 from Fisherman's Wharf 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 Frick here with theCUBE alongside Peter Burris, our Chief Research Officer from Wikibon. We're at the IBM Chief Data Officer Strategy Summit, Spring 2017. It's a mouthful, but it's an important event. There's 170 plus CDOs here, sharing information, really, you know, binding their community, sharing best practices. And of course, IBM is sharing their journey, which is pretty interesting, because they're taking their own transformational journey, writing up a blueprint and going to deliver it in October. So, drinking their own champagne, as they like to say. We're really excited to have CUBE alumni, many time visitor, Seth Dorbin. He is the Chief Data Officer of IBM Analytics. Seth, welcome. Yeah, thanks for having me again. Absolutely. Again, these events are interesting. There's a series of them. They're in multiple cities. They're now going to go to multiple countries. And it's really intended, I believe, or tell me, it's kind of a learning experience and this great little tight community for this very specific role. Yeah, so these events are actually really good. So I've been participating in these for, since the second one. So since the first one in Boston about two and a half years ago. And they're really great events because it's an opportunity for CDOs or de facto CDOs and organizations to have in-depth conversations with their peers about struggles, challenges, successes. Really helps to kind of, for one piece is you can benchmark yourself. How are we doing as an organization and how am I doing as a CDO and where do I fit within the bigger community or within your industry? And how have you seen it kind of evolve? Not just the role per se, but some of the specific challenges or implementation issues that these people have had in trying to deliver value inside their company. Yeah, so when these started three years ago, there really were not a whole lot of tools that CDOs could use to solve your data science problems, to solve your cloud problem, to solve your governance problem. And we're starting to get to a place in the world where there are actual tools out there that help you do these things. And so you don't struggle to figure out how do I find talent that can build the tools internally and deploy them. It's now getting the talent to actually start implementing things that already exist. Is a CDO job well enough to find at this point in time that you think that you can actually start thinking about tools as opposed to the challenges of the business? In other words, is every CDO different or are the practices now becoming a little bit more and the convention's becoming a little bit better understood and stable so you can now do a better job of practicing the CDO role? Yeah, I think today the CDO role is still very ill defined. And it's really industry by industry and company by company, even CDOs play different roles within each of those. So I've only been with IBM for the last four months. I've been spending a lot of that time talking to our clients. Financial services, manufacturing, all over the board. And really the CDOs and those places are all, like I said, industry specific, they're in different places and even company by company, they're in different places. And it really depends on where the companies are on their data and digital journey, what role the CDO has, right? Is it really a defensive play to make sure we're not going to violate any regulations or is it an offensive play and how do we disrupt our industry instead of being disrupted? Because really every industry is in a place where you're either going to be the disruptor or you're going to be the disruptee. And so that's kind of the scope, the breadth of I think what CDO role CDO plays. Do you see it all kind of eventually converging to a common point? Because obviously the CFO and the CMO, those are pretty standardized functions over time, but that wasn't always that way. Well, I sure hope it does, right? I mean, I think CDOs are becoming pretty pervasive. I think you're starting to see there's, when this started, the first one I went to, there were literally 35 people and only half of them were called CDOs, right? And so we've progressed now, we've got 100 people, over 170 some odd people that are here that are CDOs, most of them have the CDO title even. And so the fact that that title is much more pervasive says that we're heading that way. I think, you know, industries have some, I think industry by industry, you'll start seeing similar responsibilities for CDOs. But I don't think you'll start seeing across the board like a CFO or a CFO does the same thing regardless of the industry. I don't think you'll see that in the CDO for quite some time. Well, one of the things that we certainly we find interesting is that the role the data is playing in business is evolving. Yep. And it's partly the CDO's job is to explain to his or her peers at that chief level how using business or using data is going to change the way that they do things in the way that their function works. And that's part of the reason I think why you're suggesting that on a vertical basis that the CDO's job is different because different industries are being impacted themselves by data differently. Yep. So as you think about the job that you're performing and the job that CDOs are performing, what part is technical? What part is organizational? What part is political, et cetera? Yeah. So I think a lot of the role of a CDO is political. Most of the CDOs that I know have built their careers on stomping on people's toes, right? And how do I drive change by infringing on other people's turf? Effectively. In a nice way. Well, and it depends in the appropriate way. In a productive way. In the appropriate way, right? It could be nice, could not be nice depending on the politics and the culture of the organization. And I think, so I think a lot of the role of a CDO, it's almost like chief disruption officer as much as it is data officer. And I think it's a lot about using data, but I think more importantly, it's about using analytics. So how do you use analytics to actually derive insights and kind of next best action from the data? I think just looking at data and still using gut based on data is not good enough for chief data officers to really have an impact and really be successful. It's how do you use analytics on that data, whether it's machine learning, deep learning, operations research to really change how the business operates because as chief data officers, you need to justify your existence a lot. And the way you do that is you tie real value to decisions that your company is making and the data and the analytics that are needed for those decisions. So that's really the role of a CDO in my mind is, how do I tie value of data based on decisions and how do I use analytics to make those decisions more effective? We're the early days more defensive and now shifting to offensive. It sounds like, and that's kind of a typical case where you use technology initially often to save money before you start to use it to create new value, new revenue streams. Is that kind of consistent here? It's kind of interesting that you say they have to kind of defend themselves sometimes when you think it will be patently obvious that if you're not getting on a data software defined train, you're going to be left behind. Yeah, I mean, I think there's two types. There's kind of CDOs that are there to protect freedom to operate and that's what I call, think of as defensive. And then there's kind of offensive CDOs and that's really bringing value, more value out of existing processes. In my mind, there's kind of this, every company's on this digital transformation journey and there's two steps to it, right? One is kind of this data science transformation which is where you use data and analytics to accelerate your business's current goals, right? And so how do I use data and analytics to change how my business, to accelerate my businesses march towards its current goals? Then there's the second stage which is the true digital transformation which is how do I use data and analytics to fundamentally change how my industry and my company operate? So actually changing the goals of the industry. For example, moving from selling physical products to selling outcomes, right? You can't do that until you've done this digital, this data transformation, until you've started operating on data, until you've started operating on analytics, you can't sell outcomes until you've done that. And so it's kind of this two-step journey. So you've said this a couple of times. I want to test an idea on you and see what you think. Industry classifications are tied back to assets. So you look at industries and they have common organization of assets, right? Data as an asset has very, very different attributes because it can be shared. It's not scarce. It's something that can be shared. As we become more digital and as this notion of data science or analytics, the role that data plays as an asset and analytics plays as assets becomes more pervasive. Does that start to change the notion of industry? Because now by using data differently, you can use other assets and deploy other assets differently. Yeah, I think it fundamentally changes how business operates and even how businesses are measured because you hit on this point pretty well, which is data is reusable. And so as I build these data or digital assets, right? The quality of a company's margins should change, right? So for every dollar revenue I generate, maybe today I generate 15% profit. As you start moving to a digital, being a more digital company built on data and analytics, that percent of profit based on revenue should go up because these assets that you're building to reuse them is extremely cheap, right? I don't have to build another factory to scale up. Right, I buy a little bit more compute time or I develop a new machine learning model. And so it's very scalable unlike building physical products. And so I think you will see a fundamental shift in how businesses are measured and what standards that investors hold businesses to. And I think another good point is that a mindset shift that needs to happen for companies is that companies need to stop thinking of data as a digital dropping of applications, right? And start thinking of it as an asset because data has value, right? It's no longer just something that's dropped on the table from applications that I built. It's we are building to fundamentally create data, to derive analytics, to generate value, to build new revenue for the company that didn't exist today. But the thing that changes the least, ultimately, is the customer. And so it suggests that companies that have customers can use data to get in a new product or new service domains faster than companies who don't think about data as an asset and are locked into how can I take my core set of my organization, my plant, my machinery and keep stamping out something that's common to it or similar to it. So this notion of customer becomes the driver increasingly of what industry you're in or what activities you perform. Does that make sense? I think everything needs to be driven from the perspective of the customer. As you become a data driven or digital company, everything needs to be shifted in that organization from the perspective of the customer. Even companies that are B2B, right? B2B companies need to start thinking about what is the ultimate end user? How are they going to use what I'm building for my business partner, my B2B partner? What is their actual human being that's sitting down using it? How are they going to use it? How are they going to interact with it? And so it really fundamentally changes how businesses approach B2B relationships. It fundamentally changes a type of information that if I'm a B2B company, how do I get more information about the end users and how do I connect? Even if I don't come in direct contact with them, how do I understand how they're using my product better? And I think that's a fundamental, just like you need to stop thinking of data as a digital dropping, you need to, every question needs to come from how is the end user ultimately going to use this? How do I better deploy that, right? So the utility that the customer gets, capturing data about the use of that, the generation of that utility, and drive it all the way back. Does the CDO have to take a more explicit role? Absolutely. In getting people to see that. Yes, absolutely. I think that's part of the cultural shift that needs to happen. So how does the CDO do that? I think every question needs to start with, you know, what impact does this have on the end user, right? What is the customer perspective on this, right? Really starting to think about, you know. See, I'm sorry for interrupting. I turned that around. I would say it's what impact does the customer have on us? Because you don't know unless you capture data. And so that notion of customer impact measurement, which we heard last time, the measurability, and then drive that all the way back. That seems like it's going to become an increasingly a central design point. Yeah, it's a loop, right? And you got to start thinking, you got to start using these new methodologies that are out there, these design thinking methodologies. You know, it's not just about building an Uber app, right? It's not just about building an app. It's about how do I fundamentally shift my business to this design thinking methodology to start thinking, because that's what design thing is all about. It's all about how is this going to be used? How is this, and every aspect of your business, you need to approach that way. All right, Seth, I'm afraid they're going to put us in the chafing this year if we don't get off here. I think so too, yeah. So we're going to leave it there. It's great to see again and we look forward to seeing you at the next one of these. Yeah, thanks so much. He's Seth, he's Peter, I'm Jeff, you're watching theCUBE from the IBM Chief Data Officer Strategy Summit Spring 2017. I got it all in my mouth for we'll be back after lunch, which they're setting up right now.