With data and analytics (D&A) emerging as a strategic business priority and competitive differentiation for majority of organizations, the role played by chief data officers (CDOs) is growing to new levels.
Gartner Research has coined the term CDO 4.0 to mark the shift from a CDO who focused on D&A projects and programs to one driving product-centric organizations.
Mario Faria, VP and program director at the Gartner Research Board, said, “CDO 1.0 was focused exclusively in data management. CDO 2.0 started to embrace analytics. CDO 3.0 led and participated quite heavily in digital transformation. This fourth version of the CDO is focused on products, and on managing profit and loss instead of just being responsible for driving D&A projects and programs.”
Product-centric strategies built around data analytics make it easier for businesses to innovate and build new business models, while also accelerating the digital transformation. This happens because analytics-driven approaches focus on user experience, competitive differentiation, market trends, and more.
Telecommunications, for example, is one of the biggest sectors that leverage big data to improve business, with around 94.5 percent of the businesses already making significant investments in D&A.
According to Tata Tele Business Services, big data has the potential to place the telcos in a position to win the battle to earn more customers and create new revenue streams. It provides them with a wealth of information about their customers’ behaviors, preferences and movements.
Telcos can create customized product offerings based on customers’ usage patterns, billing data, support requests, purchase history, service preferences demographic information, location, and more.
The success of market leaders like Google, Facebook, Amazon, Uber and Netflix proves the role of analytics tools in shaping the business models. Gartner’s Faria asserts that CDOs must think about the data first and the use cases later, as followed by these companies. They have succeeded in building successful platforms that allow data capture and analytics usage, with faster life cycles between releases.
CDOs should also work towards scaling the usage of the platform across the enterprise, Gartner said. In the product line management model, product lines are funded based on the business capabilities they support. Common or shared capabilities — such as infrastructure, technology, D&A — are funded based on the anticipated and aggregated needs of the product lines they support.
CIOs and other cross-functional executives, as well as business unit leaders, must set the tone for the importance of product management in driving successful growth and scale.
“Not all CDOs will be able to make the transition from a project or programs mindset to a product mentality,” said Faria. “CDOs who are able to deliver results using an operating model that hides details and is focused on the better, more scalable usage of the data assets, will succeed.”
Last year, Gartner also stated that by 2021, the office of the CDO will be a mission-critical function comparable to IT, business operations, HR, and finance in 75 percent of large enterprises.
The aspirations around data bring enormous responsibilities on CDOs. To achieve the results, they will have to identify the disparate challenges and address them individually.
A recent PwC report indicates despite the widespread understanding of data’s role in companies’ strategic agenda, the gap between the insights that are needed by a business and those that are actually accessible has not been addressed.
The biggest challenge ahead CDOs, therefore, would be to address these gaps.