AWS Cloud Enterprise Strategy Blog
What’s top of mind for Chief Data Officers going into 2024?
One year ago we published our first research report on the role of Chief Data Officers (CDOs). The renowned Tom Davenport, in partnership with MIT Chief Data Officer and Information Quality Symposium (CDOIQ), was commissioned to conduct a global study of CDOs across industries, tenures, and stages of the data journey. At the time I made some observations on the evolving CDO role in my blog post, focusing particularly on how success should be measured and the need to consider cultural transformation as integral to the role.
Forward winding a year, we find that a lot has changed in CDOs perceived role as well as the environment in which they operate. Generative AI has captured the public imagination and piqued particular interest at the most senior levels of organisations. It has been a double-edged sword, emphasising the criticality of data while potentially distracting from the blocking and tackling required for a solid data foundation.
It’s timely that our second report digs into what has changed for CDOs over the year.
Research Methodology and Demographics
The latest report includes 334 survey responses from CDOs and equivalent roles distilled into insights, along with qualitative interviews with 12 leading CDOs. Participants span every geography and multiple industries, with over half of respondents working in financial services, healthcare and life sciences, or the government. Last year 23% of CDOs reported to the CEO, but this year has seen a 3% drop. It is perhaps statistically insignificant but a trend to keep an eye on given most successful transformations require top team focus.
Rather than repeat the report’s results, I’ve selected three standout observations to share.
Capitalise on Generative AI to Create Excitement and Focus
The excitement (and hype) of generative AI has created a halo effect for CDOs, opening up their peers and boards to talk about topics they might have previously shied away from. A near majority (46%) of CDOs also recognise that foundational data quality and good use cases are fundamental challenges that must be overcome to take advantage of this new opportunity. Unsurprisingly 93% of CDOs believe a practical data strategy is needed if organisations are to succeed with generative AI. What a great opportunity!
CDOs are balancing their peers’ excitement and demand to do something with the need to learn how to integrate generative AI practically into their organisations. Over 80% of CDOs indicated that they are experimenting with generative AI at an individual or organisational level. This has seemingly driven use cases that are visible, relevant, and impactful in areas such as software code generation, personal productivity, and customer support. This very much aligns with industry observations on the areas of greatest value, as my colleagues and I discuss on our podcast.
With nearly two-thirds (62%) of CDOs believing that they are right at the start of the generative AI adoption curve, I cannot think of a better opportunity to educate and captivate the upper levels of any organisation with a good, grounded understanding of how data, analytics, machine learning (ML), and generative AI are all intertwined.
Culture Is Front and Centre
The portion of CDOs for whom governance has become their top activity has increased by 50% year-on-year, but how this is framed seems to be changing for the better. While policies and processes centred on control are still considered important, enabling activities that empower and hold others accountable while giving them the skills to make good data-driven decisions are starting to come to the fore.
It is also heartening that three of the top five initiatives undertaken to create value with data relate to change management, a traditional derailer of transformations. It is no real surprise, given nearly 60% of the top barriers to creating a data-driven culture are … culture!
Just shy of a majority of CDOs take a pragmatic approach to improving their data infrastructure, tying this to business initiatives rather than their own silos. An increasing emphasis on data as a product – not as a new technical buzz phrase but as a way of garnering closer business engagement – is also highlighted in the results, a topic that links neatly to my third observation.
Transformation Is a Team Sport
Two related forces stand out in the report that emphasise the unifying role an effective CDO needs to play. First is the increasing recognition that the role’s value has to be reflected in the value that an organisation derives from data. In my view it’s simply not tenable for a CDO to believe they have “done their job” by putting the foundations in place. They must actively reach out across organisational boundaries to ensure that those near the proverbial coalface produce actioned insights.
Naras Eechambadi, the Global CDAO of Universal Music, says it most eloquently: “People in this job talk about metrics and value, but I think the real value add is making other people successful…It’s their numbers, not my numbers.” There is still work to be done here, given that only 44% of CDOs define their success as achieving business objectives.
The second force will bring down the old walls of the “department of everything data” – standalone reporting factories that churn out reports without an eye on the actual value achieved. Yes, it’s generative AI again. Those effectively using what is now amusingly called “normal ML” recognised this years ago. You cannot reengineer or replace business processes in isolation from those intimately involved in those processes. Engaging individuals who bring practical knowledge and insights critical for making changes are the make-or-break factor when implementing reimagined processes. Raj Nimmagadda, CDO for R&D at Sanofi, and Diana Schildhouse, CDAO for Colgate-Palmolive, observe in the report that senior-level active engagement is also critical when technology is applied to improve a value chain.
It Can Be Lonely Leading the Way
The role of the CDO is similar in many ways to that of Thomas Edison when he lit the first street light in the 1800s, as Ishit Vachhrajani describes in his blog post. It is a role undertaking a mission unclear to many. Nearly three-quarters of CDOs believe their role is even more misunderstood than last year. With technology and data permeating every aspect of organisations, it is not surprising.
Ironically 49% of CDOs have responsibility for AI and 42% for generative AI. The CDO has become an obvious and easy dumping ground for everything new involving data, but this added complexity can make the role even more ambiguous.
That said, optimism prevails in the report. 80% of CDOs recognise the transformative opportunity that generative AI presents, pushing the boundaries of their roles outwards and the ability to drive meaningful change upwards.
I encourage you to read and share the report with your colleagues. The insights from the authors, long-standing luminaries in the data arena, and the CDOs from many recognisable brands make it clear that the CDO role is in a unique place to drive change using data.
—Phil
How Technology Leads Can Prepare for Generative AI, Phil Le-Brun
Lessons from Edison’s Bulb: Using Generative AI to Light the Way for Business Transformation, Ishit Vachhrajani