By Scott Logie, MD, Insight at REaD Group
Many years ago, sometime back in the last millennium in fact, I joined what was then Bank of Scotland as head of a team called Customer Knowledge. We were part of the Strategic Marketing department and were responsible for helping the bank understand who their customers were and how better to sell to them. I think we were pretty successful; we built a life-stage based segmentation, embedded campaigns around it and saw response rates as high as 25% to some of our mail campaigns.
However, my objective when I joined had been to get on the board and be the bank’s first ever Chief Data Officer (CDO). In that, I totally failed. In my 5 years at the bank we grew data understanding, built a full data warehouse (probably a puddle rather than a lake), created a data quality programme and ensured data was at the heart of all customer communications. We did a lot of education and got great buy in from senior people, including the Treasurer of the Bank (the most senior executive possible). And yet, a board level data person would never have been considered.
Therefore, it is really heartening to see Chief Data Officers in many organisations. There are probably a number of things that have driven this change. First of all, the evolution of the use of data, and the importance of data, over time. As businesses have become more digital in all aspects of what they do, this has created more and more data and that then needs responsible people to look after and manage it. Businesses will hopefully then start to see that data is an asset.
I have had a couple of interesting discussions over the last week or so around valuing data. TFL for example, who make much of their data open for free to developers and app designers, have still put a value on that data. They know what the value is, even if it is something they offer out FOC.
Secondly, there are the native digital businesses, the ones that started digitally rather than undergoing an evolution. For these companies, data has always been at the heart of what they do. As such having someone as the data “owner” has always made sense. Without management and interrogation of the data these companies subsequently wouldn’t thrive and be successful. Often this has run hand in hand with the same person who runs the technology although these roles have then diversified over time.
Finally, there is the impact of GDPR. If data wasn’t being discussed at board level beforehand – and it should have been – then it is now. Suddenly it wasn’t just about data being an asset and having a value, it was also about risk. A mistake with your data could result in a massive fine, so let’s make sure someone’s got the responsibility of ensuring that doesn’t happen.
Data used to be a subset of marketing and/or IT and many tensions arose because of that. Now data is central to organisations and needs to sit alongside these disciplines as well as many others such as operations, HR and finance. The value of the data on customers, performance, staff, suppliers and so on means that the real owner of data now is the CEO and therefore having one person report in who is managing the control of the company’s data is vital.
In some ways, it was easier back before Y2K. The data was simpler, the volume of it a lot lower and the usage a lot less. The savvy businesses were those that saw the growth in data at that point and put someone in charge of the whole data estate. For them, the elevation of that person to CDO was straightforward. Those that fudged this decision and spread the responsibility around have had to react. In many cases the decision to appoint a CDO has still not been made.
My own view is that in the next 10 years this role will become more prevalent and be one of the essential roles around any balanced board table alongside Finance, Operations and HR. Data is such a vital tool for businesses to operate at their optimum capacity. Manage it well and see your profits rise and rise. Manage it poorly and not only will your competitors win but the downside risk of fines and brand exposure could be enormous.
There are lots of reasons why I would not want to be starting my career all over again but, if I was, having an ambition to be a CDO would definitely be on my list and maybe it would be more likely now than when I was starting out.