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Blog > March 2020 > CDO Series: First-Generation vs. Second-Generation CDOs: Challenges, Goals and Tools

CDO Series: First-Generation vs. Second-Generation CDOs: Challenges, Goals and Tools

Welcome to my four-part blog series speaking to leaders and corporations who are fighting the good fight and who realize how data is the common denominator, the number one corporate asset, the weaponization that protects and enables that “hard left turn” (shout out to Mark Nance, CDO of ASG Customer American Fidelity).

The Chief Data Officer (CDO) has solidified its foothold in the expanding C-suite. Having evolved from a relatively new executive role to a vital, strategic staple, CDOs seem to fall into two camps: first-generation and second-generation. While CDOs used to operate in a highly compliance-driven world, today’s data landscape requires that they also focus on using data for economic value and disruption. That shift comes with a different set of challenges, needs, expectations and goals.

“The first-generation CDOs are those taking up roles in organizations which haven’t previously had a senior function responsible for data and a data strategy, whereas the second-generation CDO builds upon the firm foundation of the first-generation CDO and generates more value for the organization.” –The Chief Data Officer’s Playbook (Curruthers and Jackson). This is a key distinction when it comes to the data maturity of an organization and the intentional vision for the data strategy—i.e. which it will apply to a structured data acumen program and eventually to use data for disrupting the marketplace.

Amidst the COVID-19 crisis, there are bound to be some amazing data stories supporting corporations’ efforts to support the welfare of people and react quickly to the pandemic – from protecting federal regulations and finding patterns in the data, to generating enough data to make life-saving decisions. My bet is the fact that these corporate leaders who are responding quickly and effectively today, are making highly “data-informed” decisions. Here is a closer look at what a first-generation vs. a second-generation CDO looks like and why both are essential for organizational success.

First-Generation CDOs: Building a Data Environment
First-generation CDOs are often hired into a highly complex, disparate data organization. According to the 2018 FIMA CDO Study: Uncovering the Progress of the CDO 2.0, conducted in partnership with ASG and Wipro, 45% of CDOs are largely focused on compliance, while just starting to support the business overall. These first-generation CDOs are charged with getting their arms around what is happening in their organizations’ data environments—identifying where there is risk of exposure, data bloat and data delays.

Most first-generation CDOs are under immediate pressure to deliver results. However, there are no quick fixes for data problems that exist across an entire organization. ASG supports our customers’ immediate data strategy: accomplishing upfront wins to validate why the CDO was brought in. Then, they (with the help of ASG) can focus on the target data strategy—creating a data-centric environment across many LOBs.

Second-Generation CDOs: Leveraging Data for Business Value
For second-generation CDOs, the big data environment should be operational, they may be using tools that enable data governance and perhaps may have a centralized knowledge base that provides a metadata view from an enterprise perspective.

Instead of collecting and hording massive amounts of data, the second-generation CDOs can zero in on the critical data, glean economic value from it and apply data-informed decisions to quickly change the ships’ course. In essence: second-generation CDOs should have arrived at, or be trending toward, the target data strategy. Priorities include:
  • Focusing on advanced analytics, data science and data visualization
  • Gaining economic value from data
  • Pivoting the organization quickly
  • Innovating with data to create a new product
  • Driving mergers and acquisitions
  • Revamping technologies and processes to outpace the competition – which 39% of CDOs currently are
To drive their target data strategy, second-generation CDOs rely on the same data management tools as the first generation, such as ASG Data Intelligence. Backend technology is phased out or controlled, and on the front end, they are using R or Python to own their integration, as well as AI and data lineage to automate information management.

According to the FIMA report, 77% of CDOs are only dedicating one-quarter or less of their operating budget to compliance activities—which means they are now able to spend more resources on competitive advantage and analytics. Working in this more mature data environment, second-generation CDOs can leverage data knowing it is protected, tied to a business policy and ready for innovative initiatives.

Transitioning from First- to Second-Generation
What happens when CDOs transition from first- to second-generation? According to the FIMA report, 55% of CDOs feel that compliance is handled by default, so they can focus on data as a key driver for business improvements—meaning roughly half are still working on compliance and protecting data.

Today, more CDOs are still first-generation—though many straddle both roles. For one customer, ASG helped the CDO lay the first-generation foundation and now—while some compliance is still in-progress—he can level up to more second-generation initiatives. It’s a balancing act: innovating with the right hand and reaching regulatory compliance with the left hand. The key to achieving both is starting with an automated data inventory. Without one, organizations begin by building a business glossary or a catalog of datasets without knowing any context and having to backfill where data came from—which is a guessing game, and at the end of the day, will not provide data trust.

To learn how ASG Data Intelligence can support both generations of CDOs, view our ASG DI Maturity Model or visit our Data Intelligence product page. To explore more findings from the 2018 FIMA CDO Study: Uncovering the Progress of the CDO 2.0, read the report or this blog post. Stay tuned for the next three installments of my blog series.