Governance and Analytics Will Be Top Priorities
Gartner’s first survey of working chief data officers finds that their main mandate and objective is to manage, govern and exploit information as an organizational asset. As a newly emerging role, there is a high degree of variability in what CDOs do, to whom they report and how they are measured.
- Most responding chief data officers (CDOs) have responsibility for both information governance and analytics, putting them in position to exploit both in support of the business strategy.
- The most effective CDOs in our sample are those who report outside of traditional IT, according to the self-reported responses. However, many of these CDOs also perceived their relationship with IT as marked by conflict for the same reason.
- There is a serious lack of consistent, meaningful metrics to measure the effectiveness of the CDO office, especially in relation to business metrics.
- Few companies have the required maturity level to embrace, support and exploit the CDO role, according to respondents. This lack of maturity is reflected in inadequate budgeting, organizational confusion about the CDO role, weak board-level support, and a poor understanding of the concept of information as an essential corporate asset.
- Maintain focus on revenue-generating opportunities for information, exploiting data for monetization and business advantage.
- Gain control of information governance as a necessary, but not by itself sufficient, step for success.
- Expect and manage IT resistance, and convert it into cooperation by aligning shared efforts in support of measurable business outcomes.
- Continue to evolve the role and educate your stakeholders and yourself in a fast-changing environment. Ongoing personal and organizational development is essential to success in the CDO role. Identify and apply meaningful business-facing benchmarks and metrics to prove CDO performance and effectiveness.
Strategic Planning Assumptions
- Through 2019, 90% of large organizations will have hired a chief data officer (CDO); of these, only 50% will be hailed a success.
- By 2020, only 20% of CDOs will report to the CIO.
CDO Survey Findings
The first annual Gartner Chief Data Officer (CDO) Survey comprised 33 in-depth telephone interviews, conducted from May through July 2015. All participants were from the U.S and the U.K., and the methodology of the survey is explained in the Evidence section of this document. 1
The purpose of the survey was to test hypotheses about the role of the CDO, including:
- Major job responsibilities
- Reporting relationships
- Contribution to the organization
- Metrics and measurements of job performance
- Challenges and roadblocks
- The outlook for the role’s future
A total of 27 people surveyed had the formal CDO title or, based on their job responsibilities, were de facto CDOs. The survey also included six respondents whom we classified as “other stakeholders” to gain a different perspective on the contribution that CDOs make to their companies and on how they work together. These six comprised: three IT leaders, one of whom was a CIO; two CEOs; and a VP of research and development.
The respondents came from five verticals: financial services (14), government (7), healthcare (3), not-for-profit (2), other (5), and technology vendor (2).
The findings are presented and analyzed here under 10 categories:
- Reporting relationships
- Organizational maturity levels
- Information evangelism
- Key skills
- Long-term strategy versus tactical successes
- Challenges and roadblocks
- Outlook for the future of the role
All of the CDOs we interviewed had at least some responsibility for information governance. Most also had responsibility for the analytics functions, or at least some of them. A small minority had only governance as their responsibility.
Specific responsibilities vary widely, reflecting the still-evolving CDO role in organizations (the first CDO was named in 2006), but certain themes did emerge from the survey in terms of CDOs’ strategic responsibilities:
- Creating and staffing new information governance and data quality management functions (see “Organizing for Enterprise Information Management” ).
- Managing data as a corporate business asset, from a foundational level (master data management) and bridging data silos for enterprisewide use (see “Measure Your Information Yield to Maximize Return on Information and Analytics Investments” ).
- Implementing a strategy around information governance, enterprise analytics, and information architecture and data assets (see “Strategic Roadmap for Enterprise Information Management” ).
- Supporting strategic corporate business goals by improving data quality for broader corporate use and addressing customer needs (internal and external).
Since 2006, the number of CDOs has grown from one to an estimated 950 in the third quarter of 2015, and appointments have been accelerating in the last three years. The pace reflects organizations’ growing realization that information is a core business asset that needs to be managed separately from technology.
That realization, in turn, is reflected in the fact that 100% of the survey respondents indicated that their principal mandate is to apply governance and analytics to information assets in the service of business objectives.
- Focus CDO responsibilities on asserting strategic control, in governance and analytics, of the organization’s information assets.
- Prioritize revenue-generating opportunities for leveraging information.
Respondents perceive that the most effective reporting relationships are those that fall outside the IT group, reporting to someone other than the CIO. Why? Because by moving the data office out from under the IT function, leadership sends the message that information management is a business function, rather than a technical one.
As a corollary to this, a number of CDOs reported that IT and/or the CIO had “felt threatened” by the creation of the office of the CDO. They also reported that IT was either noncooperative or actually obstructive of their goals. A number said that this situation had been corrected and that they now had good working relationships with their technology counterparts. Those that had been successful in turning around their CIO relationships said that shared KPIs, management support or outright intervention, as well as a lot of persistence on the part of the CDO, had been factors in working out relationship issues.
The most common reporting relationships were CDO to COO, or CFO and CDO to CIO. In cases where the CIO had an active role in creating the office of the CDO or information management role, relationships were more cooperative from the outset (see “CDO Reporting Relationships Can Make or Break Your Information Management Program” ). By 2020, Gartner predicts that less than 20% of CDOs will report to the CIO.
CDOs should expect noncooperation, resistance and obstruction, unless the CIO has been actively involved in the creation of their role. These reactions indicate the fault lines of relationships that need to be corrected if other stakeholders are to be engaged with and won over. They also indicate the limits of the CDO’s authority and, thus, where those limits might need to be expanded, pulled back or otherwise changed.
- Accept that conflict is a likely part of the CDO function, and treat it as an opportunity for engaging with stakeholders and demonstrating the value of the CDO office to their objectives (see “The Chief Information Officer and the Chief Data Officer Complement Each Other” ).
- Manage conflict as a means to building trust and basing authority in trust (see “How to Develop Analytics That Foster Trusted Business Relationships” ).
Proving the effectiveness of the CDO role is essential to success. “For our own survival, we’ve had to create value metrics because we have to compete for funding just like every other group,” said one respondent.
Respondents also said that creating meaningful metrics is one of the biggest difficulties they face. Of those that reported having metrics, many different varieties were cited. Some had direct profit and loss and revenue-generation metrics; others were measured by having the right data in place for researchers to begin doing their own projects. Several had only personal (versus team-oriented) metrics. The majority said they had difficulty relating information metrics to business metrics. A handful had good metrics that were neither too ambitious nor too vague.
- Identify clear, measurable business-relevant criteria for defining the CDO office’s performance.
- Do not create too many metrics.
See also “Toolkit: Building the Business Case for Master Data Management” and “Seven Steps to Monetizing Your Information Assets.”
Survey respondents indicated that the effectiveness of the CDO function is related to the maturity level of the information management function of the company overall. At the outer boundaries of the survey responses, a number of respondents fell into small sets of “leaders” and “laggards”.
The majority of respondents are somewhere in between these two extremes and can be characterized as building experience and making progress. In several instances, respondents had reported that their efforts had stalled and that they were not confident they would receive the support they needed to continue making progress.
- Develop a two-year horizon for the CDO office to set and achieve realistic expectations.
- Create and implement a plan for regular board-level presentations, offering a high-level but evidence-based perspective on how the CDO office is enabling business objectives.
Most of the respondents confirmed that helping their organization to understand and support the CDO function is a difficult task, even with strong sponsorship from one or more executives. In a few cases, where the sponsorship came from the CEO, respondents perceived that many business leaders still did not understand or buy in to the CDO. Almost all of the respondents considered communication and evangelism as a primary part of their responsibility.
Communication should be understood as a power lever that moves business and IT leaders to buy in to the overall data strategy and to specific data initiatives. Buy-in implies more than simply assent to a persuasive presentation. It implies shared vision, common cause and commitment, as reflected in shared business objectives and metrics. Those elements solidify and enhance the CDO’s authority.
- Prioritize communications as a strategic initiative to strengthen the authority of the CDO.
- Demonstrate the outcomes, benefits and value led by the CDO office in terms directly relevant to the challenges and objectives of stakeholders.
- Lower organizational resistance to the office of the CDO by focusing on measurable outcomes and by recognizing collaboration.
Key Skills and Background
Respondents were divided on whether the CDO should have a technical or business background. Most agreed that being technically naïve was dangerous. But most who had business backgrounds also said that they had learned enough about technology to do the job. The strongest opinions in favor of business skills were from those with business backgrounds in specific verticals. According to one financial services respondent: “This is all about understanding the business needs, business drivers and what is required in order for the organization to achieve whatever its success measures are. And being able to communicate what needs to happen and the value of why you are doing what you are doing.”
Some said that having a long tenure in the company was not essential to the CDO’s effectiveness, but that they would find it difficult to be a CDO in a different vertical.
One issue that this survey does not address is whether “business background” or “business skills” is a proxy for collaboration and diplomacy skills. If so, then the key issue may be less about tenure in business and more about demonstrating abilities for engaging multiple constituencies, winning buy-in and active support, and enabling those constituencies to achieve key business outcomes.
- Broaden and deepen your knowledge of all aspects of the business.
- Identify personal or organization deficits in collaboration skills, and develop a plan for strengthening these.
Survey responses indicate that what’s important in CDO budgets is less about the dollar amount, which obviously varies from company to company, and more about what the funding shows in terms of organizational support.
The extreme positions can be quite frightening. One respondent’s comment was that, “the CFO, to be honest, has said spend as quickly as you can go. He trusts me not to be foolish with budget but has basically said move as quickly as you can move and here is the money you have got and if you need more, come back. I feel like I have very strong financial support for the priorities we have outlined.”
Yet another respondent said that, although he had been promised a substantial budget, he had “not seen one dollar” of the money.
The survey responses revealed that CDO programs are being funded at the level of between 10 and 50 people. Some programs and projects included capital expenditure for software and tools, but most did not. Funding for tools was more often done by asking the CIO and IT to make the purchase.
- Match budget requests to your organization’s level of maturity in information management and analytics.
- Accept the fact that you may have to start on a shoestring budget, but if you can demonstrate success in your first six or 12 months, the budget will follow. If you succeed and the budget does not follow, you are right to question the organization’s commitment to the data office and the long-term future of the role.
Long-Term Strategy Versus Quick Wins
All of our CDO respondents emphasized that they see their office’s objectives as long term and multilayered, reflecting the complexity and rapid change of modern information management and the legacy of ungoverned, unclassified and poor quality information. But this long view must be coupled with an opportunistic approach to tactical successes.
Even limited resources, shrewd planning, on-time execution and skilled collaboration can result in high-impact and high-visibility successes. These, in turn, solidify the authority of the CDO office and make future success more likely.
- Treat tactical initiatives with IT and business in strategic terms — as a way to demonstrate the value of the CDO’s office in helping stakeholders leverage information to realize their business objectives.
- Create a two- to three-year strategic plan for yourself and your role. If, by the end of that time, you are not mainly focused on the longer-term strategic aspects of information management, then you should seriously question the organization’s real commitment to managing data as an asset and act in your own best interests.
- Leverage Gartner’s Enterprise Information Management (EIM) Framework to orchestrate the “think big, act small” focus (see “Strategic Roadmap for Enterprise Information Management” ).
Challenges and Roadblocks
These interviews show that there’s an array of challenges and roadblocks facing CDOs. Forewarned is forearmed: CDOs can use this knowledge to sidestep or surmount these issues.
As some of the previous findings make clear, many of the challenges are internal, involving people, culture and roles. Uncertainty or misunderstanding about the CDO’s role can lead to lack of engagement or even active resistance. These reactions can be anticipated and countered.
A few respondents warned against creating the CDO role in response to competitive pressures, or to the perception that “everyone else is doing it.” The organization needs to grasp the idea, the importance and the value of managing information as a strategic asset. Without this, according to these respondents, the CDO is likely to fail.
Indeed, Gartner predicts that, through 2019, 66% of large organizations will have hired a CDO, but only 20% of these will be hailed a success. Lack of budget and personnel is certainly a huge challenge for many CDOs. Our respondents had typically been in their jobs two or more years and had some solid results behind them before they were able to ask for and receive a greater level of support. Most of them accepted this with good grace — all new ideas and functions need to prove themselves. However, they were also clear that remaining in an organization that expected them to operate with little support for the foreseeable future was not acceptable. This is simply a “work hard and wait” game. Given the rate at which CDO roles are being created, you can be successful somewhere, if not within your current organization. All experience is good experience, and failure teaches us more than success ever does.
Outlook for the Future of the Role
Gartner’s own research shows that the number of CDOs has grown from extremely low levels in 2006 to 250 in 2015, and to 950 by the third quarter of 2015. We are predicting that the role will grow even faster in the next few years. Inevitably, the hype will begin, as the CDO role is seen as a solution to a great number of data-related problems and data monetization opportunities. We are already seeing it climb toward the Peak of Inflated Expectations. In the next year, there will be stories of how CDOs failed to meet expectations. These failures will be due to the usual combination of badly thought-out strategy and institutional immaturity, coupled with inexperienced individuals trying to do a job that is difficult at the best of times. However, longer term, Gartner’s position is that the CDO role will survive and thrive in many organizations.
Our respondents had a number of things to say about the trend. According to one: “It’s a very interesting question. In an ideal world the chief data officer would be as important as the person who orders paper for the office. We were truly a data-enabled organization, but that’s the utopia, so I think the chief data officer role will continue to be valid, because the data needs of organizations will continue to evolve.”
The evolution theme was a common one. Many of the respondents understood that, as the appreciation of data as an asset grew, the CDO role would become bigger and more important. Several foresaw the day when the value of data as a business asset was embedded in the culture of every organization, but none believed that day was coming any time soon.
- Build your skills and those of your enterprise in the art and science of data and information management. It will pay off in both the short and longer term.
1 All evidence was taken from the first annual Gartner Chief Data Officer (CDO) Survey. The methodology used was a service of interviews, conducted from May through July 2015. It was a qualitative survey and there were 33 participants. All participants were from the U.S and the U.K. The purpose of the survey was to test a number of hypotheses about the role of the CDO including major job responsibilities, reporting relationships, contribution to the organization, metrics and measurements of job performance, challenges and roadblocks, and their outlook for the future of the role.
A total of 27 respondents worked under the actual CDO title, or were de facto CDOs based on their job responsibilities. The survey also included six we classified as other stakeholders, to get another perspective on the contribution that CDOs make to their companies and how they work together. These included two CEOs, three IT leaders (including one CIO), and a VP of research and development.
The participants came from five verticals: financial services (14), government (7), healthcare (3), not-for-profit (2), other (5), and technology vendor (2).
The survey was done with a view to laying the groundwork for future, quantitative surveys in subsequent years.