Sven Löffler
20. January 2017 0
Digitization

Changing Leadership Roles – The Chief Data Officer

Talking about the typical leadership roles in companies, we mainly mention the Chief Executive Officer (CEO), Chief Finance Officer (CFO) and Chief Information Officer (CIO). In the course of digitization, companies face the challenge of identifying new business models and transforming the company. In the context of these tasks, the term “Chief Data Officer (CDO)” is more and more frequently used – Who is this?

The name already indicates that this role is probably responsible for the data in a company. But since when does one need a separate post for this task?

Data growth is enormous, doubling every two years. As a result, huge amounts of data are generated, which can come from external or internal sources and indicate a big challenge for companies. Thus, poorly maintained data cost companies an average of 13.5 million dollars annually. The CIO in the company cannot handle this task alone. A study states that nine out of ten CIOs wanted a CDO at their side. What could the CDO take as a contribution to value for future IT organizations?

Tasks of the CDO

The CDO of a company is responsible for the company-wide use of information as an asset. He develops and manages the vision and strategy of data management. For example, he establishes strategic priorities, identifies new business models, and represents Data Science within his organization. CDOs mainly report to the Chief Executive Officer (CEO) and are members of the board. A CDO establishes standards and rules as well as the organization for the information system of the enterprise. In addition he determines the metrics for the data and is responsible for data quality, data protection and security.

CIO vs. CDO

Although the roles are very close, one can see that the role of the CDO complements the CIO. The CIO is responsible for the information technology (IT) and supports business through IT. In the context of digital transformation, he is responsible in particular for the transformation of the IT architecture.

The CDO, on the other hand, motivates and initiates the use of data in the departments and has, above all, a horizontal, cross-departmental view of data. He also serves as an intermediary between the CIO and the Chief Marketing Officer (CMO) and in particular supports the CMO by providing data so that he can focus on his marketing  tasks. The Corporate culture plays also an important role in the classification of CDOs. For companies that already have a great focus on IT, it is a good idea to introduce the position on board level, for other companies maybe a step below.

Companies with CDOs

As a result of the financial crisis of 2008, many large banks and insurance companies established the position of the CDO in order to ensure data quality and transparency for regulatory and risk management as well as analytical reporting. While in the USA the role of the CDO has been established for a longer time, it is a rarity in Germany and Europe. Only 2% of all German companies with more than 500 employees employ a CDO and only 5% of the 80 German companies listed in the DAX 30 and MDAX 50, have so far created a CDO position in their ranks. In addition only one of the four companies mentioned above, the ProSiebenSat.1 Group, has moved the CDO to the board level: Sabine Eckhardt (2017). Among the other pioneers are BMW, Deutsche Bank and Volkswagen. Major international corporations such as McDonald’s, Toyota, Starbucks, Nestlé and L’Oreal have been using a CDO for a longer time.

The data driven company

Digital transformation means organizational and cultural change in companies. The prerequisite for a successful digital transformation is a digitized information and data management. This should be the starting point of a digital transformation since the goal of digitization is to become a data-driven company. For this reason, a driver of digital change must be established at the board level: The Chief Data Officer. He is the “secret” converter of the company.

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