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How a CDO can help you get more for less


Published: 12 Jul 2023

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In a recent survey of over 3,000 Chief Data Officers, IBM have explored what it means to be a CDO, and the value that they can deliver for businesses. Here, we look at some of the key findings.

The Chief Data Officer role is one which has become significantly more prevalent in the last decade, and with data playing a pivotal part in the decision-making process in many organisations, the role of the CDO has grown in stature accordingly.

The IBM Institute for Business Value conducted its 2023 Chief Data Officer Study (the 27th survey of this nature) by interviewing thousands of CDOs from a range of organisations across the globe, including in-depth conversations with around 20 CDOs. To be a CDO, according to the survey, requires engagement across an incredibly broad range of topics including system architecture, cyber security, procurement, investment and, crucially, working closely with the finance function. It’s evidently a very challenging role at times, and as the survey notes, tenures of CDOs are rarely lasting beyond 2 years, due in part to a gap between the expectations of their C-suite colleagues, and the realities of what can be achieved with data in relatively short timeframes.

One of the key pivots for a CDO is to deliver value from data. In many organisations, data is seen as a cost to the business – it requires storage, management, protection – so often it is the role of the CDO to look at how data can be used to support and enhance revenue-generating activities, while still ensuring that the governance side of things is catered for. It is striking the balance of this ‘double vision’ that is so crucial in the CDO role.

CDOs that focus too much on data governance and the management of data in the organisation, are unlikely to be seen as an asset to the business. Conversely, CDOs that focus solely on revenue-generating priorities may rapidly come unstuck when the worst happens – which, for most large organisations, it inevitably will at some point. Over half of CDOs surveyed identified data security as the most critical responsibility, and yet over a third didn’t believe that their organisational data was sufficiently secure.

Looking at the value that CDOs can deliver, on average, investing just 2.32% of revenue in data management and strategy, can increase total revenue by around 1% - that’s not a bad return. But the best performing CDOs can deliver more than this – the key question is, how?

The Value Creator CDO

The IBM survey identifies a number of traits of ‘Value Creator’ CDOs that stand them apart from their peers. These include:

  • Empowerment – leading teams of data specialists (and indeed non-data specialists too) who feel able to take ownership of data. CDOs with empowered teams drive around 173% more revenue growth.
  • Direct reporting – leading CDOs are true members of the C-suite, reporting directly to the CEO and are given responsibility, accountability and trust.
  • Data lineage – to be a successful CDO, there is a need to establish a clear link between the data, and the value the business derives from it. ROI is often discussed in relation to spending on data, but unless the CDO can demonstrate how their work directly delivers ROI, their role is devalued. In turn, successful CDOs cited in the report ensure that to establish their credibility, they focus (at least initially) on activities where that ROI is clearly demonstrable.
  • Links to digital transformation – the successful delivery of value from data is closely aligned to wider digital transformation strategies in organisations. Treating data as an integral part of changes to business processes and digitalisation can help reduce the overall spend needed to achieve the desired outcomes.
  • Start small – it is no coincidence that the best CDOs are able to generate greater business value with proportionately less investment. This is often because, quite simply, they start with smaller ambitions, focusing on the purpose and aim of any investment, and adopting a low-key, more subtle approach than going into an organisation all guns blazing. Matching the pace of their ambitions with the pace of change in the wider organisation (which, in most companies, is rarely fast) helps to avoid friction with key stakeholders.
  • Working with partners – few organisations can exist in a tech-enabled society without working very closely with solution providers and internal stakeholders to ensure they are maximising the usage of the platforms the data is hosted on. Ultimately, partners also want the solutions that the CDO implements to be successful, because they become stickier and more likely to be part of the longer-term architecture.

While the survey acknowledges there is no ‘one size fits all’ solution to being a successful CDO, it is clear that striving towards these traits increases the chances of success.

2023 Themes - skills and the AI elephant

In what is becoming a common theme in technology-related conversations, a lot of the success of a CDO’s strategy and vision is linked to the capabilities of the organisation as a whole. Data literacy becomes an integral part of delivering ROI on data investments, because having staff that understand the value of good data and how best to work with it, makes it significantly easier for an organisation to make the most of that data. 85% of ‘Value Creator’ CDOs invest in the expansion of training across their organisations, with the development, acquisition and recognition of talent in the data space also featuring highly.

This being 2023, we can’t get through an article without a nod to the AI elephant in the room. But here, there is good reason to. 75% of the ‘Value Creator’ CDOs are utilising artificial intelligence to support the decision-making process, compared to just 54% of other CDOs. So, it’s hard to avoid the simple assessment that using AI as part of the data function increases the chances of delivering the desired results. However, the CDO plays a critical role in getting the most out of any AI implementation. As Karen Ko, a Partner for IBM and member of our Data Analytics Community Advisory Group, observes: “With Generative AI taking the world by storm to change the way of working of many, one factor comes first: How an organization chooses, collects, governs, and uses its data, either enables or constrains what AI can achieve. Reliable, representational, consensual data is foundational to trustworthy AI.”

There’s much to think about in the modern CDO role – much like the CFO, income and expenditure must be balanced, and potentially competing priorities played against each other. Those organisations that recognise the challenges of being a CDO, and support accordingly, are far better placed to have stability and success in the role, and so in turn the overall organisation.