Part 3 :: Evolution
CDOs can see better than anyone else the disruptive, transformative effect that harnessing data can have on their organization’s costs, revenue and operational efficiency.
However, evolving the CDO role far beyond regulatory compliance into one that drives business performance and informs operating strategy requires organisations to undergo a cultural shift. This new culture will among other elements require that all departments place data quality—the foundation of all this new potential—at the centre of their day-to-day focus.
Bloomberg’s survey of CDOs reveals significant divergence between the views of CDOs and their colleagues elsewhere in the organization about the importance of data quality. For CDOs, data is the foundation of compliance and the ability to surface business insights, and is a collective responsibility.
This view is seldom shared outside of the CDO’s team: “I think the assumption is if you’re a CDO that every data quality problem is your fault," says one respondent. "When if fact, very often, you’re just the vehicle that’s shedding light on the fact that there is a data quality issue.”
Shifting perceptions about shared responsibility regarding data is a significant internal education challenge, as one respondent says: “It's really more about making sure that the organization understands data better and I don't think [we’re] sufficiently good at explaining the know-your-data culture and where – why this is important and how everybody has contributes to this.”
The reality is that many CDOs need to expend a lot of energy driving a shift in organizational culture to one that acknowledges the importance of data and data quality.
CDOs also need to highlight the fact that data quality cannot improve without people adhering to the right controls, standards and policies.
According to one respondent: “There's an element of the role where you also have to help change the culture of the firm so that everyone and not just the 50 people that have the formal designation of data management officials are responsible. It's a firm-wide initiative. So in the last three or four years, we've seen new heads of data management come in and their first mandate to the board of directors is to help implement a culture where data management is the responsibility of all employees not just an inside, interior group.”
CDOs also have to counter misconceptions about data technology. Technology companies such as Google have made underlying technologies such as Hadoop and concepts such as data lakes commonly used terms in business today, but this, too, can create problems. “The challenge [has] always been [the] desire to change that for the shiny ball … let's go build a data lake! Let's go build a Hadoop environment!” says one respondent. “But a data lake is just another way of referring to the same warehouse in my opinion. And a data lake can quickly become a data swamp. And if you put bad data into the data lake, it's not miraculously going to fix it.”
Widely-held views such as these feed into persisting misconceptions about the CDO’s role—that it is responsible for creating or cleaning data or is alone responsible for the evaluation and implementation of third party data.
CDOs need to concentrate on achieving a cultural shift before an organization understands and accepts that everyone shares responsibility for data and data accuracy.
However, one obstacle to making that cultural shift comes from some CDOs themselves. The evaluation of data quality used by some when asked for tangible internal measurement of their performance often reinforces the old notions of data and the CDO’s role. For example, one CDO responds to a question about how to measure data quality with the response: “The first success measure is we haven’t gotten fined yet, unlike a lot of other banks. That’s a pretty basic measure.”
Clearly the respondent was aware that this was a rudimentary (if important) assessment of data quality but if the challenge is to effect a cultural shift around the use of data and the maintenance of data quality then better measures need to be found. Fortunately, as the CDO role becomes more proactive, new measurable outcomes around how data can lead to cost savings, operating efficiencies and even new products and revenues will become available.
As one former CDO says: “The high level dimensions are accuracy, completeness, and timeliness. The most important thing is you always have to measure it in the context of a business problem or a business imperative.”
Some CDOs already have these stories to tell: the use of big data in retail banking is leading to measurably better service (via customer satisfaction scores) as banks combine geospatial data from smart phones (for example) to automatically enable debit and credit card functionality when clients travel abroad. Also in banking, improved insight from data on previous transactions is enabling banks to customize offers made by third-party companies, improving their relevance to clients and increasing sales revenues. Meanwhile, a CDO at an insurance company mined its claims data finding correlations between spikes and enabled preventative initiatives that have lowered payout rates.
These are still early days, and many CDOs are faced with a fundamental scenario, however. A cultural shift is needed to build these outcomes, but still the outcomes themselves are the most powerful catalyst for that cultural change—even if through small and incremental progress.
Squaring the circle will require the active participation of senior management.