As companies increasingly rely on key information when making business decisions, a growing number of them will leverage a chief data officer, according to Gartner. This trend will be even more pronounced in industries with stringent regulations such as insurance and banking, the research firm predicted.
Growing prominence of CDOs
While a recent survey conducted by Gartner forecast that 25 percent of organizations will have a CDO by 2017, that figure will be 50 percent in sectors with a tougher regulatory environment. Because many chief information officers are already coping with a rising number of tasks, having a top data officer to take charge of key information will become even more important.
“25% of organizations will have a CDO by 2017.”
These CDOs will certainly not take this burden away from the CIO completely, as Gartner asserts the two corporate officers should work together to ensure their organizations derive the greatest possible value from their existing data. While this information has become increasingly important to the continued expansion of many companies, its complexity has also risen, making proper utilization increasingly difficult in many cases.
While this intricacy has increased, many other factors have combined to make it more challenging to harness data in an optimal manner. For example, many companies are suffering from low-quality data, and Gartner has estimated that organizations face an average expense of $13.5 million per year because of this particular shortcoming.
A wide range of firms are incurring high costs for this information, regardless of whether it suffers from low quality. For example, many buy-side firms have been encountering rising expenses associated with their benchmark data.
There are several factors contributing to this development. Vendors are charging more for this information. In addition, clients are placing greater demands on these institutions to harness a larger number of benchmarks to evaluate performance. These buy-side customers are also placing pressure on these buy-side firms to use customized benchmarks.
Data governance difficulties
Companies on the buy-side are also facing data governance challenges. These difficulties could range from problems obtaining the buy-in of staff across the organization to disputes about what format this information should have.
Gartner cited several other potential roadblocks, noting that most organizations have not established a universal way to comprehend business information and any semantics involved. As a result, the different groups within these companies could have varying definitions for the same data. Another potential difficulty could stem from an organization failing to optimize this information for different departments and business units.
Having the right context
While these challenges may seem daunting, the CDO has several different ways to tackle them, Gartner emphasized. Having the right context can make a huge difference. While not all firms realize it, data management is just as integral to a business as financial management or technology management. Debra Logan, vice president for Gartner Research and Gartner Fellow, summed up the role of this executive nicely.
“The CDO is a peer of the CIO, but practices a different discipline,” she said. “The CDO also becomes an advocate of information, not just a governor of it. Increasingly, successful information governance is about advocating the use of information as a source of value, not just controlling and monitoring it.”
- RIMES in the Time of Corona: Making Sense of Volatility
- Asset Management Firms are Changing their Data Management Approach in Response to Increasing Market Data Costs, RIMES’ Survey Reveals
- COVID-19 and ETFs: July Market Update
- Comprehensive ETF Data Now Available on RIMES Online
- BMR and the US: What We know