Emergence of the Chief Data Officer (CDO): How ITSM Will Be Affected
Within an IT organization, there are many different functions. I have attended meetings with a CIO and the different entities from the IT department. These meetings often become contentious as people fight for resources to support their objectives.
For example, those tasked with securing the network might want more control by taking away access from end users, while IT support raises concerns about increases to call volumes if the new security policies are applied.
Furthermore, resources and budgets are limited, making it difficult to support every project that each IT group requests to meet their objectives. However, decisions need to be made.
With limited budgets, some projects are funded and some are not. Unfortunately, many executives continue to make decisions based on intuition instead of readily available data. This can endanger the future of an entire organization.
In a gated report, Gartner predicts that "through 2020, over 95 percent of business leaders will continue to make decisions using intuition, instead of probability distributions, and will significantly underestimate risks as a result.”
To understand how dangerous intuition can be to an organization, one only has to look at the evolution of Netflix over the past 10 years. Netflix has crushed corporate giants based on a strategic decision that took them in a different direction over all of their competition.
What did Netflix know about the future? They understood how technology would one day be used to deliver entertainment to every home based on trends and analytics. Large competitors ignored the analysts and the data. The “intuition,” that people would not abandon the local store experience was an error in judgment that was not supported by the data. The data not only showed a decline in store rentals, it showed future increased bandwidth offerings to every home, and a cultural change (Gen Z) fueled by mobility and social media. The data indicated what customers wanted, what future customers would want, and the technology that would deliver.
Today, organizations are not only realizing the value of their data, they are also starting to treat their data as a company asset. Hence, the emergence of the Chief Data Officer (CDO).
The new CDO executive role will be charged with exploring how the data can be used for the benefit of the organization. The CDO will apply market and industry knowledge with a “technical” understanding of the organization’s data.
Gartner claims that “the race to drive competitive advantage and improved efficiency through better use of information assets is leading to a sharp rise in the number of chief data officers (CDOs). As a result, Gartner predicts that 90 percent of large companies will have a CDO role by the end of 2019.”
Although the responsibility of the CDO could vary across different companies and government agencies, we can expect the role to include data governance, data analytics, and data technology.
Data governance includes standards and processes to ensure consistency, accuracy, security, and availability, while data analytics is about interpreting the data using business intelligence tools and reporting. The data technology refers to software and hardware tools as well as IT’s architecture and integration capabilities. Tools and architecture need to be in line with the business strategy; all of which will fall under the responsibility of the CDO.
How does the CDO impact IT Service Management?
IT Service Management organizations are responsible for supporting IT throughout the entire organization. We can expect that the CDO will play a large role in how the IT Service Management organization is structured, integrated, and executed. Data provided by ITSM tools will be vital to the CDO role with regards to data governance. Analytics and metrics provided by ITSM tools will help the CDO determine any risks to the organization as new tools, processes, and policies are applied from the IT department.
The data provided from the ITSM tools will also be valuable to the organization when defining IT strategy and architecture. Data provided from ITSM reports can help the organization choose the right software and supporting hardware tools that support the business strategy.
For example, imagine if you were trying to determine if your organization wanted to use tablets to support one of the business units. A pilot program is created with a team using the tablets and a team using traditional PCs. ITSM reports will provide data that includes how much time was required to support both teams.
Although the CDO will pull data from various places within the organization, ITSM reports will be essential for the CDO when determining strategy regarding IT. Even when IT objectives are met with the desired software tools, they are not sustainable if they are too expensive to support.
Data provided from an ITSM software solution is critical for the CDO to properly do his/her job. Without accurate ITSM data, the CDO will need to make assumptions about supporting costs and risks when implementing new technologies, processes, policies, security, and architecture.
The new CDO role will have a direct impact on IT service management organizations because the decisions regarding ITSM tools, ITSM structure, and ITSM processes will need to be aligned with all IT entities and with the overall business strategy which will be governed by the CDO.