The CDO Imperative: From Process Centric to data-driven
By Satyen Sangani
Published on February 20, 2020
Innovating inside of established companies has always been challenging. Being “established” is synonymous with having a proprietary, scalable, and, likely, profitable way of doing things.
Change is risky; change is expensive, and change is disruptive.
Over the last 20 years, CEOs, CIOs and their enterprise IT departmentshave sought to define business processes and build the systems needed to operationalize and codify how people work together. Investment in business processes has become synonymous with “doing it better.” As a consequence, modern enterprises have hundreds if not thousands of different applications. In the back office and manufacturing, organizations invested in enterprise resource planning (ERP) software. On the front-end, organizations invested in customer relationship management (CRM) software. Ironically, along with the desired efficiency, all of these processes, systems and applications have created unwanted complexity. Along with the traditional barriers to innovation, brittle and complicated information technology infrastructures are a further inhibitor.
Chains of habit are too weak to be felt until they are too strong to be broken – Samuel Johnson.
Data: Fertilizer for Innovation
Any change requires a minimum of two ingredients: the recognition of the need to change and the willingness of those in power to make change. In a complex system, recognizing that there is a problem is exceedingly difficult. Making the commitment to solve the problem is sometimes even harder.
Data helps with both of these challenges.
Data is the mechanism for resolving questions. Whether the question is about a new feature or a new market, data provides the evidence — the scientific method for validating a hypothesis — that drives the company forward. In a hierarchical organization, ideas are generated at the top and flow down. In a data-driven organization, ideas and solutions can come from anywhere. This is why the investment in data is far less about technology and process and much more about culture and people. Investment in data is a signal that the company is investing in the ability to change rapidly and in response to what the market requires, rather than solidifying processes that optimize what the company is already doing.
The Role of the Chief Data Officer (CDO)
Increasingly, Chief Data Officers (CDOs) are the leaders tasked with harnessing data to drive the business forward. Initially, CDOs were funded to ensure compliance in industries like banking, finance, insurance, healthcare and government. Today, the scope of the CDO is shifting toward empowering data-driven organizations. With this shift, CDOs are now prevalent across industries. Gartner notes that most industries already have CDOs, and predicts that by 2019, 90% of large organizations will have hired a chief data officer.
To succeed in this mission, CDOs must break down the culture of process and replace it with a culture where everyone can access data both to recognize problems and to build commitment around solving them. Reed Hastings, founder of Netflix, calls this “first principal thinking.” In a first principal world, every employee has the remit to question decisions, strategies, and the status-quo. Every person can act to improve the organization.
Building such a culture is easier said than done. Hurdles quickly emerge. Organizations are inundated with data, and finding data in itself is a problem. When data is limited to small teams, tribal knowledge might suffice, but add more data and the more people searching for data, and individual knowledge quickly reaches its limits. Once the data is discovered, people must also understand its context. Why was it created? What was it used for? Is it right for the analysis at hand? Is it accurate? Can I trust the data that I’m seeing? Finally, and most importantly, how do you get people to understand that their ideas are opinions and hypothesis?
A Single Source of Reference
A data catalog has emerged as a core component of modern data organizations and key for CDOs making the transition from process-centric to data-driven. At the core, the best catalogs do three things. They enable people to find, understand and trust data. While building software that enables these benefits is difficult, the quality of these benefits is what really matters. Amazon and Circuit City both provided electronics, but Amazon’s search, product description and ratings were so far superior to its competitor — Amazon’s catalog won in the end. In essence, a catalog stores every product and every bit of memory surrounding those products. Have an idea for what to buy? Go to Amazon to see what others think. Have an idea for a new product to build or a new market to enter? Go to your data catalog to see what work others have done on the exact same idea. Or, go to your data catalog to find out the trusted answer to a question someone has already asked.
Over the last four-plus years, we’ve consistently invested in user interface design and product robustness. At the start of our journey, we had no idea what combination of search, descriptions, crawling, indexing, interface design, and algorithms would enable people to most easily find, understand and trust data. We had to learn from our customers at BNSF Railway, eBay, General Electric, Munich Re, Tesco, Tesla, Safeway, Wells Fargo and many others. Leveraging artificial intelligence, we automated the ability to crawl, parse, and index all of an organization’s data — including information in BI tools, wikis, and usage logs – enabling a single catalog to empower people to work better together with a diverse array of data assets.
With Alation as the single source of reference for an organization, CDOs enable people to understand the shape of the data set, where it came from, whether it is up-to-date, who else has used it, and how it was used. The catalog draws on third-party information to verify whether the data can be trusted.
Today, CDOs in a wide range of industries have a mechanism for empowering their organizations to leverage data. As data initiatives mature, the Alation data catalog is becoming central to an expanding set of use cases.
Governing Data Lakes to Find Opportunities for Customers
Munich Re is one of the world’s leading reinsurers. Munich Re’s chief data officer is leveraging Alation in a highly regulated market to find better opportunities for customers in an industry where knowledge sharing directly leads to customer value.
“At Munich Re, our data strategy is geared to offer new and better risk-related services to our customers. A core piece in that strategy is our integrated self-service data analytics platform. Alation’s social catalog is part of that platform and already helps more than 600 users in the group to discover data easily and to share knowledge with each other. With Alation in place, we expect time to insight to go down significantly,” said Wolfgang Hauner, chief data officer, Munich Re.
Improving the Democratic Process with Open Data Stewardship and the Internet of Things
While the drive to gain value from data is often thought about in dollars and cents, data is also critical to improving highly valuable civic organizations. The City of San Diego’s chief data officer is leveraging Alation to drive the city’s most progressive initiatives.
“Improving the democratic process through the sharing of information with the public is a top commitment for Mayor Faulconer and the City of San Diego. Creating an open government requires effective data discovery and management. Alation is a key component of our data-driven strategy, enabling constituent visibility tools, like StreetsSD, and allowing us to provide staff with accurate and up-to-date information,” said Maksim Pecherskiy, chief data officer, City of San Diego.
Modernizing Data Environments for Trusted
eBay is one of the world’s largest and most complex data environments. It is also one of the most self-service oriented. With Alation, eBay is moving from a traditional approach to governing analytic processes through heavily engineered metadata systems, to the new world of delivering trust with more agile, self-service analysis.
“Alation is taking us from an older approach of prepared dashboard and analytics to where people want to go today. With Alation, people can put their hands directly on data, understand the meaning of the data and the value of the data and do something productive,” said Deb Seys, senior product manager, eBay.
The Road Ahead
In a recent Wall Street Journal article, Deborah Rubin, a senior partner at RHR International, succinctly illustrated the change most companies are grappling with today:
“The typical CEO of a major company a decade ago resembled a ship captain ‘who could rally a group of people with a lot of process and procedures,’ said Deborah Rubin, a senior partner at RHR International, a leadership-development firm. ‘Today’s CEO has to be much more like a race car driver,’ she added. ‘You have to do the sharp maneuvers.’”
Just like every race car needs an instrument panel, a complex enterprise needs data it can trust. To be successful, CDOs need a single source of reference for all of an organization’s data to make the sharp maneuvers — the strategic, organizational and cultural transformation required to move from being process-centric to data-driven.
As strategic leaders in this transformation, CDOs are embracing data catalogs as the keystone element in the delivery of a range of strategic initiatives. As more companies realize the value of a data catalog, Alation is becoming the driver for a growing number of initiatives from analyst productivity and information stewardship to data governance and GDPR compliance.
- Data: Fertilizer for Innovation
- The Role of the Chief Data Officer (CDO)
- A Single Source of Reference
- Governing Data Lakes to Find Opportunities for Customers
- Improving the Democratic Process with Open Data Stewardship and the Internet of Things
- Modernizing Data Environments for Trusted
- The Road Ahead