CDO: The Ned Stark of This Game of Thrones

It may sound like just another alphabet soup. But the CDO designation houses many conflicts, twists and turns. The question hangs in the air- are we approaching the terrible 9th episode here?

Step-brothers or Siamese twins. It’s hard to decide when you see a CIO and CDO sitting at the same table. Specially a table that has grown bigger after the advent of CHROs, CFOs, CISOs and CTOs.

When the CDO (Chief Data Officer) designation was coined, it was supposed to be the specialist hat for all things data. It made sense. Because enterprises had started noticing the real impact of buzzwords like Big Data, Analytics and digital transformation.

The hat took a lot of feathers. And then it started growing heavy. At other places it became frazzled. But surprisingly, gaining the colour of relevance and existential dilemma alike in the last two to three years. Where do CDOs stand today?

The Night’s Watch

If we look at the 2022 senior data and AI leadership survey from NewVantage Partners, we can see that 74 per cent of firms have a chief data officer or chief data and analytics officer, but leaders in charge of these initiatives aren’t sticking around. Looks like the average tenure of a CDO is merely 2 1/2 years. Put that against the 4 1/2 years for the average chief financial officer or chief information officer; and it’s clear why the relevance of a CDO can be a question-mark in some places.

The NewVantage survey also unravels many other threads here. Like only half of CDOs are able to drive innovation using data. Only 26 per cent of CDOs have been able to create a data-driven organization. What’s surprising is that as many as 25 per cent of CDOs have no single point of accountability for data within their organisation. That explains why just 40 per cent of respondents said the CDO role is successful and established within their organization.

“CDOs, CISOs and CIOs corroborate the growing trend of multi-specialisation in the modern world.” - Thomas George, President, CMR Research

Just consider how fragile the turnover factor is - about 43.2 per cent or organizations had two or more prior CDAOs with 56.8 per cent firms that have had 1 CDO/CDAO, 37.8 per cent firms with two to four CDO/CDAOs and 5.4 per cent firms that have had over five CDO/CDAOs. The survey surmised that organizations continue to struggle to reduce turnover, improve stability, and establish achievable expectations for the Chief Data and Analytics Officer (CDAO) function.

What also matters apart from accountability, effectiveness and role-clarity is the aspect of hierarchy. Another survey- the Federal Chief Data Officer Council (CDOC) 2022 survey points out that there have been changes in the role of CDO from 2021 to 2022. From 2021 to 2022, those who report to a COO have doubled from 10 per cent to 20 per cent. The percentage of CDOs reporting to a CIO has come down about 30 per cent to 20 per cent.

Consider how CDOs who met revenue-generation objectives and data monetization goals were more successful in their role than those who primarily focused on enablement projects, such as data governance. This came up in the Gartner seventh annual Chief Data Officer Survey. It showed that most CDOs engage with executive management and CIO, those that are high-performing in nature are significantly more likely to have projects with the CEO that focus on value outcomes. Those in the bracket of low performers have more projects with the CFO- it then becomes about costs and operational efficiency.

In some cases, the CDO role may be responsible for driving transformation work that is client/sales-centric and focused on data-driven strategies. In such cases, the CDO’s work can help in direct revenue generation and decreasing costs, making it a profit centre rather than a cost centre. - Mohammad Irshad Saifi, Director-IT & Digitisation, Shardul Amarchand Mangaldas & Co

When we scan the mandates of a CDO – they do have a tough torch to bear, the top three objectives of the highest performing CDOs, were improving decision-making capability (63 per cent), meeting revenue generation (49 per cent) and improving customer experience (49 per cent). And these are not easy goals to crack, specially when CDOs face issues like talent shortages (45 per cent), culture challenges to accept change (40 per cent) and lack of resources and funding (32 per cent) as barriers to the success of their D&A initiatives.

So are CDOs losing their steam, their parking spot in the board-room and their voice? Or can they co-exist with CIOs, CISOs and other CXOs?

The Three-Eyed Raven

With a seasoned insight into this space, Thomas George, Head, CMR Research helps us to go back to the brass-tacks about this question. Acuity and candour reflect strongly when he draws a parallel here with multi-specialty hospitals. “Earlier, everyone went to just one general physician. No one expected more. No one complained. But today, even a small part like knee can have intricate specialisations. This is the age of domain expertise. That’s what enterprises are following too.”

Mohammad Irshad Saifi, Director-IT & Digitisation, Shardul Amarchand Mangaldas & Co takes us back to the key reasons why the CDO role was created or required in organizations. This can be summed up in two words – digitalization and data. “In today’s world, all companies are impacted by digital technologies and need to embrace innovation. Companies that do not adopt this new way of doing business in the digital world may be left behind or become irrelevant in the future. Hence, many companies choose to focus on digital transformation and set up a new team to drive this.” That’s the digital transformation aspect. Then, there is the factor of a Data-driven approach.

“As we all know, data is the new oil, and some of the top companies in the world are leveraging the data they own. Organizations face an increasing volume of data with the rise of digital technologies, and a dedicated focus on using data to drive business outcomes, analysing and gaining insights from data, maximizing its value, and providing data governance is necessary.”

We do need CDOs, avers Bhoopendra Solanki, Chief Information Officer, Sakra World Hospital. “More so in this current age of Artificial Intelligence, Machine Learning and chat-bots etc. All these technologies depend heavily on data- and for keeping that foundation and developing those muscles, enterprises need CDOs.”

CDOs seem to have a huge void to fill. But what cannot be denied is that fact that CDOs in most places have been limited to, or have themselves hit a glass ceiling, ticking some boxes. Naveen Kamat, Executive Director, Data and AI Services, Kyndryl India observes that the CDO role gets viewed as more of a control function with responsibilities limited to ensuring a compliance/ regulatory posture from a data governance perspective. “However, CDOs are being challenged to drive or unlock value from data – not just first-party data but also to explore leveraging third-party data meaningfully.

“The situation will evolve for the better quickly, as organizations realize that data needs to be a first-class citizen while framing their digital transformation agenda. The CDO role is rapidly evolving to being a change-agent who enables data to be easily discoverable and made seamlessly accessible to the employees within the enterprise based on their roles.  The CDO is therefore helping data democratization within the enterprise truly come alive.”

Does the answer lie in co-existence of CDOs and CIOs? Can that even happen?

The answer is not a ‘yes’ or a ‘no’ but a ‘depends’. Saifi argues that few organizations face challenges when having separate CIO and CDO roles, such as defining their respective roles and responsibilities and ensuring their objectives are aligned. “In some cases, CIO and CDO may be working on the same project without knowing, resulting in duplicated efforts. Collaboration between the two and managing conflicts are also key areas of concern.”

Thomas George reminds us of the harsh truth again- that any place with power, can easily be vulnerable to a power-play. However, there are success stories of having separate CIO and CDO functions in the same organization, Saifi contends. “Such organizations have addressed the challenges highlighted above, enabled good collaborations, and avoided competitive scenarios by making them collaborative roles.”

In organizations where both CIO and CDO roles exist, CIOs typically handle responsibilities related to ERP, enterprise applications, business applications, integrations, cloud, infrastructure, data centres, network, end-user support, security operations, and work closely with cross-business functions and board members.

The White-Walkers

It’s time to accept that the CDO cannot be just another designation and a cost-centre anymore.  Kamat stresses that the role needs to drive data monetization agenda and align the organization’s data strategy with clearly stated business outcomes and imperatives.  “The CDO needs to be a part of the C-suite that is directly accountable to the business results of the organization with a scope to take bold steps like retiring or moving away from legacy systems, making major technology transformations happen and ensuring that the business processes and workflows are tightly integrated with the ‘data-driven enterprise’ agenda.  And as part of becoming a truly data-driven enterprise, the CDO needs to drive a data literacy campaign extending from the board room to the employees on the shop floor.”

In the future, large global companies may still require a global CDO at the enterprise level, while their regional or country-specific CIOs may play both CIO and CDO roles, Saifi reckons. “Companies with regional or country presence may look to have a dedicated CDO function, but it may eventually merge into the CIO role. SMEs may expect their CIOs to play both CIO and CDO roles. Other CXO roles, such as CFO and CEO, also have a stake in the organization’s data strategy. The CFO may be interested in the accuracy and reliability of financial data, while the CEO may be interested in using data to inform business decisions.”

Regardless of whether the CDO office is a cost centre or a profit centre, it does not necessarily have to be a bureaucratic burden for enterprises, he adds. “Instead, the CDO office can play a critical role in helping organizations leverage data to make better business decisions, improve operational efficiency, and drive innovation. Although implementing a CDO office may require some investment in terms of resources and infrastructure, the benefits of having a CDO office often outweigh the costs.”

The bottom-line is that having both CIO and CDO roles in an organization can bring many benefits, but it can also lead to some challenges. “Organizations must be mindful of these challenges and take steps to ensure that the CIO and CDO are working together effectively and efficiently to achieve the organization’s goals. Ultimately, the value of the CDO depends on how it is structured and implemented.” Warns Saifi.

CDOs should not be written off yet. They are still sitting at that table. What’s it gonna be – a game of musical chairs or the Game of Thrones or a Marvel universe of super-heroes?

By Pratima H

pratimah@cybermedia.co.in