Chief Digital Officer vs. Chief Data Officer: Defining the Scope for Digital
Humans are always asking if the grass is greener somewhere else or, as behavioral economist Dan Ariely puts it “are always looking at things around them in relation to each other.” So it wasn't a complete surprise when a chief data officer for a major company asked me at the MIT CDOIQ Summit whether it would be better if he were labeled a chief digital officer. He said that his business seemed to get digital, but it didn't get data.
Yet according to Forrester, 59% of enterprises have appointed a chief data officer and 55% of small-to-midsized businesses have also done so. Far fewer companies have chief digital officers, a fact which caused Forrester to ask whether the chief digital officer role was a fad or future?
When asked about the impetus for creating their role, chief data officers said it was the result of a shift in the business, the need for better marketing, the need to increase competitive advantage, and the need for a single source of truth. While all strong business reasons for initiating a chief data officer function, I was left to explain the difference between what a chief digital officer and a chief data officer does for digital to the chief data officer above, which caused me to rethink the scope and potential for digital.
The Scope of Digital Opportunities
As the chart above shows, I believe opportunities for digital fall into three types of offerings. The first is re-presentation apps. Apps like these allow a company to build on existing operational systems to improve the presentation and user experience of the app or specific business process. Higher personalization and engagement for business stakeholders — typically customers, employees and suppliers/partners — is made possible here. For example, one company I know wants to create a single user experience for employees across all its HR applications.
Next up are data collector apps. Think of the telehealth sector here, where users can collect and share their personally collected health data and transform the provider/patient relationship by doing so. The opportunity for healthcare is to produce a better quality of care at a lower cost.
These digital offerings are transforming the process interface for users. According to Constellation Research analyst Dion Hinchcliffe, these digital offerings typically fall into three categories of experiences: customer, employee and supplier. Again, the aim is to improve experiences by changing how we consume applications and business processes. Think of the systems involved in the end-to-end process of employee onboarding from IT to HR. Powering these digital opportunities allow users to access or publish data to and from processes in a publish and subscribe fashion.
The two uses of digital offerings above are typically the purview of the chief digital officer or chief information officer. These apps can span multiple applications and multiple processes or a single application and single process.
The final digital offering is data-fueled apps. These typically have financial value or extend the value of physical products. They are purpose built for their data. These are often called digital products. These are the purview — if it is not clear — of the chief data officer.
Related Article: Chief Data Officer Enters v4.0: What Does That Mean?
Technology Required for Digital Offerings
Multiple layers of technology deliver the potential for creating digital offerings. The components are:
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Digital offerings are built on an operational backbone that can pull and distribute processes and data from multiple source system types. My friends Jeanne Ross and Martin Mocker define an operational backbone “as a coherent set of enterprise systems, data and processes supporting a company’s core operations. The backbone replaces the messy legacy systems, processes and data generated by siloed business units with standardized and shared systems, processes and data.”
The integrations created within the operational backbone are the glue for the digital offerings. Today, APIs are about more than just data. The goal for APIs should be “predefined, plug-and-play connections between otherwise independent components.” APIs as such represent the distribution agent for the information contained within digital offerings.
Data-fueled apps require useful and accurate data. To deliver this, data needs to be processed. The process step has been described by some as data wrangling or data hygiene. To achieve this goal, “a data pipeline gathers, inputs, cleans, integrates, processes and safeguards data in a systematic, sustainable and scalable way. The basic idea behind the data pipeline is a publish and subscribe methodology for (data) APIs. The purpose is to make clean, consistent data available to applications, think of it as a data supermarket.”
AI and Algorithms
AI and algorithms are about turning the data into value. Historically, data's value was found in chart or graphic, descriptive analytics. But today, value is generated through a prediction. While AI can be applied to diverse use cases, the goal is to predict what a user wants or to know when to replace a piece of equipment. The power of supervised learning, unsupervised learning, reinforced learning and AI is to transform business models. As Alibaba Group’s Ming Zeng said, “Our algorithms can look at transaction data to access how well a business is doing, how competitive its offerings are in a market, whether its partners have high credit ratings, and so on.” Simply put, AI transforms how we think about existing business models.
Low-Code App Building
The basis for instantiating the digital offerings is low code application technology. Low code, especially when it is connected to integrations and APIs, is to re-present applications, collect data for applications and create value from analytical models. Simply put, low code is the work horse for delivering digital's opportunity to users.
Related Article: Why Low Code/No Code Solutions Should Thrive in the COVID-19 World
2 Roles, 2 Big Agendas
In the end, we need our chief data officers to focus on data fueled apps and data products. And whether it is a chief digital officer or CMO or other chief officer, they should focus on the number of components needed to cross the digital divide. Making data great and analytics work is a big agenda all by itself.
About the Author
Myles Suer is the leading influencer of CIOs, according to Leadtail. He is the director of solutions marketing at Alation and also the facilitator of the #CIOChat.