How boards can enable CDOs to become strategic business enablers

Boards need to guide conversations that are required for the development of a data strategy to unlock analytics and AI opportunities.

In brief

• Boards have an important role to play in getting the data conversation started and in challenging the management team to ensure the opportunities presented by data, analytics and AI are being explored.
• Boards can offer valuable support to CDOs to ensure their voice is heard when they argue for the resources required to deliver on the ambition set out in the data strategy.
• Boards need to ask who in the organisation sponsors the data strategy and if the strategy aligns well with the organisation’s key areas of focus and value.
  

Every organisation and every business function can benefit from making better use of data, analytics and AI in decision-making, operations and risk management. A Chief Data Officer (CDO) can provide the capability and expert knowledge to realise those benefits. The CDO can also act as a crucially important bridge between the business and the technology function translating IT outputs into solutions that drive value creation.

The EY Ireland CDO Report 2022 canvasses the emerging role of the CDO as a strategic enabler of every business that is serious about maximising the value of data as a decision support tool.

The CDO’s role is not merely technical, however. The CDO brings the capability to unlock the value of an organisation’s data and the agility to manage volatility by providing the insights required to help the business make the strategic shifts necessary to ensure future survival and profitability.

Furthermore, at a time when privacy and data security are subject to intense scrutiny and increasing regulation, organisations need CDOs to lead the debate on protection and the use of data and AI and create the supporting data policy frameworks.

The potential of CDOs to deliver these and other benefits is being hampered in some businesses by a lack of clarity in relation to the nature of the role and its position within the organisational structure. That lack of clarity can lead to confusion and conflict in relation to the roles and responsibilities of the CDO, the CTO and the CIO. This, in turn, can result in a failure to develop a clear data, analytics and AI strategy for the organisation with often fatal results for digital transformation efforts.

Key questions boards need to ask

This highlights the critical importance of board support and sponsorship for the overall data agenda. Without that buy in, CDOs will likely encounter levels of friction with other business units and departments that will at best make their jobs more difficult and at worst render their role ineffective.

It is also imperative for organisations to have a well governed data strategy to move fast with the adoption and implementation of AI.

Here are some pertinent questions for boards to ask as they seek to prompt and guide discussions around the data agenda:

The board has a critically important role to play in getting the data conversation started. The responsibility for developing the data strategy rests with the CDO and the C-suite team, but it is up to the board to prompt the discussions that will help shape the strategy.

The board should also challenge the executive management team to ensure the opportunities presented by data, analytics and AI are being explored and exploited to the full. This will, in turn, help to focus minds on the new opportunities presented by the targeted use of data and AI, and on how to maximise the value of the data created within the organisation.

That includes all aspects of how data is gathered, stored, curated, and utilised to deliver value to the business. That will necessarily involve a clear delineation of responsibilities between the various function holders including CDO, CTO, and CIO. Once again, the board should prompt and help steer the discussions on the division of roles.

There is also a requirement for deeper engagement with the data and AI agenda on the part of boards. One of the challenges frequently faced by CDOs is the unrealistic expectations placed on them as a result of gaps in knowledge and understanding of what is achievable through data, analytics and AI. Boards should be in a position to challenge the executive team in relation to the realism of the data and AI strategy.

That deeper engagement will give boards the broad overview necessary to understand the pushback CDOs often receive from C-suite level leaders. This resistance tends not to come from the CEO but from other business unit or department heads who lack appreciation for the value data, analytics and AI can bring to the table.

By demonstrating clear buy-in for the data agenda boards can offer valuable support to CDOs in dealing with that resistance. Boards can help to ensure their voice is heard when they argue for the resources required to deliver on the ambition set out in the data and AI strategy and realise the potential value it offers for the organisation.

Visible board engagement and support for the data and AI agenda will also send a clear signal that should help to secure cross-organisational buy-in for the new projects and changes to work practices in relation to data collection and utilisation which will inevitably be required.