Friday I wrote about Ajit Pai, President Donald Trump’s pick for Federal Communications Commission chairman, who will dismantle some internet regulations put into place in 2015.
This has caused real fear among proponents of net neutrality — the idea that internet service providers (ISPs) such as AT&T and Comcast can’t slow down or speed up internet traffic at their whim.
For example, 86% of 411 IT professionals surveyed on peer network Spiceworks worried that ISPs would reduce internet speed for certain types of content should the rules go away. And 84% were afraid providers might choose to block access to certain sites.
But how crucial is the net neutrality law to a free, open and competitive internet?
It’s not, said Johna Till Johnson, CEO and founder of Nemertes Research. Net neutrality, she said, is based on the faulty assumption that ISPs are “bad guys” who if not forced will stifle small startups.
“The logic behind passing [the 2015 rules] was to prevent carriers from doing something they hadn’t ever done before — only out of fear that because carriers could possibly do it and they’re big, bad entities and they might do it,” Johnson said.
Who’s afraid of ISPs?
Hiawatha Bray, technology writer for The Boston Globe, made a similar point. He spoke to Radio Boston host Meghna Chakrabarti on Boston radio station WBUR on Thursday.
“We’ve had this internet argument going on now for over a decade, and I keep waiting for this nightmare in which giant internet companies are seeking to suppress smaller startups and it just hasn’t been happening.”
That is, until AT&T started letting people who use its mobile service view DirecTV, its subsidiary, for free — a clear case of a provider showing favor to its own content. That’s unfair, Bray said, but “this is about the first time that anything like that has happened.”
What new FCC head Pai has made clear he doesn’t like is the reclassification of internet providers as public telecommunications services under Title II of the Communications Act, the law put in place in the 1930s to watch over telephone companies.
The FCC doesn’t regulate what ISPs can charge consumers; mainly it uses the law to police practices it sees as unfair or harmful to consumers — for example, it can target business alliances in which companies pay providers to prioritize traffic. And it has said what AT&T is doing with DirecTV is in violation of net neutrality laws.
A lighter touch on net neutrality law?
But Bray said Title II gives the FCC more authority than it needs to oversee an industry that “has thrived on a very light regulatory regime” before the 2015 rules.
“I think there should be a much lighter regulatory regime in which you would have Congress pass a law that would forbid certain specific unfair practices.”
And Johnson said net neutrality ignores the influence that companies like Google have on internet business.
“Because, hey, Google Play doesn’t carry your app, you’re toast,” she said. “And by the way nobody’s requiring Google Play to carry your app. They just do or don’t and nobody’s looking into that.”
Finally, locking in “old-fashioned regulations” doesn’t take into account emerging technologies, Bray said.
Right now, for example, a company called Starry Inc. is testing a service in Boston that would offer high-speed internet — 200 to 300 megabits a seconds — at around the same price as today’s broadband.
If it works, Bray said, the need for net neutrality law would be moot — because more than just a few companies would control the pipes that pump the internet to users.
“You’d have real competition and the need to regulate the internet as a Title II kind of telephone-type monopoly completely vanishes,” he said. “I just don’t think it’s necessary now, and it’s certainly not going to be necessary when the newer technologies become available.”
Automation technologies – including physical- and software-based robots, artificial intelligence, machine learning, and other types of “learning” tech – are expected to change the future of work in a massive way in the coming decades. McKinsey Institute recently projected that over half of “worker activity,” or job tasks, has the potential to be automated as early as 2035. This tech will increase global productivity growth by 0.8% to 1.4% annually, the consultancy said.
For businesses, this represents tremendous savings as the cost of producing goods and delivering services goes down. And it’s not too soon for companies to take steps to take advantage of these technologies. Indeed, those that haven’t yet taken steps may be left behind – permanently, said Josh Sutton, global head of data and artificial intelligence at consultancy Publicis.Sapient.
“I do have [a] concern around whether [AI laggards] will be here a decade from now or not,” said Sutton in a phone conversation about artificial intelligence and IT last week.
He points to two reasons: Consultancies like Publicis are seeing a major shift in business success stories toward companies adopting a services-based approach rather than a product-based approach. In addition, the rate of change in industry is increasing and the cost of vendor lock-in is decreasing. “If you take those two things in parallel, what you’re seeing isn’t just a technology wave. You’re seeing a fundamental shift in how businesses and enterprises want to engage from a commercial point of view, and [if you’re] behind that shift, [it’s] going to be … very difficult to catch up,” he said.
Companies that wait for AI technology to develop into what Sutton calls “canned solutions” run the risk of forever playing catch-up – or failing completely — because the rate of change is so fast.
AI challenges: Education plan
He advises CIOs to map out a strategy for AI technologies. But they face a number of potential obstacles, he warned.
The first big challenge is for CIOs to educate themselves on the technology and discern between vendor hype and actual product capabilities. “There’s a tremendous amount of noise in the industry and there’s a very wide gap between what many product companies position themselves as being able to do versus the reality of what they can actually deliver upon,” he said.
Organizational expectations can also complicate a CIO’s efforts to set an AI technology strategy. Business leaders have a range of attitudes about AI, Sutton said, from those who believe it’s the answer to all of a business’ problems to those who are dead-set against investing in such an emerging technology.
“In only extremely few cases does the business leadership of a company have a well-grounded understanding of what’s possible vs. what’s not,” he said. IT leaders need to work to set appropriate expectations.
AI challenges: Single vendor vs. best-of-breed choice
Once CIOs and business leaders have a clear sense of what is truly possible with AI technology, they will face the question of whether to adopt a single vendor’s platform or to take a best-of-breed approach. Sutton advocates the latter.
“I believe the industry is too immature to commit to any single player. And I don’t think any single player provides you the full suite of capabilities you’d want across an enterprise yet,” he said.
Indeed, the decision will be a strategic bet for CIOs. Should they align themselves with a particular vendor in the hopes that its AI technology develops the capabilities that the IT organization needs? Or, should they put together a best-of-breed architecture, which is more complex than the single-vendor strategy but offers more flexibility?
“I have a strong bias that the services-based best-of-breed approach is a less risky road for companies to go down,” Sutton said. “But that’s not to say that some companies won’t make the right bet on the company that does get to that true enterprise-level platform first and standardize around them and have a nice clean, simple architecture as an advantage coming from that. But it’s a big bet to make.”
AI challenges: Data governance, culture shock
The final big challenge that Sutton sees relates to data strategy, because many AI use cases are dependent on data, whether from internal or external sources. Businesses need to have solid data governance policies around their internal data, and understanding how to augment that data with data from external sources is also very important.
“Even your data scientists and data teams that you historically have had on staff might not be particularly equipped to deal with the challenges that need to be addressed,” Sutton said.
That’s not to suggest that there’s a big shortage of people who are prepared to work with AI technology. Sutton said that he thinks there are a lot of technologists who are very interested in working with AI, and the tools are easy to work with. The skills required for AI development can be transferred from skills developed around other technologies, he said.
Sutton said he’s more worried about the cultural changes that businesses will face as AI technology is implemented. AI will increase human productivity, which will inevitably lead to staff reductions. Some of those reductions will be accomplished by attrition, but some of them will be more visible, much like those created by outsourcing in the past.
“Outsourcing was viewed with a very, very negative perception because it was taking jobs away and it created a backlash against the organizations and people within organizations driving that,” Sutton said. “I believe that there’s a risk that that might happen with relation to artificial intelligence solutions as well.”
Have you ever spaced out during a meeting only to come to after hearing something arresting — a proposal or possibility that might really affect how you do your job? Rosetta Stone’s Mark Moseley has — and it led to his purchase of copy data management software.
Moseley is vice president of IT at the language-learning company, which overhauled its business from shipping compact discs that teach Italian, French, Chinese and other tongues to offering courses online, which people can access on their PCs or smartphones.
Rosetta Stone’s growing number of online offerings resulted in an explosion in the amount of data that has to be stored. In fact, Moseley said, he was running out of floor space in his data center for servers that could hold all the data.
A big piece of the problem was a profusion of copy data — that’s the duplicate copies of data that backup software and other applications churn out and then stash on physical servers.
Meanwhile, Rosetta Stone salespeople were pitching language-learning software to a technology company called Actifio. Its trade? Making software to deal with overflowing copy data. But copy data management software wasn’t the main reason Moseley agreed to a meeting with the Actifio folks.
“It was a favor really to our sales team,” Moseley said. “I didn’t care. I was mostly zoned out of the meeting.”
Then an Actifio sales rep mentioned being able to very quickly create a clone of Oracle Database — a separate copy of the database management system software and the business data — in just a few minutes.
“I’m like, ‘What?'” Moseley said. Rosetta Stone’s enterprise resource planning system runs on Oracle. “The cloning process for us would be days.”
Moseley was rapt, asking questions and imagining being able to swiftly clone his test and development environments, too. That would help his developer team move lithely from one project to the next.
For example, Moseley said, if there’s a problem in an application’s production environment — the one users use — developers could quickly spin up a cloned environment and fix the problem there.
Another scenario: “You’re in the middle of developing something. You hit an anomaly; you blow up your environment. We’ve got a deadline. I can’t wait two or three days I need a new one now.”
Recipe for disaster recovery
Then Moseley saw other benefits the copy data management software could have for his IT operations: Actifio’s cloud-based application lets him virtualize his data, hardware platforms and storage and backup applications. That allows him to store less data.
Actifio also lets Moseley set up disaster recovery sites in the cloud — a huge boon.
“I don’t know how often most companies have disasters, but we don’t have them very often, and we don’t have the money to spend on having a completely new disaster recovery site set up,” Moseley said.
“However, with this platform I can very cheaply and easily have a disaster recovery site set up in the cloud ready to go. It’s costing me almost nothing — until I have to use it.”
That gives Moseley a sense of security that he can then present to Rosetta Stone’s customers, who share their contact information with the company.
That’s now. Back during the sales pitch — after being shaken from indifference — Moseley started piecing together “all of the different things that I can do with this platform and I’m hooked. And really it all started with just talking a little bit about Oracle.”
Mark Moseley talks about Rosetta Stone’s digital transformation strategy in this SearchCIO interview.
Are two clouds better than one? For many organizations moving part or all of their IT operations into the cloud, they are. Three and four are even better.
Many organizations today follow a multicloud strategy — putting some workloads in Amazon Web Services, others in Microsoft Azure and yet others in IBM Bluemix or Google Cloud Platform. That way, they’re not locked in to one provider, said Donna Scott, an analyst at market research house Gartner.
“So they have options when they are deploying,” Scott said in a recent webinar on cloud computing for CIOs. “Or if they become unhappy with one provider or one provider decides to raise their rates by 50%, they have options — competitive options — to go after.”
Other companies use a multicloud strategy for more than just mitigating risk, sister site SearchCloudComputing reported late last year. They might put different applications in different providers’ clouds because of lower costs or better performance. That’s a shift that has happened as cloud has become more popular.
“Multicloud today is much less about resilience and hedging bets and more about matching workloads to services,” said Melanie Posey, analyst at market researcher IDC, in the article.
But there are pros and cons to a multicloud strategy. The big pro is choice, Scott said. With applications hosted by different cloud providers, a CIO’s eggs are in different baskets, “just in case your partnership with a vendor goes awry, they don’t meet service levels, they raise their prices.”
There a variety of negatives to consider, too, Scott said. Organizations need to learn how each cloud provider they’re working with works. The cloud computing industry still largely lacks standards, so providers have different capabilities and APIs.
And each may require different cloud product managers — a new role for many organizations — to determine what applications to keep on premises and what to move in the cloud and what specific services offered by the cloud provider to use.
So if a company has applications split among two cloud providers, Scott said, “you might find that one product manager can manage both; you might find you have to have more skills and expertise.”
To learn more about cloud product managers and other key cloud roles, read this SearchCIO tip.
Rosetta Stone knew CDs alone wouldn’t cut it in the digital age. The language-learning company now helps people roll their Spanish R’s and sort out der, die and das in German with cloud software, available to them online and on their smartphones.
It’s something out of the digital transformation strategy playbook, if there were one: Using digital technologies like cloud computing to revamp business and better serve customers. That gives Mark Moseley, who leads IT at the Arlington, Va., company, the responsibility of not just supporting business but helping drive it.
But as cloud and mobile computing have made it easier than ever for business people to create new technology-enabled products and services, Moseley wouldn’t say he leads the company’s digital evolution in the traditional sense.
“I’d say I’m keeping pace with where my internal customers have been going,” said Moseley, vice president of IT at Rosetta Stone. “I lead with the best practices and with the element that guides them in the direction that I want them to go.”
A beacon for business
That direction is one that safeguards the security of the company’s data and its customers’ data, he said. And even the company’s large contingent of software developers, eager to try a new third-party service or get out the next product using the open source container technology Docker need guidelines.
“They may not be thinking about all of the different elements necessary for us to ensure that we’re meeting our corporate and compliance, legal and customer goals,” Moseley said.
Moseley doesn’t like to use the word boundaries — “because when you establish a boundary, it’s going to get crossed.” What he and his team do is make it clear that they are partners with users. IT is there to provide guidelines on cybersecurity and compliance, not slow them down in their quest to improve customer offerings.
That way, he said, “they’ll come and say, ‘Hey, we’re going to look at X service,’ or ‘We’re going to implement Y. How can you help us out to be faster than us just doing it on our own?'”
‘They can do it’
There once was a time, Moseley said, when IT didn’t have to focus on new technology. Instead, it set up the tools it had or ones it knew about. “You didn’t really think about it because you had a locked-down environment, and there were no options.”
Today, in a fast-moving, technology-driven business climate — and in a company where the business model is built on a digital transformation strategy — that’s not the case.
“Now if you don’t partner with your users,” Moseley said, “they’re going to bring in their own [technology]. They can do it. You’ve got to make those partnerships. You’ve got to stay on top of things.”
Mark Moseley talks more about Rosetta Stone’s digital transformation strategy in this SearchCIO interview.
CIOs are on to the next new thing. From virtual reality technology to artificial intelligence to digital business, CIOs are educating themselves on all of it, according to this list of the best-read Data Mill columns in 2016. I take this as a very promising sign indeed, for the new year will almost certainly require new ways of thinking and new solutions to meet business challenges.
This roundup is a curated collection from SearchCIO’s Data Mill series, a column created in 2013 to capture “all things data,” as the tagline used to say, in particular the revolutionary impact of big data on business strategy. Looking back at this year’s greatest hits reveals just how much the big data conversation has changed in the span of a few years.
In 2014, the best-read column was a piece on Hadoop, a distributed file system that has become synonymous with big data. Last year, Spark, which processes big data in memory, ranked best. This year, the interest was more nuanced, with AR/VR and AI tech taking top spots.
1. AR/VR will change the way you work
Collaboration software tends to be a thorn in most CIOs’ sides. It can be intuitive, but if employees don’t use it, the investment is a waste. That pain might be eased with augmented and virtual reality technologies, which are poised to change how work gets done in the enterprise, according to two Deloitte Digital consultants. In this column, they describe the role CIOs will play when enterprises adopt AR and VR tech.
2. Bimodal IT doesn’t go far enough
CIOs who are undergoing a digital business transformation are likely familiar with bimodal IT, a term coined by Gartner. Bimodal describes a strategy that separates IT projects focusing on the delivery and maintenance of reliable, industrialized IT services from those innovative, fast-moving projects that require agility. Last spring, Forrester threw shade at the concept, advising that bimodal IT doesn’t go far enough. This column takes a look at Forrester’s research.
3. Define AI tech before investing
The first thing CIOs need before investing in artificial intelligence technology is to understand what AI tech means. Tom Davenport, renowned analytics expert and President’s Distinguished Professor of Information Technology and Management at Babson College, says CIOs will need to “disaggregate” the term, especially for C-level executives. He explained what he meant during a fireside chat with Vikram Mahidhar, senior vice president of AI solutions at RAGE Frameworks Inc., at this year’s EmTech, an emerging technology conference hosted by the MIT Technology Review. This column covers the highlights.
4. CFOs on when to renew or replace software
CFOs are changing the way they assess technology investments. Instead of gathering requirements, they’re taking business capabilities such as skills and expertise into consideration. That’s a big change, Leslie Owens, executive director at the MIT Sloan Center for Information Systems Research, said at this year’s MIT Sloan CFO Summit in Newton, Mass. This column summarizes the discussion she moderated at the event.
5. The cloud or the edge? Depends on the use case
Basic analysis of the data created by an Internet of Things project is often done on edge devices such as smart phones, but that’s not always necessary. According to experts at the PAPIs event (a portmanteau for predictive applications and APIs), CIOs should first consider the use case. This story covers their discussion.
Phil Weinzimer has noticed a trend that will no doubt resonate with CIOs: These days, there are a lot more senior IT leaders out there. As companies realize technology is a core part of the business, they’re turning to technology experts like CIOs to lead a digital transformation. In some cases, CIOs aren’t waiting around for permission.
Weinzimer, author and IT consultant, ticked off several examples of CIOs who are proactively taking on the digital opportunity — from those who work with emergency rooms to the CIO of a candy company. They are examples of CIOs acting like business people, as they look for opportunities to integrate technology into customer-facing applications and change how the business interacts with its customers.
Digital opportunity in the ER
Emergency rooms are hammered for their inefficiencies. Patients are shuffled through a hurry-up-and-wait process, undergoing tests and seeing multiple healthcare professionals to get treated, Weinzimer said. The nurses who manage ERs often have limited insight into what’s happening. “The nurse doesn’t know, for example, how long a patient has been in a room without seeing a doctor. They don’t know when they need a certain piece of equipment,” he said. “So managing an emergency room is a very reactive process, although they use technology to manage all of the scripts and the medical tests that need to be done.”
That changed for a hospital in northeast, Pa., when Steve Heilenman, CIO at Computer Aid Inc., developed a solution to rid the ER of inefficiencies. Upon check in, patients are given a pin, a small digital device that records their movements and where they are at any given time. The healthcare professionals also wear the digital device. “Now when a patient gets into a room, the charge nurse knows how long they’ve been there without seeing a doctor,” said Weinzimer, who asked that the name of the hospital not be named.
The hospital uses a set of metrics based on the medical issue that a patient has, and they are triaged accordingly. It also uses a set of standards to ensure patients receive care in a timely manner based on their diagnosis.
The new process, developed by the CIO and his staff, has been in place for a few months, and the ER has found that “patients are being seen more often, that there’s been a significant improvement in the care that’s being provided, and patient satisfaction is going up,” Weinzimer said.
Digital opportunity in tomatoes
Digital transformation of an ER was inevitable. But CIOs are also having an impact at other kinds of companies. Peter Forte, CIO at Analog Devices Inc., a company that makes integrated circuits, has given new meaning to the term IoT: For one Analog project, IoT is the Internet of Tomatoes.
“The way you determine that a tomato has ripened to the right chemical composition is that you’ve got to cut into it,” Weinzimer said. Analog Devices is working with tomato farmers to build a digital platform that tracks the environmental conditions tomatoes are grown in, which affects the quality of the tomato. The platform will provide real-time updates to farmers, informing them if they need to, say, water the plant more or less to ensure optimal growing conditions. “Here’s a CIO who is really coming up with new ways to integrate technology in their products,” Weinzimer said.
Even the candy company Just Born, best known for its marshmallow confections called Peeps, is turning to digitization. “They’re basically a manufacturer, but they’re now starting to want to engage with their customers,” Weinzimer said. In fact, Just Born has just hired a new CIO, Rachel Hayden, whom he describes as “ambitious, smart as a whip, very business focused.” The maker of Peeps may be looking at big changes ahead. On her LinkedIn profile, Hayden, who has an MBA, describes herself as a “transformation IT executive” with proven experience of “shifting the operating model and culture of IT organizations from cost centers to proactive enablers of business growth.”
Digital transformation means different things to different departments, according to new research out of Deloitte LLP. Marketing, sales, customer service and even finance often see digital as customer-facing tools and applications. But that’s only the tip of the iceberg, according to Deloitte.
“What many business leaders currently regard as ‘digital’ is predominately the part of the iceberg that shows above water,” states the Navigating legacy: Charting the course to business value report. “What lies below is often legacy systems, a rigid organizational culture, and antiquated processes that have encumbered the shift toward digital.”
The Deloitte researchers encourage CIOs, whom they describe as being best positioned to see the entire iceberg, to step up and help get everyone on the same page. In that vein, here’s how two CIOs, who took part in Deloitte’s research, define digital at their companies.
Cause and effect
Vittorio Cretella, CIO at Mars Inc. in McLean, Va., defines digital in terms of cause and effect. The causes include massive amounts of data, the consumerization of IT and the availability of more computational power thanks to the cloud.
The combination of data and technology affects not just “the digitization of commerce,” Cretella said, “but also the digitization of operations.” For that reason, the business model of Mars, a company founded in 1911, is changing to take advantage of digital technologies. He is currently looking at artificial intelligence technology, including robotic process automation and cloud services from IBM Watson, to automate business processes. Technologies like these will also help to democratize analytics by “spreading knowledge across the company that allows our talented associates to make faster decisions and better educated decisions,” Cretella said.
So, when he talks about the concept of digital, he makes sure to talk about the digitization of commerce, of operations and of the business model. “It touches all sides of the business,” he said.
Knocking down silos
At NuVasive Inc., a medical device manufacturer aiming to make spine surgeries less invasive, digital is the lifeblood of it business model.
“Digital doesn’t just mean we’re going to put a website up,” said Johnson Lai, CIO at the San Diego, Calif.-based NuVasive. “Digital means the entire flow, all of the way through the organization and looping that back around to a commercial goal.”
NuVasive’s digital-based business model, which includes applications and digital platforms, requires IT and the business to work closely together. “Those conversations and decisions are becoming so depending on each other and each other’s function, that I think all C-level individuals are now knowledgeable in each other’s silos, so to speak,” he said.
The new reality means it’s not unheard of for the CFO to spend two days at an IT conference with Lai. And vice versa, if warranted, he said.
As vendors rake in revenues from software-as-a-service subscriptions, CIOs could see their SaaS costs rise 10% to 15%.
A new tech spending forecast from Forrester research advises CIOs to negotiate caps on price increases in cloud software agreements — and to evaluate alternatives to current vendors when contracts expire.
The problem, Forrester analyst Andrew Bartels said, is SaaS agreements are often structured “in ways that in fact don’t provide downward flexibility of costs — [they] only provide upward flexibility.”
So a contract with a vendor may allow for prices to rise as IT adds more users to an application, said Bartels, who wrote the report. What they don’t do is decrease if the number of users goes down. And many of those contracts last for three years.
There are other aspects of SaaS that box CIOs in on cost. When an organization owns the servers that its business software runs on, it can stop paying maintenance on it, for example, to save cash, Bartels said. Or it can decide not to do an upgrade. Not so with SaaS.
“Any time you’re using SaaS, any time you’re using cloud, you don’t have the option of stop paying because as soon as you stop paying, you lose the technology,” Bartels said “You’re renting it.”
Rising SaaS sales, SaaS costs
The attention to contract details and exit clauses is particularly important going forward, Bartels said. SaaS sales are expected to rise in 2017 despite uncertainty surrounding President-elect Donald Trump’s policies on international trade deals and immigration. But this is not the case for all tech sales. Indeed, the Forrester report lowered its pre-election forecast of 5.1% growth in tech spending to 4.3%, as companies remain cautious about investments.
Swelling SaaS sales reflect Forrester’s projection that sales of “business technology” — that is, technology that aims to serve and keep customers and win new ones — will also grow by 7.7% in 2017. In contrast, IT spending is expected to increase by 2.8%.
“The type of uncertainty that we’re facing becomes an incentive for firms to adopt cloud perhaps more rapidly than they might otherwise adopt it,” Bartels said. A heightened adoption rate of cloud sharpens the challenge for CIOs.
“One of the downsides of cloud technology is the potential — unless you are careful, unless you negotiate carefully, unless you create exit paths — that you’ll be trapped into agreements where your cost rises over time and doesn’t in fact either flatten out or go down in tough times as you might like it to,” Bartels said.
Chief data officers are gaining organizational clout, according to a new report from Gartner. Researchers at the consultancy found that companies are establishing a data office, what they refer to as “the office of the CDO,” complete with staffing, budget and specific responsibilities.
“This is a new business function, equal to IT and HR, finance, supply chain and any of the operations departments,” said Jamie Popkin, a Gartner analyst and co-author of the new research, which is based on interviews and online surveys with 180 chief data or analytics officers or others who hold a high-level data and analytics position.
The consultancy’s first survey of chief data officers was qualitative; the current report, Survey Analysis: The Second Gartner CDO Survey – The State of the Office of the CDO, is a quantitative study, with researchers looking to consider the merits of eight CDO hypotheses, including the organizational structure of the role itself.
“What we’re seeing is that, increasingly, there is an office of the chief data officer run by a chief data officer,” Popkin said. “And the chief data officer generally is having a very broad scope of responsibilities.” Because the position cuts across an organization, Gartner predicts CDOs will use the position to propel themselves into another C-level role in just three years.
The office of the CDO
Chief data officers are often brought in as governance gurus. The position was born out of the financial industry, in which companies have heavy compliance and regulatory requirements, Popkin said. Since its emergence in finance, companies such as those dealing with sensitive data or are transactional-heavy have also taken to the chief data officer role.
Researchers found that more than half of the respondents (54%) have a fully or partially implemented office of the CDO; another 20% are exploring or planning to implement one within the next year. The office of the CDO is still a relatively small one — no more than 24 people, according to 61% of respondents. But, as the report states, “with people and programs [come] budget.”
The average budget globally for the office of the CDO is $6.5 million, with North American companies budgeting more than twice the amount of their European counterparts.
The CDO’s unique perspective
Ensuring data quality, information strategy and master data management were and are primary responsibilities for CDOs, according to the research. But the potential impact a CDO has on the organization extends beyond keeping corporate data in order. Popkin said CDOs are uniquely positioned to be change agents and, as such, break out of the chief data officer role and into another influential C-level position.
Because they’re tasked with looking across the organization, CDOs understand how things operate, where there is resistance to change and why there’s resistance to change, and they can help groups change the way they do things, according to Popkin. They can shine a light on when and where a process or business model breaks down.
The experience they gain from helping transform an organization sets them up for future C-level positions such as a chief marketing officer, chief operations officer and even a chief executive officer. Indeed, Popkin and his co-researchers predict 15% of CDOs will begin to parlay their expertise into another C-level role by 2020. “I think someone who has that ability to work across all of the administrative functions is actually demonstrating the personal and professional maturity you might expect in a CEO,” Popkin said.
He pointed to the turnover they’re already seeing among the chief data officer role — not due to failure but due to demand — as a piece of evidence behind their thinking. “We think there are already bidding wars going on for top CDOs who have demonstrated their capability,” he said.