 Welcome back everybody. I'm going to try and get us started a few seconds early here just because these next two sessions are from two of the most respected analysts in the world of data strategy who also happen to be good friends and colleagues and I want to give them as much time as possible. This is the first of our EDW keynote time slots. Our first presentation is from Doug Laney who is the Data and Analytics Innovation Fellow at West Monroe Partners in Chicago. This topic is the business case for the Chief Data Officer. So while we won't have a great deal of time for questions after these sessions we do invite you nonetheless to leave them your questions and comments in the window on the right side and we'll attempt to answer some of them if we have any time at the end. Otherwise we can pass them on to the speakers and they'll serve as a nice conversation starter or icebreaker between all of you and the audience as well. I encourage you to reach out to our keynote speakers via the messaging and networking features of the Spot Me app. Okay I'm super interested in both of these talks so let's jump in right now. Doug Laney please take it away. All right good afternoon everyone from Chicago. Just a few blocks here from from Wrigley Field where the Cubs play. Thank you Tony for once again for inviting me to speak at the this outstanding event. I know we're we're all looking forward to resuming in person in diversity events as soon as possible and thank you all for joining us today. I hope you and all those you love are keeping safe and well. I'm really excited to be followed by by John Landley. Usually I follow him and I've kind of followed him my entire career so Tony you got this in the wrong order but anyway stick or definitely stick around for John he's always quite entertaining and informative. So the topic here is a hypothesis. So let's start with a hypothesis which is that CDOs are making a difference. You know any as any good scientist knows and any good data scientists should know most discoveries begin with a hypothesis hypothesis and we you know we see a lot of surveys about data scientists that have to do with their role but don't really have much of a point to make or a question to ask. Now I sort of took a different approach I wanted to find out whether companies that have CDOs operate differently than other organizations and I wanted to know if these organizations benefit in any way. So what kind of you know different behaviors do they exhibit and ultimately is the CDO really making a difference. Well it's easy to lay out you know the job and the various responsibilities of a CDO but it's it's kind of proven difficult for many organizations to make the business case in the first place. So the findings I'm about to share with you come from surveys of over 500 organizations to date and we're running actually a continuous study to look for what kind of changes we see over time and I'll share those perhaps at next year's event. So I'm not the first one to tell you that correlation doesn't equal causation so I'm only going to share with you kind of the findings where there's an extreme difference in organizations that have versus those that don't have a CDO. You know one might ask is it reasonable to assume that someone other than a CDO is driving these data related improvements in a company that has a CDO or that company's already exhibiting these kinds of behaviors are the ones that are that are hiring CDOs. In my experience no neither of these is very likely so you know kind of come to your own conclusions about how strong a business case you know these findings are. I think it's a pretty good one especially when we combine this kind of empirical data with our own reasoning about about the role. So first let's take a look at at enterprises as a whole and everyone talks about becoming data driven or data centric but do they they and their organizations really embody or embrace this at an enterprise level. When we take a look at corporate strategies we find that only about 50 percent you know let me forward here only about 50 percent even make mention of the importance of data and analytics and almost all strategies make mention of the importance of their core assets of course their financial assets and production of goods and services that they deliver and they even make mention of their human capital. You know these are things that I'll show up on the financial statements in some way or another. You know what doesn't exist data assets and as I've discussed and written about you know over the past decade data is not yet considered a balance sheet asset by current accounting standards and data is not even fully acknowledged as property by the law therefore it's easy to understand why it's overlooked in annual reports but some companies get it not that they quantify the value of your data as an actual asset on the balance sheet but that they understand its value at some level and find it worth featuring as part of their their corporate strategy. Now is there any difference in organizations that do consider data and analytics as part of their enterprise strategy versus those that don't? It seems it's not just you know lip service these businesses and other organizations claim to make significant use of their data three to four times more often this isn't you know 30 or 40 percent this is 300 percent more often. Listen vision starts at the we all know this vision starts at the top and it doesn't get much higher than those putting their names on the actual report or corporate strategy and who's involved in or sorry who's involved in or driving these kinds of high-level strategies mentioning data and analytics well it seems to be the the CDO but of course talking about data and analytics to shareholders isn't really the same thing as actually doing it so what is what is doing it actually mean what is doing data and analytics actually entail many CDOs and other leaders talk about they often talk about transformation you know we're transforming our business our relationships with customers and suppliers we're transforming products and services or even transforming the market itself so let's look at the the three ways that organizations say they're they're using data there we go the three ways organizations say they're using data for transformation primarily they're using data for strategic insights and decision-making you know I suppose one can debate whether that's transformative in and of itself or not 30% say that they're using data to improve business performance you know and I suppose the degree to which you're improving business processes could be considered transformative if you do it well that is if you integrate data and analytics into the business processes themselves typically with the help of some form of AI or automation or your process automation next we see that a scant 17% say they're truly transforming business processes products and services with data I think further study would reveal what what these use cases are but over the years I've compiled over 500 nearly six or 700 now real-world examples of organizations using data and analytics in innovative and high-value ways many of which truly are transformative in fact the next book I'm publishing is going to be a compendium of those use cases with commentary by various experts around the world to be very interesting but I want to give some examples so a couple examples Wichita State University has transformed the way it accepts applicants not based on grades or scores or interviews but rather by matching particulars about them with the program's course requirements and curriculum and this has led to fuller courses greater student success and engagement higher revenues for the university or you can look at Vestas which builds and installs wind turbines now they're using super computing based forecasting models to take into account 200 variables and 20 plus petabytes of weather data to identify precise optimal turbine placement within a 10 square meter grid versus a 27 square kilometer grid that was previously possible they now determine the placement the optimal placement in like 15 minutes versus over three weeks previously or you can look at the city of Malmo, Sweden it's police department that reduced nine months of manual analysis of crime data such as communication behavior from phone calls in combination with crime statistics and weather and day of week in city events and half a million interrogations down to three minutes of automated analysis which help them locate a serial killer some years ago so just some of the examples that have compiled it's no surprise who the typical culprit behind these kinds of transformations are it's the CDO but not just any CDO you know we recognize that there are two main classes of CDOs one who acts more in a consultative capacity developing data strategies and initiating data governance efforts and the like this CDO more frequently reports to the CIO or maybe a COO the other class of CDO is an actual executive who's truly responsible and accountable for all things data in the organization often reporting to the CEO or at least with a spot on the executive team we find that fewer than 40 CDOs are in this category however organizations with this kind of executive CDO the one with the resources and the influence and the authority you know we found that they're four times more likely to be using data to to actually transform the business but what about organizations where a CIO still maintains the ultimate responsibility for a company's data assets well it seems that they're far less likely to be doing things like advanced analytics why I believe this is because organizations without empowered you know truly empowered CDOs things like data quality and data availability continue to be significant you know impediment to to analytics next we often hear businesses and data leaders talk about democratizing data but what is you know what does this really mean many of you I'm sure know you know Bernard Maher and I think his succinct definition is as good as any it's that everybody has access to data and there's no gatekeepers that create a bottleneck to the data it requires that you'll be accompanied to the access with easy easy ways for people to understand the data so that they can use it to expedite decision-making and uncover opportunities for the organization so the goal is to have anybody use data at any time to make decisions with no barriers to access you know no unreasonable barriers to access or or understanding there we go but you know if the goal for data to be shared freely throughout the organization you really first have to be considered an asset not just talked about like one unfortunately you know our study indicates that fewer than 20 percent of organizations really treat data as an asset yet you know here we are in the midst of the information age and everyone knows the power of data but still the vast majority of companies are still sitting in the you know the 20th century and haven't made the necessary cultural shift it really shouldn't be that difficult most companies follow a strict you know asset management discipline for their other assets you know their financial assets their physical assets and even their human capital so you know why can't we adopt those kinds of standards and adapt them to to data the frameworks the procedures toward the management of data assets I think again it goes back to because data is not a balance sheet asset or maybe just because we it folks just love inventing new methods more than we do adapting existing ones so I don't know so it's really no surprise you know we see organizations with CDOs being three times as likely to be sharing data freely among individuals and departments than those with no CDO you know how else are you going to establish the necessary kinds of mandates and policies and procedures and cultural shifts I'm sorry it's just not going to happen with only a CIO and a you know director or manager level somebody heading head of data warehouse which is not not going to it just doesn't happen that that well CIOs have a lot on their plate other than data management and so things like data management tend to become you know kind of second-class citizens so we've talked about culture change being one of the major drivers of becoming a so-called data driven the build a data warehouse or data lake and they will come approach as we know has failed over and over yet you know business people are craving data and we hear this time and time again on client engagement so let's take a look at some of the factors that tend to be holding them back starting at the bottom is a bit of a shocker one third of those survey believe data is on a balance sheet asset as I mentioned it certainly should be it qualifies as one it is owned and controlled exchangeable for cash and generates probable future economic benefits that's the definition that's the accounting definition of an asset and it's separable from other kinds of assets but alas you know it's not considered an asset other than some some rare rare kinds of exceptions you know we also have a bit of a data producer consumer disconnect leading to data literacy a lot of people who don't even know who's using the data that they produce or what they're using it for so if you're generating data without much you know purview into how it's being used you're probably not producing it in a way that makes it that usable moreover if neither you as the producer of data nor anyone else are cataloging or describing that data then it's not discoverable or understandable or or even you know trust trustworthy finally you know we do see some growth in the adoption and training on analytic tools beyond spreadsheets the past couple years but again this isn't where it needs to be for an organization to even approach being data driven or to optimize you know the use of of data and analytics so this isn't you know from our study it's just from one kind of our experience at West Monroe of the dozens of companies that have approached us about establishing data literacy programs and the ones we've worked with over the past year nearly every one of those requests actually every one of those requests and conversations were exclusively from a cdo or someone with that kind of level of responsibility not the cios this isn't to say that achieving high levels of data literacy or fluency throughout a company isn't possible without a cdo it's just that we don't you know we just don't see that happening so assuming it takes a cdo to get such programs underway you know would you really want to forego a concerted effort in you know fast digit in a in a fast digitalizing economy like this I certainly wouldn't not one of my favorite topics which is data monetization most of my work the past several years has been with with businesses to help develop new and innovative value streams from their data that's kind of how I define data monetization now this doesn't necessarily mean selling data but rather deploying data in a variety of ways internally and externally but measuring its benefit remember as I've long argued data is not the new oil data has unique characteristic that oil doesn't data is what economists would call a non rivalrous non depleting and regenerative asset that is you can use it simultaneously for multiple purposes unlike oil and you can use it again and again unlike a drop of oil which dissipates and data typically generates more data oil generates heat and energy and you know in pollution but companies whose whose leaders business leaders and and data leaders get this concept understand these differences are the ones who are winning today and really poised to win in their their their industries so let's examine the state of affairs when it comes to generating data-driven value streams the good news I suppose is that about half of organizations believe they're finding ways to monetize their their data externally about 10 license data to others and a few more exchange data in return for goods and services or other commercial considerations like discounts finally we see that fewer than a third of companies say they're generating data generating value from their data in a multitude of ways this actually aligns with the the new vantage study we saw earlier in the year which indicates that only 12 percent of CDOs have revenue responsibility without revenue responsibility why would a CDO make monetizing data you know really a priority and can you imagine how far behind the curve any business is when they haven't figured out how to wield data like like cash or currency these are probably ones with business leaders who you know look at the company's balance sheet and don't really realize that they're looking at something defined in the 1930s a balance sheets were defined in the 1930s that is largely unchanged since then a ubiquitous document that somehow convinces them that data really isn't an asset and they're sure for doesn't really need to be leveraged as one but here's a real eye-opener organizations with a true CDO executive we find are seven times more likely to be generating cash by sharing or selling their data externally again this isn't seven percent or seventy percent this is seven hundred percent more often these kinds of companies are also three times more likely to be generating other forms of commercial value by externalizing their data assets listen no disrespect to CIOs again they have a thankless and insanely difficult job but they seem to continue to either disregard the potential economic value of their company's data or just really have too many other priorities like you know keeping the lights on and the and the disks spinning next let's talk briefly about measuring data's value one of the cornerstones of infonomics is that of measuring data's value one of my original hypothesis hypotheses was that most companies don't manage data particularly well certainly not with the discipline with which they manage their other assets because again they're not measuring it yet you know we all get totally geeked out over big data and how big it is yet we IT nerds were kind of measuring the wrong thing all along if we'd actually paid the least amount of attention to how other assets are measured how other assets are measured we would have been leading efforts to measure data's various quality characteristics its potential value its top and bottom line impact on the organization but no we had to fix eight on terabytes and gigabytes instead you know as the old adage goes you can't manage what you don't measure and I think our failure to measure anything much about data let alone its most important economic factors have led to insufficient budgets and resources for you know doing things like data quality and master data management and so on and so forth so here we go you know these are downright daunting numbers think about your organization's main asset whatever that is its product its financial investments or maybe a service you offer now in your mind here replace the word data throughout this slide with with that or with whatever that that asset is here I'll make it easier for you here take a look at that so again replace the word asset with whatever your core asset is now consider if you are responsible for that asset and you are one of those 89 percent of companies that didn't know the cost basis of that asset or one of the 88 percent of companies that had no absolutely no value assessment for that asset or one of the 79 percent of the companies that didn't gauge its quality how long would you keep your job this is what the KPMG managing partner Stan Rosenthal refers to as kind of as a kind of what he calls gross negligence that's just rampant throughout the business world well or imagine you're a merger involved in a merger acquisition in the private equity firm VC or an accounting firm you're working with has a due diligence process that completely ignores the value of the acquiree's data assets it's part of the transaction well this is actually what I found in assessing over a dozen different due diligence methodologies from you know household name private equity and accounting firms so CDOs may you know unwittingly be pretty most valuable asset it's data but nobody is going to know this if they you know if they don't measure it I guess you could wait until your company's on the ropes to do this like the some of the major airlines did in valuing their data assets their loyalty programs to the tunes of several tens of billions of dollars but you know why wait this study did find a bit of sunshine on the topic that sorry where am I here yeah so I guess you said you can wait you know to your companies on the ropes in the sunshine we found on this topic is that organizations with executive CDOs are like three times three or four times more likely to be formally evaluating their company's data assets you know unfortunately you know without a CDO being an executive team peer of the CFO this doesn't seem to really happen very often at all and well as I mentioned private equity firms and VC's and so forth you know may continue to entirely overlook the value of a company's data assets and the in the deals that they do we actually find that investors and markets are another matter all together we'll be looked at various financial indicators of companies that demonstrate certain kinds of data savvy or data driven behaviors like hiring a CDO or setting up a data governance program or hiring a team of data scientists you know these kinds of behaviors are becoming certainly more mainstream but what we found is that these kinds of companies have a market to book value ratio or actually Tobin's Q ratio for you quants out there that's nearly two times higher than the market average it's again not two percent not 20 percent we're talking 200 percent higher relative valuation and again I'm not sure what the causal relationship is but there's certainly no doubt that there's something about these kinds of companies that investors really really dig and just for good measure we took out of the equation companies that are making a living selling data or where data or digital goods are a primary offering here we found that these kinds of companies are favored by three to one over the the average company so I really in all my years of research I've never found a more compelling argument for embracing data savvy kinds of behaviors developing data solutions and the need for a real focused executive to formulate and and lead them finally you know dozens of CDOs and CIOs that I've met with say that they you know started getting these kinds of questions from their their boards from their their boards and senior executives my advice would be to become very prepared to answer these kinds of in CDO job interviews angels on in the form of things like you know how would you or how do you intend to treat data like an asset or how would you value data or how do you intend to create new value streams from data you need to be very prepared to answer these kinds of questions even if you're not interviewing for a CDO's job so anyway I just want to wrap up and in short you know suggest that if you want your organization to make data part of its enterprise strategy or transform the business with data or democratize data better or raise the level of data fluency or monetize data better measure data's value not just to improve its quality but and governance but also to enable the improved deployment of data assets and introduce advanced analytics and and of course impress investors then you know it would certainly seem a good idea not just to hire a CDO but hire an executive level CDO so that's the summary I have for you today and thank you all for attending and and do continue to keep safe and well and definitely stick around for Mr. Ladley thanks Doug thank you so much so we've got a few minutes here let's take advantage of that and address a couple of these questions all right the the big one and and you actually addressed some of the board level questions towards the end there so I won't raise those but you know the thing that that gets the crowd going more than anything is is when somebody asks a question about you know where does the responsibility and the accountability lie whether it be within the business or IT and I'm sure you've answered this many times but could you give it another go for us today please yeah you know ultimately there's a quite a bit of shared responsibility the the IT organization is obviously the caretaker of the technologies that they they live on and flow through but ultimately organizations need to start behaving as if data is a business asset not an IT asset and there's really no no other way about it you know listen I appreciate that the accounting practices are steep you know have have you recently doubled down on their antiquated and arcane notions that data is not a balance sheet asset but it really I think is an imperative for organizations to behave as if it is so so would you extend that to saying that data teams should reside within the business rather than in IT yes and and the CDO ideally you know being a business function but perhaps part of a triumvirate if not you know one foot in business maybe another foot in technology but the organizations that I think are really crushing it are those where the CDO has a real close alignment to if not direct reporting structure into the the business like the the COO or the CEO so another question that comes up I want one more thing I was going to say there Tony I've actually seen some evidence and I'm starting to research this organizations that have entirely disbanded the CIO role altogether in favor of bifurcated organization where there's a a CTO managing technology and a CDO responsible and accountable for data assets I just met with a client a couple days ago who said yeah we just didn't see any reason to have a CIO anymore so I think this is a trend that's going to continue well you inadvertently answered Frank's question there too oh sorry there we go with the last couple minutes here this question comes up a lot too you know what makes a good CDO yeah there's there's other research that I've done on that so in others as well this is a great study out from Gartner recently on that testing some other hypotheses but you're a great CDO obviously aligned with the business having a strong degree of data literacy being able to understand the the unique kind of economics of data and I didn't get into that here but we touched on it in my workshop yesterday on how traditional economic models like supply and demand and productivity frontiers and marginal utility and all that econ 101 kind of stuff was all designed with traditional goods and services in mind and nobody's really thought about how do they apply or break down or need to be recast in the in the context of data data operates very differently than other kinds of traditional goods and services and a good CDO really understands that deeply and can lead the organization to take advantage of those unique kinds of characteristics there are sorts of other soft skills and and probably some technical skills as well that that go into the mix but I think a real strong awareness of of data is unique characteristics and how to take advantage of them is is is foremost so do you see a specific chief analytics officer role being desirable yeah in larger organizations there's certainly a need for an analytics officer to set up an analytics center of excellence to to enable self-service analytics across the organization to do analytics governance in addition to data governance that may be a lot for a CDO alone to take on again it just depends on the culture the way an organization is set up and to some degree the size and really the amount of data that it deals with and by the amount of data I'm usually talking about the breadth of data the variety of data which is a much more telling indicator than than the volume of data okay uh we are out of time I know there's a few more questions but we managed to get through more than I was expecting so don't thank you so much uh really appreciate your insights here we're going to take a short break now uh in the meantime we encourage you to network with the speakers and other attendees through the spot me app and uh we'll see you back for our sponsored presentations in approximately 15 minutes at the top of the hour 12 p.m pacific 3 p.m eastern we'll look forward to seeing you then thanks very much everybody