In order to drive competitive advantage from data-driven insights, chief data officers (CDOs) need to start by understanding the needs of their business partners and employees, said a new Forrester report, Chief Data Officers: Accelerate Insights-Driven Business Impact In 12 Steps, released Wednesday.
“The chief data officer (CDO) role has evolved to reﬂect the need to be insights-driven. Successful data insights leaders understand the needs of business partners and employ resources to deliver relevant insights and guide actions—translating insights into business impact,” wrote the report’s author Jennifer Belissent, Forrester’s principal analyst serving customer insights professionals.
According to the report CDOs need to:
1. Establish a mandate to drive the insights transformation with executive support. While 42% of CDOs already report to the CEO, they still need to achieve buy-in from others in the organization to make sure decision making based on data-driven insights becomes the new way of doing business.
2. Embark on a listening tour to understand the needs of business partners. In order to get a better understanding of how the organization can benefit from data, CDOs need to listen to their peers, focusing first on the critical business issues facing their organizations. This can include identifying high-value customers, reducing costs, and optimizing resources.
3. Establish a data insights council to facilitate collaboration and build consensus. Above all else, CDOs must have collaborators and facilitators, bringing together leaders from across the organization to bolster their cause and gain access to resources. One CDO quoted in the report said he was, “a one-man army that uses the rest of the firm.”
4. Prioritize potential projects based on strategic alignment and complexity. Working in concert with other stakeholders, CDOs should evaluate projects to understand their alignment with business strategy and the business impact they represent, including their complexity in terms of resources and skill required. CDOs should reassess projects regularly.
5. Assess technology needs to build an enterprise-wide data insights architecture. Because the CDO is responsible for the “end-to-end value chain, from data to insights and impact” they must drive a whole-of-enterprise approach to the infrastructure and analytics tools the organization will need to transform the status quo.
6. Deliver value quickly through iterative proofs of value (POVs). Like all new initiatives, to gain converts and demonstrate that data-driven insights can lead to valuable business outcomes, CDOs need to focus on short-term success; the proverbial low-hanging fruit. If quick results are hard to come by, focus on work in progress to demonstrate incremental value.
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7. Build a center of excellence (COE) with both centralized and embedded capabilities. Many data leaders report having small teams of direct reports but working with a larger data and analytics community across the organization. Where there are larger teams, data scientists are often embedded into the business.
8. Raise enterprise-wide data literacy and evangelize the value of insights. Because developing a more insights-driven approach to decision making requires top-down leadership, bottom-up incentives, and peer-to-peer collaboration, CDOs must launch change management and capacity-building programs. To ingrain this new approach into the organization, they should employ storytelling, multifunctional teams, and collaboration metrics.
9. Expand the community of insights-oriented practitioners. To build on their successes, CDOs should build a broad community to drive the insights-driven culture they have developed, while scaling data and analytics activities.
10. Build a catalog of data, digital assets, and best practices. Use data catalogs to promote the organization-wide use of data and the insights they provide.
11. Publish and promote the data and analytics services offered by the COE. CDOs can promote the data and analytics services they offer by publishing “menus” of the services they offer.
12. Establish performance metrics based on business value—and do a roadshow. While not all CDOs measure the impact of their services, they should. If impact is not measured, CDOs will find it hard to connect what they do to business value such as cost savings, improved customer experience, or revenue generated.