Published on 11/14/2016 | Market Sizing
Today’s growing data complexity, with such things as IOT, Big Data and increased regulation, is forcing a more business-led, business relevant data governance discipline. Change is never easy, but I would suggest if there was ever a time to grab the bull by the horns, that time has come. How ready is your company to meet the challenge?
With big data no longer just a passing fancy, organizations are addressing next-level challenges and asking, "How do we organize for big data and what will it take to get there?"
The ability to effectively and efficiently manage the vast and disparate array of corporate, customer and other business information that drives today’s largest organizations is rapidly emerging as a critical objective for the leadership of these firms, regardless of their respective industries.
An essential part of that shift is the requirement to understand and leverage information as an asset across the organization. Information is the DNA that catalyzes the actions and reactions of these organizations to the many opportunities and demands that confront leadership teams on a regular basis. It shouldn’t matter whether driven by market, customer, regulatory reporting, risk management, shareholder value or other considerations. While all are important in their own right, the need to embrace data governance as a strategic initiative can be the difference between the growth of an organization’s brand and performance if properly managed, or choke the life out of the business if its value as a strategic corporate asset is under appreciated or ignored.
In harnessing data for business outcomes, data leaders must understand the flood of data in multiple formats. Information has been available in disparate repositories for decades, but in today's business environment organizations face new demands to access and use data across these repositories. This challenge is more daunting in areas where risk management and regulatory compliance are a necessity, data governance is no longer a choice, it is a requirement. Regulators demand visible insights into risks and transparent audit trails that demonstrate compliance. Failing an external audit may spell disaster, both in financial terms and loss of reputation. An organization must know, at all times, what is happening to its data and how the data is moving and morphing from its inception to every destination.
Understanding that data is an enterprise asset forming the foundation of the digital business, a number of key issues must be addressed. This requires an executive level change agent; in most cases this individual is called the Chief Data Officer. One empowered to drive a successful transition that can deal with the rise of the IoT, the continued onslaught of big data, along with increasing regulation. These increased challenges all have technology, management and practice implications. While organizations have become more aware that poor data quality, is the primary cause of their inability to optimize the performance of people, processes, manage risk and reduce costs.
Today most companies realize that enterprise information is one of their most strategic corporate assets. Most also agree that they lack the focus, skills, competency and leadership to manage this strategic asset as effectively and efficiently as they would like. The speed of change seems to be the constant, and digital platforms and programs (big data, IoT, data analytics, social media, mobility, and cloud) are changing businesses' strategies and operations faster than anything we experienced to date. Those in Chief Data Officer roles have the challenge of keeping businesses adapting at the quick pace of change and innovation while ensuring the business and infrastructure can keep up.
Compliance and regulatory initiatives only add to the challenge, especially those with legacy information management infrastructures still in place. Failure to meet compliance and regulatory requirements may result in fines, increased capital reserves, reduced borrowing power, lower shareholder value and other equally dramatic consequences for the business. Complete and accurate information is mandatory for effective financial reporting, risk management, forecasting of future business activity, product pricing and similar core business functions, all of which directly impact the stock price of the firm. Information discrepancies and uncertainties also put at risk executive management and board members, who often are asked to certify the accuracy of filings and other representations being made on behalf of the company. Effective information management is no longer optional.
Knowing that information is the lifeblood of the Business, the need to proactively manage information is a must. To do so, they likely need to reorganize itself and reprioritize its objectives. A dedicated enterprise steward, owner and stakeholder is needed to drive needed information management changes across the company. The Board of Directors and its C-Suite reports all require a key partner to drive enterprise information management as a strategic initiative. The Chief Data Officer is the steward, owner and stakeholder of this enterprise mandate. The CDO is the catalyst for this transformation to an information centric enterprise.
However, CDOs are confronting a lot of fear today as they work to drive new initiatives around IoT, mobile, social, big data and cloud technology. With the global economy in flux and the political climate unsure, businesses are becoming more risk and change averse. There are many who suggest the greatest obstacle to assure success, is the fear of change by the existing C-level team.
In order to calm fears and gain support, CDOs will need to help businesses and leaders understand the bottom-line value of their digital initiatives. Rational business arguments and strong results will be key to helping businesses overcome fear and embrace digital.
As I have discussed in a number of my blogs I suggest the CDO needs to be a change agent. As change agents and business leaders, CDOs also have to have empathy for what businesses and people are going through. Digital transformation is disruptive. That's why "disruption" is the word we hear everywhere. To ensure digital efforts succeed, CDOs need to understand how much change it puts upon the business and its employees and help them manage the challenge. Now that we understand the challenges facing the CDO, I suggest there is a second change agent that must be added to the C-level team. The other CDO.
The digital revolution is moving at light speed and creating massive disruptions and transformations in industry after industry. For this reason, a second CDO position is gaining traction. The Chief Digital Officer must deal with everything digital. Already, more than a third of the entire world population owns a smartphone. A startling fact, more new data is created daily than existed in the world at the end of 2013. Their main object is to use online and mobile interaction in hopes of creating the most meaningful customer experience, and to fully transform the employee experience and the way companies deliver their products and services. Some refer to this as the catalyst of the Internet of Things. Companies in virtually every industry now understand just how much the digitization revolution is transforming the competitive landscape, and are preparing to participate in this brave new world, not just in their interactions with customers, but internally as well. Indeed, the demands of digitization will ultimately force companies to transform virtually every aspect of their business.
The Chief Digital Office may have an even more daunting task then the better known Chief Data Officer position. They must lead the way off transforming companies to the digital age, overseeing the transition of operations, sales and marketing, systems, and production. They must lead the charge and be a change agent of transforming the whole enterprises internal culture and in some instances the company’s products and services themselves. It would appear the odds are stacked against them from the start. In almost all cases the CDO role has just begun to come into existence with less than 6% of the F2000 having filled this role as of the end of 1st quarter 2016, This executive has the dual task of developing both an all-inclusive digital experience for customers and the internal capabilities needed to support that effort, while simultaneously identifying and managing the considerable investment required.
The rise of digitization is bringing about a singular shift in how companies operate and the technologies they use to interact with customers, partners, and suppliers. Until recently, they struggled to take a truly integrated, synergistic approach to the relationship between technology and the business. Now, however, all kinds new capabilities, from big data to social networking to advanced mobility, are coming together and driving the need for every company to prepare for the digital future. In both cases, these two strategic positions are no longer a nice to have. It’s becoming a requirement to ensure your company remains a leader in your industry.
Yet both CDOs have a difficult road in front of them. From influencing entrenched company cultures, keeping top management support, and balance the creation of new strategies with the inevitable operational issues involved in a full digital transformation, all while short-term financial goals consume the attention and activities of many employees.
Success will be dependent on numerous things outside of their direct control. They must embrace the role of change agents, be adaptable, focus on both short and long term business goals while ensuring organizational and cultural changes occur as needed.
Assuming we embrace that digital transformation isn’t an end goal; it’s a continuous journey. Then we will keep learning about the ever changing relationship between digital technology and customer behavior. This continuous insight will allow us to be an industry leader and not just a follower.
This article was originally posted on LinkedIn.