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Chief digital officer: The newcomer that’s here to stay

If you’re waiting for the chief digital officer to disappear, you may have to wait a while

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The chief data or digital officer (CDO) is not going anywhere, according to the latest research from Forrester, which showed the number of companies appointing CDOs is on the rise. Bad news for CIOs? Only if they fail to recognise the importance of data.

It’s all about culture

While Forrester predicted in 2014 that 2015 would be the year CIOs proved the CDO role is unnecessary, its latest report suggests otherwise.

Forrester’s study, entitled Top performers appoint chief data officers, surveyed 3,000 global business and technology decision-makers and found more companies and governments are appointing CDOs, with 45% already having one in place and a further 16% planning to hire one in the next 12 months.

The report showed there is a strong correlation between appointing CDOs and strong performance, stating top performers are 64% more likely to appoint a CDO.

Jennifer Belissent, a principal analyst at Forrester and one of the authors of the report, told Computer Weekly companies don’t necessarily perform better because they have a CDO, but rather because they understand the value of data. On average, she said, companies with CDOs achieve higher revenue growth, which could mean having one on board increases chances of success.

However, digital natives – such as Uber and Netflix – don’t have CDOs and arguably don’t need one, mainly because they already have a strong data culture, the report said.

Organisations need to address the gaps in data maturity and use the data it collects to benefit the business.

Belissent said developing that culture and understanding the value data brings to the organisation is key, while having someone with the title of “CDO” doesn’t necessarily mean anything, unless the person drives better data performance.

 “It has to do with the ability to see data being an important asset and using it. If someone is taking the responsibility for these functions, they don’t need a CDO,” she said.

CIO versus CDO: Let the battle begin?

The role of CDO is a relatively new one and seems more glamorous than the traditional CIO role. Computer Weekly’s Mark Samuels wrote in January 2015 that the combined forces of consumerisation and the decentralisation of IT knowledge has meant the CIO has become less certain of the future than ever before, partly due to the rise of the CDO.  

Where some studies suggest CIOs feel threatened by the rise of the CDO, others show CIOs welcome the role. Computer Weekly previously reported that a study conducted by research agency Loudhouse, which surveyed 250 CIOs, found 61% of CIOs wanted to recruit a CDO in the next year.

However, the battle may very well be real for some CIOs.

“The perception of the turf battle is not completely unfounded because data has been the domain of techies,” said Belissent.

“The threat is there for CIOs who focus too much on their daily operations without lifting their heads and looking at what the business needs and how technology can play a role in developing the business,” she added.

“These are the CIOs that are going to feel threatened, not just by CDOs, but by strategic C-suite positions in general. CIOs constantly need to be thinking about their strategic role in the organisation.”

Two is better than one

Christian Benson, head of information management and analytics at Atos, said the roles of CDO and CIO may potentially be merging or “working in tandem – where the CDO is more of an advisor, a mentor or ideas person who understands the potential of the market”.

“In that scenario, the CIO becomes the executor and implementer of that vision and strategy. Otherwise there is a huge amount of experience you are not tapping into. The CIOs have seen the market evolve and have relationships with software suppliers and they understand the pitfalls,” said Benson.

Forrester’s report was careful to highlight there is room for CIOs and CDOs to work side by side. The CDO role is not necessarily there to put the CIO out of work, but rather bridge the gap between IT and business.

“CIOs still have a place,” said Belissent. In fact, Forrester’s report found one-third of CDOs report directly to the CIO. 

“The CIO-CDO relationship is nothing short of Hanna-Barbera’s Wonder Twins – ‘shapeshifters’ who transform themselves into various forms to solve the world’s problems,” the report said.

The evolution of the CDO

Forrester’s research showed the exact role of a CDO varies from organisation to organisation, depending on its level of data maturity.

“One thing we see is the role of the CDO is evolving. If the data capacity and the competence is not in place, that needs to be the first step the CDO takes, but once that’s done, the CDO will not go away,” said Belissent.

According to Belissent, the role will transform and continue looking at the analytics side of things and advocating the importance of data. CDOs will then move on to focus on cultural transformation.

In three to five years, the CDO role may not look the same, she added, but there will be a role there depending on the needs of the organisation.

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