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Big Data And The Emergence Of The Chief Data Officer
August 9, 2016 News

 

In his new book, Only Humans Need Apply: Winners and Losers in the Age of Smart Machines, Tom Davenport identifies Four Eras of Information, dating from 1975. Confirming the speed with which these eras are progressing, Davenport notes that the third and fourth Eras of Information have been spawned just within the last three years. These eras have been driven by the rise of Big Data.

The accelerating proliferation of data has fueled a growing prominence of data within the corporate enterprise. A growing majority of firms are seeking to leverage data as a critical business asset as they look to drive new sources of business value. According to a 2016 NewVantage Partners survey, 62.5% of firms report that they now have at least one Big Data initiative that has been implemented; nearly double the 31.4% of firms who reported the same result in 2013. As firms comes to recognize the central role that data can play in their success, a growing number of companies are investing in efforts to forge a data culture, enabled by data-driven decision making.

Prior to the emergence and popularization of Big Data over these past five years, data had been perceived as a secondary priority for most corporations. Often treated as a corporate backwater, responsibility for data was commonly relegated to the purview of data architects and analysts. These data proponents struggled to secure a seat at the executive table, as they attempted to make the case for data. One executive, who was an early believer in the potential business value of data, and champion of a more prominent role for data within the corporation, has lamented that “once we got into the room, it was still at the kid’s table”.

As Big Data fueled board and executive awareness in the potential power of data as a corporate asset, firms struggled with how best to organize around data — as an activity, a business function, and a capability. Proponents argued the case for how critical data is as a tool for competitive advantage. In response, a set of industry leading firms coalesced around the realization that a new organizational role was needed, the equivalent of a ‘data czar’. This new position has come to be known as the Chief Data Officer (CDO).

The first corporate Chief Data Officers arose as a direct consequence of the financial crisis of 2008-2009. The initial impetus driving the appointment of the Chief Data Officer was in response to increased regulatory and compliance reporting demands. This was particularly true in banking and financial services, where new oversight and regulatory requirements necessitated greater scrutiny of data quality, data accuracy, data transparency, data privacy, and data reporting. There were material consequences to be paid for not “getting the data right.” Financial services CDOs were mandated with managing the regulators, ensuring reliable data quality and transparency, and making sure the house was in order and on a firm footing from a data and financial reporting perspective. The role of the first generation Chief Data Officer was to play defense. But, that was just the start.

 

 This article was originally published on www.forbes.com and can be viewed in full

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