Why CIOs Have A Big Stake In Data Success

AI (Artificial Intelligence) concept. getty I was recently thumbing through a new book that I was reading, titled The Quiet Americans by author Scott Anderson, about the origins of the U.S. Central Intelligence Agency (CIA). It was then that I came across an interesting item.

Source: Why CIOs Have A Big Stake In Data Success

Anderson noted that the original title of what is now known as the CIA director was once referred to as the “Coordinator of Information.” How quaint a title, and perhaps ironic, given the trajectory and elevated status that data has attained in recent decades.

This also brought to mind a refrain which I heard frequently a decade ago. but hear less often these days. Namely, why do we need a Chief Data Officer if we already have a Chief Information Officer (CIO)? The implication of course is why would be need a head of data if we already have a head of information. Aren’t data and information synonymous? What is the distinction that warrants a new role to focus on data if information is already effectively managed? Why the need for yet another executive function? Hasn’t the c-suite already become overcrowded?

All of this of course harkens back to the emergence of the Chief Data Officer role, and its subsequent evolution over the course of the ensuing decade. Much of the discussion has focused on where this role should report in the management hierarchy. What should be the optimal organizational mandate and purview of responsibility? Accordingly, many organizations situated the CDO role within the Chief Information Officer function, where for many firms it remains. Perhaps the operating assumption is that data represents a subset or sub-function of information or information management. 

Advertisements

Not surprisingly, there continues to be a widespread lack of consensus about where the Chief Data Officer function should reside. Some organizations have concluded that the CDO should report to the Chief Financial Officer (CFO), while others have opted for having the function report to the Chief Digital Officer (also CDO), the Chief Operating Officer (COO), or even the Chief Marketing Officer (CMO). 

Decisions about the proper home for the Chief Data Officer function were driven in many organizations by a determination of whether the CDO would be focused on risk and compliance initiatives, often referred to as defensive activities, in contrast to revenue generation and business expansion activities, which are commonly considered to be offense-driven.

As the Chief Data Officer role has evolved and greater focus has been placed on activities and initiatives that support business growth and measurable business outcomes, many organizations have elevated the CDO role and purview, such that some organizations now recognize the CDO as a peer of, and partner to, the CIO.

Corporate leadership and reporting relationships have evolved over the course of the past decade as data has been elevated in organization importance. The role and responsibilities of the Chief Information Officer has also evolved with the emergence of the CDO function. It has been suggested by some observers that the traditional CIO role has become more focused on infrastructure, and less focused on information. Proponents of this view argue that it is more apt to describe the traditional CIO function as the Chief Information Technology Officer, due to the role this function plays in managing information technology (IT) functions for the corporation.

Questions of organizational responsibilities and organizational alignment raise an additional consideration. What is the optimal relationship between data and technology functions and line-of-business and market-facing functions? I sometimes relate the stories of my experience meeting with Fortune 1000 companies and learning about their deployment of robust new data or information technology capabilities, only to hear from business executives that they continue to face challenges when it comes to using and deriving value from data. These challenges may range from lack of confidence in data quality, continued difficulty in accessing data on a timely basis, or inability to receive data in a manner where it is easily comprehensible.

As companies strive to “democratize data” and improve data literacy within their organizations, executives must pay particular attention to the organizational and cultural challenges that too often stand in the way of maximizing value from investments in data capabilities and initiatives. How can companies optimally align their data capabilities and processes to derive business value? How can data, technology, and business executives successfully partner with one another to establish a basis of common understanding and corporate purpose?

Today, very few executives tell me that they view technology limitations as the principal barrier to becoming a data-driven organization. Rather, they describe ongoing challenges relating to organizational alignment, business collaboration, and common language and meaning. It is these cultural impediments that too often represent the greatest barriers to the success of data transformation efforts and data-driven initiatives. 

Advertisements

Change is never easy. Long-established mainstream companies are classically burdened with legacy systems and may maintain rich and deeply imbedded ways of doing business. Any hint of change initiatives, such as data transformation, migration to the Cloud, or adoption of modern data architecture approaches can be magnified by the core characteristic of data. It is as an asset that flows through and across organizational boundaries and divisions, often without clear ownership or assignable management responsibility, or incentive to share.

Inevitably, data represents a rich, and often unique and proprietary, business asset. It can be a source for innovation, and a competitive differentiator that distinguishes one firm from its neighbor. In the Age of Information, those firms that most effectively organize, manage, and leverage their data assets are operating at a distinct competitive advantage. 

Organizational ownership and responsibility for data may not reside within the purview of the Chief Information Officers for a growing number of organizations. Whichever organizational structures prevail in the years ahead, technology executives will continue to function as critical business partners who are essential to ensuring the success of data efforts.

Although CIO’s may no longer manage all aspects of corporate data programs, they will continue to have an enormous stake in the successful outcome of data transformation efforts, as data-driven companies shape the future of business in the years ahead.

Note: Randy Bean’s book, Fail Fast, Learn Faster: Lessons in Data-Driven Leadership in an Age of Disruption, Big Data, and AI, will be published on August 31, 2021 by Wiley.

Leave a Reply