A key challenge for any data leader is to mount a compelling business case for investing in data. A newly-minted Chief Data Officer (CDO) will focus on creating a context-relevant, compelling roadmap. They typically enjoy a honeymoon period where there is a deliberate effort to invest in foundational data programs. But over time, this enthusiasm fades, and the CDO must pull multiple levers to ensure longer-term success.
There’s no doubt that today’s Chief Data Officer needs to be an effective lobbyist, given that data is a cross-functional asset, and the CDO rarely commands the authority other resource managers like CFOs and CIOs do. A recent article stated that an effective CDO needs to communicate “how an organization’s data strategy will achieve the business objectives and add value to all functional business units”… while disseminating a “data-driven mindset across to the entire organization, with buy-in from all levels.”
Most organisations are capital-constrained, and it is rare for a CDO to secure all the funding needed to fully resource the data program. It’s therefore critical to justify enough ‘direct’ funding to build the foundational data infrastructure, which underpins the program. This should be complemented by indirect funding from other technology programs which need the support of data to be successful. The proportion of direct and indirect funding typically changes over time, with indirect funding becoming a bigger and more important part of the pie over time.
Given that it takes years to build a mature data capability, how does a CDO ensure continued investment? From experience, there should be four pillars to long-term success.
- Business Strategy – Data (or analytics)
To be successful, the business needs to believe that data is critical to its strategy, and that data will provide, and increasingly is providing, value to the organisation.
- IT Strategy – Data architecture is a critical part of the enterprise IT architecture
The data leader must work closely with IT leadership to communicate how data infrastructure and capabilities underpin effective IT program delivery. We have found that a strong symbiotic relationship with the enterprise IT architecture group, with close alignment through a data architecture strategy, is more likely to result in an IT roadmap that supports the data strategy.
- Enterprise Program Delivery – Data as a partner in program delivery
Most organisations have will relatively continuous business and IT investment programs. These programs are justified based on the business value they will provide. While data is not generally a direct part of that justification, it is often an important enabler and integral part of the delivery. A strong alliance with the Project Management Office (PMO) and key IT leaders is critical to maintain ongoing momentum and leverage the value of the data strategy without having to source direct funding.
- Business Functions – Data Ops supporting business and functional objectives
Much of the benefit of the investment in data should be felt through the day-to-day operations of the business: through more sales, improved customer experience, and/or improved controls over risk and finance. The CDO must ensure that the data ops and analytics capabilities are actively working with and enabling functions across the organisation. Middle tier leaders can be very influential in supporting the data strategy.
Done right, 2+2+2+2 should = 16 not 8. Why? There is a multiplier effect of leveraging the four pillars: underpinning the business strategy, positioning data infrastructure as a foundational component of the IT strategy and program delivery, and data operations as the friend of business functions. Ensuring that all pillars are leveraged is the path to making a strong business case for data that achieves sustained investment, therefore maximising the opportunity for sustained success.