Written by Antonio Pita Lozano, Operations & Solutions Director at LUCA Consulting Analytics. Head of Big Data Science
Data economy, Big Data, Machine Learning, Artificial Intelligence or Internet of Things are some of the topics that are increasingly featured on the steering committee. But not only do these words appear in top management circles, but also with new figures. This is the case of the Chief Data Officer, a newly created profile in many companies.
The Chief Data Officer (CDO) is responsible for the data of a company at the highest level, both from a technological and business point of view, including security. They help with managing the data as a corporate asset; among its functions is the strategy for data exploitation and data governance; that is, defining security policies in the management and storage of data, privacy policies, as well as keeping up with the latest developments in regulatory issues that are set by the country, or in this case, the European Union.
The versatility of the CDO is opening a debate on the role that they should occupy within the organizational structure of the company. Theoretically, all companies should have a CDO since nowadays all companies use data, but it is not mandatory to have this figure at regulatory level. In SMEs this figure does not usually exist and falls to the business director or IT director. In contrast, all large organizations already have a CDO.
For those companies that have decided to incorporate the role of the CDO, there are various currents about the position it should hold within the organization. In some cases the profile of the CDO is ICT, in those cases the focus is on the processes and the quality of the data. In other companies, the CDO has a business profile, in these cases the attention goes to use cases and application of data. But, where is the best option to place the Chief Data Officer (CDO) in the organizational structure of the company?
We should start from the basis that the transformation of companies is horizontal as it affects all business units and where data is the most valuable asset in the evolution of any business model, the current IT-business binomial must end and we must accommodate to the trinomial business-science-technology, with the data as the basis of knowledge. Thus, the profile of the CDO must be hybrid: technological, business and with regulatory knowledge, a profile that is very versatile at business level. That is why the CDO is usually chosen among the profiles that already work within the company, given the depth of knowledge of the business that they should have.
The Chief Data Officer (CDO): the new bridge between IT and business
The CDO must act as the bridge between business and technology. Regardless of the ‘background’ of the CDO, its role is always to be the guarantor of the unique truth of the data, ensuring that there is no inconsistency in this regard. For this, it is usual for the CDO to have a technical team and a functional team that knows the business.
Within its team, the Data Steward is key, responsible for implementing all the policies promoted by the CDO in each of the company’s organizational units. In addition, the CDO must have an expert team in advanced analytics and an Analytical Center of Excellence to extract knowledge from the data and make it available to the entire firm.
The CDO has become the person in charge of the data governance of the company, and they must act as a bridge between business and technology. They should decide what data is used, when it is used and for what purpose, validate the technologies used, to assure and agree on the traceability of the data to be aware of any transformation suffered and all the users that make use of them, as well as the business application that has the use of data.
Gradually, this profile is gaining weight within the organization and in some cases they are already part of the Board of Directors, but without any doubt the capacity of the CDO as a ‘translator’ between the business and technology areas places him in a global position with Direct line of reporting to the CEO.