In a conversation with MicroStrategy CMO Mark Gambill, he described the rise of a new type of role—the Chief Data Officer (click here for article). As part of that conversation, he suggested I talk with Matthew Thomas, CDO, Pandera Systems, a leader in helping firms deliver analytics and automated decision capabilities, to better understand why financial institutions in particular need the CDO role (in addition to the CMO and CIO roles). Below are insights from Thomas regarding the CDO role—and how it adds value above and beyond the CMO and CIO roles.
Whitler: Can you describe the CDO role?
Thomas: To truly appreciate the increasing need for the CDO’s role, one must first understand that 90 percent of the world’s data was created in the past two years alone. That’s a lot of information for a company to suddenly organize, secure and make sense of, let alone make strategic decision on. The CDO emerged as organizations realized the need for someone to lead the management of all of this data as well as guide the organization in technology adoption and training necessary to storing and distributing it all.
Modern CDOs have a hybrid role: first control and secure data, second, maximize data’s value with accessibility throughout an organization while continuing to maintain this controlled state
Whitler: Is this a common role in the financial services industry?
Thomas: With the volume and velocity of data continuing to grow the challenge of reporting that data in a timely and trustworthy medium is a constant challenge. Regulatory reporting and legislative deadlines can cause more than migraines. Consider this: the average company loses up to twelve percent of its annual revenue due to bad data. If there are any non-compliance fines or other consequences on top of that, an organization can be crippled. This is especially important in financial services where those regulatory requirements are more stringent.
I’ll also add that in the age of millennials, there is no longer a single team of IT folks building reports. At companies across the globe, the masses have data access and want more from it. The need for self-service is very real, but behind that, the importance of governing data to avoid incorrect reporting becomes an even larger need.
Whitler: What are the consequences of having a CDO role? Or, what is the incremental value above and beyond other C-suite positions?
Thomas: The CDO is charged with providing decision-ready data to other executives to improve cycle times and cost on capital project considerations. For example, I was recently tasked with a plan to extract data from the Oracle E-Business System and input the information into MicroStrategy, our Business Intelligence solution. During the transfer my team came across a range of inconsistencies, such as departments using conflicting facts to report on given subjects. It’s my job to figure out whose data is correct, how long teams have been working with inconsistent data and what the potential domino effects of this inaccurate reporting were.
CDOs remove ambiguity around what data to use and how it should influence decision-making. Going back to my point on a data governance framework, it’s essential that CDOs implement systems that protect data and provide users with a seamless operating language across all elements of corporate data.
Whitler: Who does the CDO report to? And how are they different than a CIO?
Thomas: It’s ideal that a CDO report directly to the CEO, because it’s the CEO’s overall business strategy that’s defining a CDO’s day-to-day work.
There are important distinctions between what a CDO and a CIO do. The CDO’s role is to manage the information necessary to run the business, while the CIO manages the systems that run the business. In the modern economy, a CDO needs to provide standardized, quality controlled data that people can access to make informed decision that align to the overarching goals of the company.
Whitler: What experiences can help prepare somebody for a CDO role?
Thomas: The most important thing that someone can do to prepare for a CDO role is understand how significant data is in making informed business decisions at every level. A CDO must understand how information disseminates throughout an entire organization to support corporate strategy.
Join the Discussion: @KimWhitler