 Fisherman's War in San Francisco. It's theCUBE, covering IBM Chief Data Officer Strategy Summit, Spring 2017. Brought to you by IBM. Hey, welcome back everybody. Jeff Rick here with theCUBE. We're in downtown San Francisco at the IBM Chief Data Officer Strategy Summit, Spring 2017. That's a mouthful, but it's important because there's a series of these strategy summits that are happening not only in the United States, but they're expanding it all over the world and it's really a chance for practitioners to come together, the Chief Data Officers, to share best practices, really learn from the best and as we love to do on theCUBE, we get the smartest people we can find and we have them here. So first off, let me introduce Peter Burris, Chief Research Officer from Wikibon, but from IBM coming right off the keynote. The smart people. The smart people. Ender Hall of Bondari, he is the IBM Global Chief Data Officer, which is a short title and a big job. And Jesus Montaz, he's the general manager of cognitive transformation, IBM Global Business Services. So first off, gentlemen, welcome. Thank you, thank you. So it's really interesting how this Chief Data Officer space has evolved. We've been watching it for years back to some of the MIT, CDOIQ, I think like three or four years ago, nobody knew who they were, who were they going to report to, what are they going to do, what's kind of the scope of the job. That's changed dramatically and it really says something to IBM's credit that they just went out and got one to help really refine and define for your customers where this is going. So first off, welcome. And let's get into it. What, how is the rule starting to solidify as to what do Chief Data Officers do? So, you know, I'll take that. And in terms of Chief Data Officers, it's, you know, if you think in terms of the, the advent of the position when it started out, like, you know, I was one of the earliest in 2006 and I've done the job four times and it has been continuously evolving ever since, right? So when I, when the job was first, when my very first job, I actually had to create the job because there was a company very interested in recruiting me and they said they sensed that data was critical. It was a company in pharmaceutical insurance. So really very data-based, right? That's, everything is driven through data. And so they had a sense that data was going to be extremely important, extremely relevant and, but they didn't really have the position or they didn't coin the phrase. And I suggested it. There were like three other Chief Data Officers at that time in the U.S. And so I became the fourth. And at that time it had to do with essentially aligning data with strategy, with the strategy of the company, which means how is the company actually planning to monetize itself, not its data, but itself. And then essentially make sure that the data is now fit for purpose to help them with that monetization. And so that's all about aligning with the corporate strategy. And you have to have an officer who's capable of doing that and has that focus and is able to push that. Because then once you start with that strategy, then there are plenty of different branches that shoot off like governance, centralization of data, analytics, data science and so on and so forth. And then you have to manage that process. And data used to be kind of a liability, hard to think today looking back, right? Because you had to buy servers and storage and it was expensive and what do you do with it at all? You can't analyze it. Boy, how the world has flipped. And now data is probably one of your most important assets. But then the big question, right? What do you do with it to really make it an asset? It is, it is. And it's actually fascinating to see here in the summit how even the role that is just was created in a few years, Chief Data Officer, the scope of it is changing. The nature of the value of that role is changing. To your point, I remember meeting some CIO friends 10 years ago that they were telling me how they were deleting data because it was too costly to have it. Now those same CIOs would give whatever they could have to get that data back and have that history and be able to monetize the data. Because of the evolution of computing and because now not only the portion of the physical world that we've been able to represent with data for the last 50 years with information technology, but we're adding to that space all of this 80% of the data that even if digitized, we weren't able to use in processes, in decision making, in manufacturing. Now we have cognitive technology that can actually use that data. The role of the Chief Data Officer is actually expanding significantly from what used to be the element of data science, of data governance, of data sovereignty, of data security, to now this idea of value creation with basically five times more categories of data. And it actually is a dialogue that we're having here at the summit that is fascinating from the people who are doing this job every day. So if you think about the challenges associated with the Chief Data Officer, it's a job that's evolving. But partly one of the reasons why the Chief Data Officer job is evolving is the very concept of the role that data plays in business is evolving and that's forcing every job in business to evolve. So the CMO's job's evolving, the CEO's job's evolving, the CIO's job is evolving. How are you navigating this interesting combination of forces on the role of the CDO as you stake out this is the value I'm going to bring to the business even as other jobs start to themselves change in response to this concept of the value data? Yeah, I mean, you know, people ask me to describe my job and there are just two words that I use to describe it. It's change agent. And that's exactly how a CDO needs to be, needs to look at their job and also actually act on that. Because to your point, it's not just the CDO job is evolving, it's all these other jobs are all evolving simultaneously. And there are times, you know, when I'm sitting at the table it appears that, well, you don't really own anything because everybody else owns all the processes of the business. On the other hand, sometimes you're sitting there and you're thinking, no, you actually own everything because the data that feeds those processes or comes out of those processes is all coming back to you. So I think the best way to think about the CDO job is that of a change agent. So you are essentially entrusted with creating value from the data, as Jesus said, and then enabling all the other jobs to change, to take advantage of this. Because it's the enablement that's where you bring the multiplier effect, right? It's the democratization of the day across the organization, across business roles, across departments is where you're going to get this huge multiplier. Yeah, and I think the role of, you know, one of the things that we're seeing and the partnership that Israel and I have in the way that we do this within IBM, but also we do it for the rest of our clients is that change agency element of it is the constant infusion of design. So Chief Data Officer, we're very well known for the data science elements of it, but part of the constraint is actually no longer the computing capability of the algorithms themselves or the access to the data. We've solved those constraints, is now actually preparing the business leaders to consume that and to actually create value which changes the nature of their job as well. And that's the resistance point where embedding these technologies in the workflows in a way that they create value in the natural flow of what these jobs actually do is extremely important. Otherwise, I mean, we were having a fascinating discussion before is even if the data is correct, many business leaders will say, well, I don't believe it. And then if you don't adopt it, you don't get the value. So you guys are putting together this wonderful community of CDOs, Chief Data Officers, trying to diffuse what the job is, how you go about doing the job. If you're giving advice and counsel to a CEO or board of directors who are interested in trying to apply this role in their business, what should they be looking for? What type of person, what type of background, what type of skills? I'll take it and then you can clarify it. I think it's almost what I would call a new da Vinci. Is the- A new da Vinci. A new da Vinci is the renaissance of someone that is got a technology background because you need to actually understand the mathematical and the data and the technological engineering aspect. So it's not an IT background, at least a STEM background. Exactly, it's a STEM background, but combined with enough knowledge of business architecture. So I call it da Vinci because you see the most remarkable paintings and products of da Vinci was the fusion of mathematics and arts in a way that hadn't been done before. I think the new role of a data science is someone that can be in the boardroom elegantly describing a very sophisticated problem in a very easy to understand manner, but still having the depth of really understanding what's behind it and drawing the line versus what's possible and what's likely to happen. Yeah, no, I think that's right on. I think the biggest hurdle for a chief data officer is the culture change. And to do that, you actually have to be da Vinci. Otherwise, you really can't pull that off. You have to be a da Vinci. You have to be a da Vinci to pull that off. It's not just, you have to appreciate not just the technology, but also the business architecture as well as the fact that people are used to working in certain ways, which are now changing on them. And then there is an aspect of anxiety that goes with it. So you have to be able to understand that. And actually perhaps even harness that to your advantage as you move forward, as opposed to letting that become some kind of a threat or counterproductive mechanism as you move forward. So I've done a fair amount of research over the years on the relationship between business model, business model design and profitability. And there's a lot of different ways of attacking this problem. And I'm not going to tell you I haven't had the right answer there, but one of the things that I discovered when talking to businesses about this is that often it fails when the business fails to, I'm going to use the word secure, it may not be the right word, secure the ongoing rents or value streams from the intellectual property that they create as part of the strategy. So companies with great business model design also find ways to appropriate that value from what they're doing over an extended period of time. And the digital business increasingly that's data. So that raises this interesting question. What is the relationship between data, value streams over time, ownership, intellectual property? Do you have any insight in that? It's a big question. Yeah, no, no. I mean, I think we touched on it also in the discussion both cases when I touched on that. I mean, we've staked out a very clear ground on that. But I say we here, I mean IBM, the way we are defining that is we're pretty clear that for all the reasons you just outlined, the client's data has to be their data. Has to be? Has to be their data. It has to be their insight. Because otherwise you run into this notion of, well, whose intellectual property is it? Whose expertise is it? Because these systems learn as they go. And so we're architecting towards offerings that are very clear on that, that we're going to make it possible for a client that, for instance, just wants to keep their data and derive whatever insight they can from that data and not let anybody else derive that insight, that it'll be possible for them to do that. As well as clients where they're actually comfortable setting up a community and perhaps within an industry-specific setup, they will allow insights that are then shared across that. We think that's extremely important to be really clear about that upfront and to be able to architect to support that in a way that is going to be welcomed by the business. And is that part of the CDO's remit within business to work with legal and work with others to ensure that the rules and mechanisms to sustain management of that intellectual property and retain rents out of that intellectual property, some call it the monetization process, are in place, are enforced, are sustained? That's always been part of the CDO's remit, right? I mean, in the sense that even before cognition, that was always part of it, that if we were bringing in data, or if data was leaving the company that you wanted to make sure that it was being done in the right way. And so that partnership, not just with legal, but also with IT, also with the business areas, you know, that you have to put in place, and that's the essence of governance. In the broadest sense, you could think of governance as doing that, as protecting the data asset that the company has. But it's interesting how the derivatives now, though, you're getting like stacked derivatives. It's much more complicated. Of data, and then insight combined. So it's not just, you know, that core baseline data anymore. No, and I like to make it analogous. You've heard us say for the last five years, we believe that data has become the new natural resource for the business. And when you go back to other natural resources and you see what happened with the people that were in charge with them, you can kind of predict a little bit that evolution on the chief data officer role. If you were a landowner in Texas, when there was no ability to basically either extract or repine petroleum, you were not preoccupied with how would you protect land rights under the line that you can see. So as a landowner, you had a job, but you were basically just focused on what's over the surface. Once, actually it was known that below the surface there was massive amount of value that could be obtained. Suddenly that land ownership expanded in responsibility. You then have to be preoccupied. Okay, wait a minute. Who owns those land rights to actually get that oil? And who's going to do that? I think you can project that to the role of the chief data officer. If you don't have a business model that monetizes data, you were now preoccupied to actually figure out how to govern it or how to monetize it or how to put royalties on it. You were just preoccupied with just making sure that the data you have, it was well maintained, and it could be usable. The role is massively expanding to this all below the line where not only the data is being used for internal purposes, but it's becoming a potential element of a strategy that is new. Oh, the value proposition. Simply stated. Of the value proposition, exactly. But you're right, so I agree with that. But data as an asset, has different characteristics in oil as an asset or people as an asset. People can effectively be applied to one thing at a time. I mean, we can multitask. But right now you're having a conversation with us and so IBM is not seeing you talk to customers here at the show. For example, data does not follow the economics of scarcity. It follows a new economics. It's easy to copy. It's easy to share. It's done right, it's easy to integrate. You can do an enormous number of things with data that you've never been able to do with any other asset ever. And that's one of the reasons why this digital transformation is so interesting and challenging and fraught with risk but also potentially rewarding. So as you think about the CDO role and being the executive in the business that is looking at taking care of an asset but a special type of asset, how does that change the idea of taking care of the energy of the oil to now doing it a little bit differently because it can be shared, because it can be combined? I think, I mean, I think it, in the way as technology has moved from being a mechanism to provide efficiency to the business to actually being core to defining what the business is. I think every role related to technology is following that thing. So I would say, for example, in Dremel and I when we're working with clients or on our models, he's not just focused on the data. He's actually informing what is possible for the business to do. What should be the components of the new business architecture? It's a much enhanced role. And that's why I kept saying is like, you've got to be one of those Da Vinci's. I mean, you get to do it every day, but I don't know if you want to comment on that. Yeah, no, I think that's exactly right. I mean, you are right in the sense that it is a different kind of asset that has certain characteristics which are different from what you'd find in say land or oil or something like that, a natural resource. But in terms of, and you can create a lot of value at times by holding onto it or you could create a lot of value by sharing it. And we've seen examples of both, you know, manifolds. So I think as part of being the CDO, it's being cognizant that there is going to be a lot of change in this role as data is changing, not just in its nature in the sense that now you have a lot more unstructured data, many different forms of data, but also in terms of its application within the business and this expansion to, you know, changing processes and transforming processes which was never the case when I first did the job in 2006. It was not about process transformation. It was about a much more classic view of an asset where it's a create this data warehouse that becomes the corporate asset. And now, you know, you generate some insights from it, disseminate the insights. Now it's all about actually transforming the business by changing the processes, reimagining what they could be because the nature of data has changed. So I have one quick question. Last one. Very quickly. Well, maybe it's not a quick question, so give me a quick answer. I'm going to have to follow up, follow up, follow up. A couple of times you both have mentioned the relationship between the CDO and business architecture. Clearly there's a relationship between the CIO and IT architecture, even the CIO and data architecture at a technical level. At IBM, do you actually have staff that does business architecture work? Is there someone, is that a formal, defined set of resources that you have and should, or should CIOs have access to a group of people who do business architecture? What do you think? So we've traditionally had business architects at IBM, I think, for a long time, pre-daily. But again, you know, as Jesus said, their role is also evolving. As it becomes much more of our process transformation that's different from what it was before. This is much more now about a collaborative effort where you essentially sit down in a squad in an agile setting, and you're working together to redesign and reinvent the process. That's there. And then there's business value, it's less about creating large, monolithic architectures that span an entire enterprise. It's all about being agile, data-driven, and reacting to the changes that are- So turning strategy in action? Yes. And I think, again, in IBM, one of the things that we have done, our COO, that is the organization that actually is the custodian of this cognitive enterprise architecture of which Intranel actually is part of. So we are actually putting it all together. It used to be an organization, most COOs have evolved from running operations to the financial services to now have to figure out what is the digital services version of the enterprise that they need to implement, and they can't do that without a CDO in which they just can't. All right, gentlemen. Unfortunately, we'll have to leave it there for viewers at home, tune in to season two with Andrew Paul and Asus. Really a great topic. Congratulations on the event and we look forward to the next time. Thank you very much. Absolutely. With Peter Burr, I'm Jeff Frick. You're watching theCUBE from the IBM Chief Data Officer Strategy Summit Spring 2017. We'll be right back with more for the short break. Thanks for watching.