In 2016, nearly every successful company depends on data in one way or another. Business owners know how significant data analysis can be, but does that mean it’s necessary to have a chief data officer on staff?
This question is laying heavily on the executive minds, as the falling dollar and tight economy makes it necessary to make the most of company budgets. However, recent studies have found that nearly 45% of global firms already have a chief data officer, with another 16% poised to join that number over the course of the next year. Should your company take the leap and join these ranks? Here are just a few things to consider about the necessity of the CDO.
What Is the Role of the CDO?
While the role of chief data officer has been in businesses for a while, it’s only recently with the emergence of big data and corresponding analytics that the position itself has become so crucial. As a whole, the CDO of a company is responsible for a company’s data management initiatives, whether that has to do with data processing, analysis, mining, or information trading. The role of CDO ensures the quality of the data that a company is producing, as well as devises strategy for risk management based on analytics derived from that information. In essence, a skilled CDO can turn captured data into action.
Without a chief data officer to provide strict, data-based outcomes, many of a business’s decisions are essentially made on the basis of a “gut feeling” or any previous experience in that area. For most smart business owners, it pays to back up your decisions with the hard evidence of data and analytics. Complimented by experience, expertise and those “gut feelings,” CDOs can provide a laid out tangible strategy for tackling difficult problems. This makes better risk management much more feasible for companies, with mathematical predictions and strategies based on hard data.
Proper data assessment can lead to greater efficiency in a company by creating a more specific target. While many issues that companies face today are multifaceted and complex, the analytics that a CDO can provide will give businesses the support needed to make better, more successful decisions.
Data is a critical asset to more than just problem solving: without good data, business won’t have a proper hold on their inventory, cash, buildings, personnel, and accounts receivable. When every facet of a company depends on the collection of information, the role of CDO is critical for the health of an organization. The misinterpretation of this information can lead to the failure of a company, while proper data analytics can help it thrive in a tough economy.
What Does This Mean for Your Company?
At the end of the day, your decision whether or not to hire a chief data officer depends on your business’s priorities. Sitting down and going through an exercise of internal reflection and customer analysis can help you decide whether or not a CDO is a necessity for the health of your organization. Understanding what your desired commercial outcomes are and what data’s role is in achieving those goals is the first step to making your decision. If, after all of that, you decide that data is central to your business’s priorities, hiring a CDO does indeed make sense for the future of your company.