Optimising financial processes

Posted on:

8 Ways Leaders Can Demonstrate Business Value From Data Strategy

I read an interesting article in the MIT Sloan Management Review today.

Titled “8 ways chief data officers can demonstrate value” by Beth Stackpole, it details many of the recommendations from the renowned Tom Davenport, visiting scholar at the MIT Initiative on the Digital Economy and a senior advisor to Deloitte Analytics.

The phenomenon of the Chief Data Officer (CDO), not to be confused with the Chief Digital Officer (CDO), has a much reported, notoriously short job tenure.

The article tries to explain why and what to do about it.

The Chief Data Officer is a fast-growing executive title, but the position remains ill-defined, and there is little consensus about where and how the role adds business value.

That should worry anyone hiring or applying.

I often wonder what the early 19th century industrialists would have thought about a “Chief Electricity Officer” in their companies . . .

But I digress . . .

One of the often quoted “business value challenges” for the Chief Data Officer is the tendency for it to become a technology focused role, working on data management, moving data to the cloud, migrating data warehouses to data lakes, data mesh etc, all expensive, time-consuming — and prone to failure.

Data governance — which often involves urging change-resistant colleagues to alter their behavior — topped the list of CDO responsibilities.

The article offers 8 ways to demonstrate value.

I would suggest there is one.

Focus on Business Value. Start with Why.

If you want to attract attention (of the right sort!), business value needs to be directly associated with one of these 4 levers (thank you to Phil Priest for these!).

  • Revenue & Customer Growth
  • Operating Margin Growth
  • Improving Asset Efficiency
  • Deliver Outcomes that Exceed Expectations

What specific outcomes do we want to achieve with data? Can we apply the Pareto Principle (80/20 rule) to delivering that business value?

The CDO that is successful in building a strong coalition of stakeholders, identifying business value, delivering fast and keeping aligned with a dynamic business environment will have a long and healthy career.

Focussing on genuine business value (in the eyes of leadership and stakeholders) is the key.

The 8 suggestions in the article are summarized below. The highlights directly relate to rapid delivery of business value. The others should follow your early successes;

  1. Add an “A” to the CDO title – and take responsibility for analytics and artificial intelligence
  2. Embrace data products  
  3. Measure and document results
  4. Build relationships with business peers
  5. For low-maturity organizations: Zero in on a few use cases
  6. For high-maturity organizations: Build out analytics/AI infrastructure
  7. Focus on governance without the baggage
  8. Create a data-driven culture

You can read Beth’s source MIT Sloan Management Review article here . . .

Thanks for reading . . . .