other resource managers who report in at a certain level. If HR and manufacturing capability are other assets that are critical, the CDO should have a seat around the table with the CFO wherever that group meets. That’s a pretty high-level group. I’m arguing that, at this stage, most organizations will benefit because, to date, organizational data assets have not been well-emphasized. We now need to overcorrect.

The analogy here is that, around the turn of the 20th century, CEO stood for “chief electrification officer.” Clearly, we figured out how to use electricity to support business objectives. We no longer need to have a chief electrification officer. The CDO may be a transitory figure, but let’s overcorrect to make up for some past ills, and try to work it out so these officers are making people aware of the assets. Maybe the CIOs will look at this and say, “Hey, that is part of my job. I’m going to clear some other things [off my plate].” Maybe there’s a split between what the CIO does and a CTO function, and we’ll move the CTO function into doing some things that’ll be helpful [so that] the CIO can be cleared up to work more on data.

(Check out the Discover Performance blog post for an outtake from this conversation in which Aiken talks about higher education’s role in the way data is understood—and misunderstood.)

Peter Aiken is co-author of The Case for the Chief Data Officer, published by Morgan Kaufmann. For more on the evolution of IT leadership, visit Discover Performance at hp.com/go/discoverperformance.


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