C-suite changes

Tech hotshots: The rise of the chief data officer

As CIOs become overwhelmed by IT demands, chief data officers are stepping in to serve as a centralized point of data governance.

Chief Data Officer [CDO]

Wes Hunt is unambiguous about his objective as the first chief data officer at Nationwide Mutual Insurance: "Our goal," he says, "is to treat data as the asset it is and drive value from that."

Hunt is one of a growing number of CDOs operating in U.S. and globally who are carving out a new domain that focuses squarely on data governance and management. According to Hunt, other CDOs, consultants and analysts, the mission of the chief data officer is to bring order to the plethora of data sources within an organization, tap the multiple analytics opportunities that exist, and develop a strategic vision around those opportunities.

"Historically, the work of determining how data was gathered, stored, managed and destroyed was distributed among legal, HR, the CIO and business functions. Now emerges the chief data officer, who is the authority on all things data management and data governance," says Dorman Bazzell, the practice leader for Emerging Technologies and Advanced Solutions at Capgemini.

Because organizations up till now have typically divvied up data responsibilities, various business departments often wind up with their own collections of data with their own policies regarding retention and use. As a result, organizations often have a siloed approached to data governance, even if those collections of data have ended up together in an enterprise data warehouse.

The monumental task of trying to manage data in such a disparate environment means that enterprise leaders often can't deliver on their data's full value proposition, analysts say. To counter that situation, leading companies are creating the position of CDO.

"If you don't have a CDO, you've turned the kids loose on the playground of data, and they're going to do whatever they want," Bazzell says. "There is going to have to be a role that manages all of the use of that data." It's important to note, he says, that the CDO role emerged as a centralized point of data governance that isn't tied to technology, but is instead connected to business needs and concerns.

The role is far from a staple in the C-suite. In a 2014 report on the CDO position, Gartner estimated that just 17% of larger organizations would have a CDO by the end of the year. Moreover, Gartner data shows that right now 36% of CDO positions are in financial services -- not surprising, says Debra Logan, an analyst with the research firm, because that industry has some of the highest regulatory requirements for data. There is also a concentration of CDOs in healthcare, another heavily regulated industry. Government, with its huge appetite for data and a mandate to share it, also has a number of CDOs.

CDOs do exist in companies in other industries as well, and they reside in companies of all sizes. However, analysts say that not all organizations at this point need a CDO -- only those whose data needs and maturity level around data require it.

In those companies that have created the position, CDOs don't typically report to CEOs. Instead, they frequently report to the CIO, chief marketing officer or other business-line executive.

Whatever the chain of command, the role is reconfiguring the C-suite, observers say. Even as CDOs take on responsibilities once tasked to others and then pull them under their domain, they still must partner with other executives, including the CIO, to advance data initiatives. That might be an uncomfortable development for CIOs, but analysts and consultants say they'll simply have to adjust to the new executive paradigm -- or risk being relegated to keep-the-lights-on tasks when it comes to data strategy.

"Some CIOs will feel this is threatening to them, and others will feel like this is a huge help," says Dan DiFilippo, global and U.S. data and analytics leader for PricewaterhouseCoopers (PwC). "But we don't see that one detracts from the other. The CIO still has responsibility around technology delivery, enablement, keeping up with emerging trends and technologies being developed. The CDO has a different role that's focused on the data and making sure the data being used is appropriate, there's proper governance around it, that it's protected in the right way, and that it's being leveraged and even monetized."

wes hunt nationwide insurance chief data officer (CDO) Courtesy

Nationwide's Wes Hunt says his CDO position was created in response to the increasing importance of data-driven strategies within the insurance company.

Hunt, the Nationwide CDO, who was one of three executives to speak at the IBM Chief Data Officer Strategy Summit held last fall in Boston, says his position was carved out in response to the growing data-related demands on IT. He moved into the CDO role in November of 2013 after serving 11 years as the company's vice president of customer analytics.

Nationwide's CIO sponsored the creation of the CDO position within the insurance company in recognition of both the increasing importance of data-driven strategies as well as the need to support those technologically, Hunt explains. "The IT team had to get ahead of this," he says.

Hunt, who reports to the company's chief technology officer, says his responsibilities are in line with those generally associated with the CDO position: building governance for data and building capabilities around using data to the organization's benefit.

He and others emphasize that the role isn't -- and shouldn't be -- about implementing IT systems.

"Implementing tools does not [by itself] drive business value," says Ursula Cottone, the CDO at Cleveland-based KeyBank, also a panelist at the IBM event.

She says early on in her position she focused on modernizing the IT infrastructure required to support the KeyBank's data-related objectives, then focused on getting data governance up and running. But even while concentrating on those areas, Cottone says her endgame was always to ensure the availability of the right data for business units to use to gain insights that will produce value for the company. "It's about spending smart in order to help us drive revenue and manage risk," she says.

To help her do that, Cottone oversees a 25-member staff comprising professionals with backgrounds in analytics and project management as well as employees who previously held positions as operational and business analysts.

CDOs need business, IT acumen

Like Hunt, Cottone is the first CDO at her organization; she started in the position about two years ago after a two-and-a-half year stint as KeyBank's senior vice president of corporate bank-shared services. KeyBank's CIO and chief marketing officer partnered to sponsor the creation of the CDO position, which encompasses a range of responsibilities, from ensuring the data is protected to meeting regulatory requirements.

cottone ursula KeyBank chief data officer (CDO) Courtsey

KeyBank's Ursula Cottone says CDOs need a blend of business and technology skills and the ability to bridge the gap between the two. 

Given that joint sponsorship, it's not surprising that Cottone believes CDOs need both business and IT acumen. "They created this role knowing what was needed -- a blend between business and technology and the ability to bridge the gap," she says. She first reported into the CIO of shared services, then to the director of enterprise architecture, and now to the head of marketing and analytics. Although it took awhile to find a home for the position, she says the parameters of her role remained steady.

Eugene Kolker, CDO at Seattle Children's, a healthcare organization encompassing a hospital, a research institution and a non-profit foundation, has a similar take on his position and its place in the enterprise. Kolker, the third panelist at the IBM event, says his role is "to leverage data and analytics for strategic value."

To accomplish that goal, he says, CDOs need to understand the business side of their company as well as its technology division. They also need the support of both leaders; in his organization, the chief medical officer and the CIO serve as executive sponsors of the CDO role. Kolker, who has been in the position since its 2007 creation, came from research but holds degrees in computer science as well as applied math. He reports to both the president of research and the global CEO.

CIOs and CDOs, fighting the same battle

If talk of bridging gaps between technology and the business to drive value from data sounds familiar, that's because CIOs have been promoting the idea for years.

However, CIOs usually didn't have the authority to govern data, observes Gartner analyst Logan, and attempts to do so were often met with significant resistance from business unit heads, who in turn often didn't have a firm grasp on what data should be retained, how long it should be kept, and for what purposes.

"The CIOs have had this role, but it's become increasingly apparent over the last decade that CIOs don't own the data. It's the business's data. They generate it, use it, produce reports from it, and they should own it," Logan says.

As that data has become increasingly unwieldy and commanding a growing share of the CIO and other executives' attention, CDOs have emerged to take charge. "Some CIOs may see [the role] as a threat, but the overwhelming voice of CIOs in Gartner's population are happy to have it because they have someone to help them sort out data," Logan says. "I see these positions as peers, CIO and CDOs. They're fighting the same battle, and they're allies."

A CIO who faced business unit objections to moving data to the cloud, for instance, may find that a CDO can help champion such a move by untangling legitimate requirements from unjustified protests. And CDOs will be the ones who can track down retention requirements and determine a business unit's legitimate needs, which can then help CIOs formulate strategies on the infrastructure needed to support the data.

"The CIO will still tell CDOs the best way to implement initiatives," Logan sums up. "This is where CIOs end up being strategic."

For Seattle Children's Kolker, being a chief data officer is primarily about service to the organization. "You need to know the business and drive insight, but bottom line, it's all about people -- employees, doctors, nurses, patients," he says. "It's about making their lives easier by empowering them."

Copyright © 2015 IDG Communications, Inc.

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