Thanks to technological advancements over the past few years that allowed for the explosion of big data in terms of capturing, storing and analyzing information, data management skills are more in demand than ever before. According to a January prediction by Gartner, one-quarter of large global organizations will have appointed chief data officers (CDOs) by 2015 – more than double the number of those that had CDOs in 2012.
The acute need for CDOs or similar data-driven positions was illustrated by the results of a recent study conducted by a division of audit, tax and advisory services firm KPMG. Although 69 percent of the 144 CFOs and CIOs who participated in the study stated that viewing data and analytics was “crucially or very important” to their organizations’ current growth plans, 75 percent said they found it difficult to use data to make important decisions.
“We live in an increasingly data-driven world where [data and analytics] has the potential to revolutionize the way we conduct and manage business operations across the entire enterprise,” said Mark Toon, CEO of KPMG Capital, in a statement quoted by the Worcester Business Journal Online. “From CEOs, to CFOs, CIOs and CMOs, the challenge for today’s executive is understanding how to draw actionable insights from data and turn them into tangible, genuine results.”
Failure to adequately mine or leverage the information contained within this data could spell disaster for companies eager to remain competitive in their fields.
“Making key business decisions based on data can make all the difference between success and failure, so managing these processes across multiple line-of-business teams requires a new approach,” pointed out Brad Peters, CEO of on-demand business intelligence and analytics provider Birst, in a January piece for The Guardian. “More understanding of how data is being used within a company is required, driving the need for chief data officers.”
Why onboard a data-focused executive?
In order to underscore how important it is for companies to add a CDO role to their list of senior management positions, Peters drew parallels with the need to manage IT and facilitate strategic marketing alignment in the 1980s and 1990s, respectively. He stated that just as these requirements led to the creation of the now-ubiquitous chief information officer and chief marketing officer posts, the increased need to crunch numbers and turn data into actionable insight warrants the deployment of an executive search for a CDO – a need that is compounded by the climate of the current market.
“With competition in the market remaining fierce, company performance depends on strong product and service offerings, supported by efficient IT processes and marketing effectively,” Peters wrote. “However, all of this is underpinned by being able to collect, understand and use data as a strategic asset. The role of the CDO will ensure that data is used to make the right critical decisions and achieve success.”
The CDO alternative
For firms unwilling or unable to introduce a CDO into the C-suite, there’s another option: employee empowerment.
“Executives can no longer hoard decisions at the C-suite level. Savvy executives are realizing they must now delegate and distribute decision rights deeper into their organization to empower their managers and employees,” wrote Gary Cokins, founder of advisory firm Analytics-Based Performance Management LLC, in an article for Information Management. “This is because of the exponentially growing mountain of data, both structured (numbers) and unstructured (text) data including social media, and a sped-up and volatile world.”
He advocated ceding control of certain corporate aspects – those he defined as operational, rather than strategic – to employees. This gives members of staff the responsibility of handling small, low-level and/or routine tasks while freeing up their superiors to tackle more complex or high-level duties.
Delegation generates numerous advantages for a company, both when related specifically to data management and in general. Human resources management website HR.BLR.com outlined some of these benefits:
– Executives have more time to accomplish the tasks they elected not to delegate.
– Executives can focus more of their energy on the tasks only they can do.
– A company-wide spirit of participation is established, with everyone playing an important role.
– Employees feel trusted by upper management, which often translates into higher engagement and motivation across the workplace.
– Employees are encouraged to develop their skills, which boosts the overall competence of the workforce and prepares individuals for advancement.
Whether companies elect to onboard a CDO or distribute data-crunching duties among members of the C-suite and their subordinates, one thing’s for sure: Failure to appropriately handle the influx of information brought on by big data will put them at a distinct disadvantage, a situation that should be avoided at all costs.