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Does your C-suite need a chief data officer? Peter Aiken thinks so

In a Q&A, consultant and author Peter Aiken explains why companies should put a C-level exec in charge of managing their data as a strategic asset.

At just about fifty pages, Peter Aiken's new book is certainly not long. But it does make a clear point: It's time for more organizations to start appointing chief data officers -- individuals who will join the CEO and the chief financial officer in the C-suite and become solely responsible for managing an organization's data as a strategic asset.

Aiken is a busy man. In addition to his role as founding director at Data Blueprint, a Glen Allen, Va-based IT consulting firm, he's an associate professor in the information systems department at Virginia Commonwealth University, and the president of DAMA International, a well-known association of information management professionals. Aiken co-wrote the new book, The Case for the Chief Data Officer (CDO): Recasting the C-Suite to Leverage Your Most Valuable Asset, with Michael Gorman, president of Whitemarsh Information Systems Corp.

SearchDataManagement caught up with Aiken recently to learn more about the book and find out why he thinks the time is right for the rise of the chief data officer. Aiken explained the importance of moving from an application-centric to a data-centric mind-set and talked about the chief data officer's role in that transition. He also offered a list of what he believes will be the characteristics of the most successful chief data officers. Here are some excerpts from that conversation, which have been edited for length and clarity.

Why do you think the time is right for more organizations to begin appointing chief data officers?

Peter AikenPeter Aiken

Peter Aiken: One of the hats that I wear is president of DAMA International, and when we look at our membership, we find that people who are in IT for about 10 years tend to get this epiphany, which states that if I can move from an application-centric to a data-centric posture in terms of my development work, everything will be faster, better, cheaper, at less risk.

But what I've done over the past 20 years is taught classes at the university, and every student in my classes has to do an assessment of two organizations' data management practices. We've looked at those results over the years; they are not getting better. When you go back and look at why, the reason is kind of obvious. If you are an IT, computer science or computer engineering student, you are lucky if you have one course in data. But most students have very little exposure to managing data as an asset.

Are you saying that the structure of the typical C-level suite is fundamentally flawed because of a general lack of exposure to managing data as an asset?

Aiken: Yes. The analogy I like to use is the case of Enron. When they were getting ready to crash and burn, at the very end, it was revealed that Enron had no cash controls in place. The very last straw that broke the camel's back was when they planned to merge with a company called Dynegy. As part of that, Dynegy brought a bunch of money to Enron. It was like billions of dollars in cash.

But for Enron, having no cash controls anywhere in the company meant that anybody in the organization could write a check for any amount of money. They blew through the cash in about week. Here is a company that is treating an asset in very inappropriate fashion and they blew through their asset very quickly. Well, data has turned out to be an asset. It's the sole non-depleting, non-depreciating, durable strategic asset for organizations. If you want to know who is in charge of data and the answer is 'everybody,' that's kind of like the Enron situation.

Why do you think there aren't more chief data officers in existence today?

Aiken: The first problem is that most people look around and see that there is somebody in the organization who has the title of chief information officer. Aren't they handling these things? With a label like that, you'd think that they were. But it turns out they are not -- or they're only doing it for a fraction of their time because they're also responsible for the email, for backup and recovery, for developing new systems and a plethora of stuff. Even if they are trying to pay attention to it, it's getting a fractional amount of their attention.

What exactly does a chief data officer need to do to achieve success?

Aiken: We've come up with three criteria for a chief data officer. We say that they must be dedicated solely to learning how to leverage the data asset in the organization. They also need to report directly to the business, and there is a very good reason for that. The IT group does not feel the pain of data problems. The business does, but the IT group does not. Consequently, there is a lack of understanding and a lack of appreciation for the role that data plays in the business.

The last part of it is that the organization has to recognize that data work must precede any systems development work. While everybody is out there trying to speed application development -- for example, going faster with their Agile development and Scrum and all the wonderful things that are going on in that environment. That stuff only works really well if you have predefined data components in a library ready to be accessed. You can't develop data using an IT project mind-set. It just doesn't work.

So, the key for the chief data officer is that this individual has to manage data as an asset for the organization. To do that, they need to be the head of the data governance group, which is a business-focused group, and they should work in close cooperation with either your chief technology officer or your chief information technology officer or whoever is doing the implementation work.

Why is it so important for organizations to switch from an application-centric mind-set to a data-centric mind-set?

Aiken: You have a strategy for your organization -- maybe it is everyday low prices, maybe it is a plan to make insanely great products. Eventually, you develop some goals and objectives. These are the things needed in order to achieve the strategy. If I'm making insanely great products, I've got to have some pretty good product engineering folks in place. Then another natural step seems to be to create some systems and some applications to implement those goals and objectives.

But that is where it breaks down. For example, if I buy SAP, then my network and my infrastructure has to be big enough and be oriented towards SAP. But if you start by defining your information needs based on the needs of the business, it results in cleaner systems design. And cleaner systems design means that you have fewer components to keep track of.

One of the scariest things to me is if you go through Heathrow Airport or some of the major European airports, and they have all these wonderful signs out there that say 'Company X runs Software Y.' But if you are my competition, and we both run Software Y, where is my strategic competitive advantage? It can't be in the software. It's not in the processes. It's got to be in the data. There is nothing else left to compete on at that point.

Mark Brunelli is news director for the Business Applications and Architecture Media Group at TechTarget. Email him at mbrunelli@techtarget.comand follow him on Twitter: @Brunola88.

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