Seven Habits of the Highly Effective CDO and why the Chief Operating Officer of the INTELLIGENT BUSINESS is the CDO.

The Chief Operating Officer of your future business should be your Chief Data Officer???Why?

For 15-20 years Banks and other organisations have promoted Chief Information Officers into the Chief Operations or Chief Operating Officer role and a key member of the Executive Committee.

• CIO’s have been automating the processes of the business and therefore have a broad understanding of the business, and as automated processes are more efficient they contribute to reducing Costs of the business.
• Logic of the business is built into the Business Systems and those business Systems were designed around Processes (Supply Chain Management, Customer Relationship Management, Record to Report etc) so CIOs know better than most how the business works.
• Businesses have become Technology Enabled, meaning the majority of your Revenue, Cost and Risk sits in your Technology estate and hence your Technology Leader needs to be constantly advising the CFO and CEO on business performance issues and therefore logically at the CEO/Executive Committee Table.

In many cases, as technology has matured, and moved online/digital. CIOs have morphed into roles with the title Chief Technology, Chief Digital Officer or even Chief Transformation Officer.??Unfortunately, for most businesses their Digital initiatives have not delivered the transformation they required. The logic embedded in those systems became a barrier and not an enabler of agility (eg Banks still have Core Banking Systems with 30 or more year old code embedded within them). They largely added more technology and a ‘pretty’ web or App front End. They did not make the business more competitive, and start-ups increasingly ate our lunch.

The Seven Habits of the CDO

For the next 15-20 years your business needs to become Data Enabled.??Data is the missing link between People (the Decision Makers in your business and the Customers of your business), as well as Process and Technology.??As highlighted in my 4 into 1 triangle operating model, Data serves people and masters process and technology. In tribute to Stephen Covey’s 7 Habits of Highly Effective people, I offer (Eddie Shorts’) 7 Habits of Highly Effective CDOs (and Data Driven Businesses).

1. Customers are King (or Queen):??Data is central to understanding your Customers – the good company meets the needs of its business – the great company predicts the needs of its customers and designs products and services that meets those future needs.??That’s achieved by Data, Predictive and Prescriptive Analytical Models (Machine Learning and AI) and hence your Data Leader will be one of the critical Value Drivers of your business.
2. Masters of the?External Environment: Likewise, data is central to understanding our external environment and suppliers.??Those companies that live in highly competitive markets have already had to understand this, they use data and analytics to understand what competitors and new entrants are doing and aim to be at least one step ahead. As markets and environments become more and more volatile, all businesses need to be more agile and data is central to that.??
3. Building a Data Driven Business Model:??A Data Model will be central to your business operating model, as processes largely fold into the background.? The Data model should give uninterrupted line of sight between your Level 1 Key Performance/Results Indicators (like Revenue, EBITDA, Free Cash Flow) you report to Shareholders, and the underlying operational metrics of the business (Customer Lifetime Value, Cost of Goods sold, Employee Costs etc etc).?That model will be owned by your Data Leader.??For more on the Data Model (see below).
4. Delivering Dynamically Configurable Processes:??Processes will need to be dynamically reconfigured to meet the rapidly changing needs of customers and reconfigure what the business is delivering as Services.??We will do that with APIs, machine learning and analytics, all supplied by your Data & Analytics leader, and managed by your integrated Data Model.??After all, why do we integrate systems…. To pass data between them.??
5. Migrating to Micro Services:??As more logic moves into your Data estate, your monolithic business process systems (CRM, ERP, SCM etc) can be dramatically downsized and become what Technologists call ‘Micro Services’ – at a fraction of the cost.??Most software today is bloated and massively over engineered. Micro Services delivered the essence of key features and functions, ensuring that your business buys and pays for what it needs, whereas today we typically use less than 20% of the software we've paid for. The Data Leader by driving the move to dynamic processes and micro-services, is therefore at the heart of the Cost agenda of your business.
6. Technology and Data in the Cloud:??Your Technology Estate is increasingly sitting, not in your premises, but in the Cloud, and your Technology Suppliers are managing the Costs and Risks around that…. Your Technology Leader overseas those relationships, an important tole, but no longer a source of competitive advantage of the business.??However, with your Data available in one (or multiple cloud platforms), and liberated from the control of your 'enterprise systems providers', your business can take control of the Data Model and use that to drive agility across the organisation.
7. Data Strategy underpins Business Strategy:??Critically, your Data Strategy and more importantly the tactics and logistics you employ to execute upon it, will be at least as important as your People Strategy in delivering your business outcomes and the Data enabled Transformation the fundamental business change your business needs over the next 10-15 years!

The Intelligent Data Model

The importance of a Data Model requires some more discussion and investigation.

1. A data model sits at the heart of every major business system.??The problem for most companies is that model is owned by the software vendor and needs to customised by them to meet your needs.??As you move to a Cloud/MicroServices model, the company wide Data Model that your Data teams will have painstaking put together to connect your Data Warehouse, Data Lake (or even Data Mesh or Data Fabric) can be liberated from the software vendors and is controlled by your business.
2. The Data model is critical because you can build complete line of sight between your Level 1 Key Performance/Results Indicators (like Revenue, EBITDA, Free Cash Flow) you report to Shareholders, and the underlying operational metrics of the business (Customer Lifetime Value, Cost of Goods sold, Employee Costs etc etc). In the past most of those were derived metrics, now they only change as you dynamically configure your business using AI and Machine Learning.

Your Data Leader must understand your entire business, the digital operating model, the needs of your people and customers, the drivers of Value, Risk and Cost – in short, whether de facto or de jour they will be the Chief Operating Officer.??

• Most Data Leaders are not yet ready for this transition and in fact the majority are still reporting into Technology leaders.??
• We need to grow and develop our data leaders rapidly over the next few years so they can sit at the CEO table and advise the Board on the key issues that only Data can answer!