An experienced data chief reveals how CDOs work with other executives to steer data-driven initiatives, like digital twins, to success.
Any firm that gets a tight grip on its data assets is best placed to run successful digital transformation projects. One way to help your organization makes the most of its information is to appoint a chief data officer (CDO). An effective CDO will ensure your business can use its data to power its digital transformation efforts.
What is a CDO and what’s their role in an engineering company?
The CDO is responsible for organization-wide governance, management and exploitation of information. They oversee how a company’s employees use data in a variety of systems and services, including business intelligence, advanced analytics and artificial intelligence (AI).
A CDO establishes an enterprise data strategy. This strategy ensures there are frameworks for data use in place and that an effective insight-led culture exists within the organization, with clearly defined roles and responsibilities for using data in line with rules and regulations.
CDOs provide ongoing guidance on data use. In the case of an engineering company, this might mean advising on the introduction of new technologies, creating closer alignment between datasets or working with peers to identify digital transformation opportunities.
How is the role of CDO connected to digital transformation?
An effective CDO does much more than simply focus on technical aspects, such as deciding how information is brought together in a data lake. The best CDOs help the business understand the value of its data. They develop a strategy that details how information can be exploited safely and successfully to create a competitive advantage.
Caroline Carruthers, former CDO for Network Rail and now CEO of consultancy Carruthers and Jackson, says smart data chiefs define a purpose for the collection of information. Whether it’s to improve automobile aerodynamics or meet sustainability goals during the construction of a building, CDOs establish the digital transformation goal first and then think about the data required to reach that destination.
“Know the purpose of what you’re using data for,” Carruthers said during an April 2023 roundtable discussion. “The most successful companies understand exactly what the purpose is of the data that they’re collecting, what they’re doing with it, and they can attribute value to it.”
What’s the difference between a CDO and a CIO?
When it comes to senior technology positions, CDOs are very much the new kids on the block. While many enterprises are still to appoint their first CDO, almost every big organization has a chief information officer (CIO). What’s more, many of these companies will have had a CIO in situ for 20 years or more. So, what’s the difference between a CDO and CIO?
While CIOs are generally in charge of the underlying IT infrastructure and strategic technology decisions within an organization, CDOs are focused squarely on the data assets that are held with these systems. They concentrate on how the business can best exploit its data assets.
CIOs and CDOs, therefore, should not be seen as competitors but as digital transformation allies. What’s crucial to understand is that an effective digital transformation will never be achieved unless an organization has a tight grip on its data. And that’s where CDOs excel.
What skills does an effective CDO possess?
CDOs take a collegiate approach. While the rest of the business will turn to data chiefs for guidance on information management, CDOs and the teams can’t afford to work in isolation.
Carruthers says she spoke with a group of CDOs recently and they rattled through a set of skills that define the modern data chief. As well as having the credibility to define a data strategy, the CDOs mentioned a broad collection of important skills, including empathy, visibility, authenticity, plausibility, transparency and the ability to drive cultural change.
CDOs work with their line-of-business colleagues to establish how data can help the business achieve its strategic goals. CDOs then take these objectives to their team and ensure a supporting underlying technological infrastructure is in place.
Digital transformation specialist Matt Ballantine said at the same roundtable that the skills that a successful CDO requires vary according to sector and organization: “Now, with the management of data, as with the management of technology, there isn’t a set pattern anymore. When it comes to thinking about CDO roles and skills, it depends on the context of the organization.”
That’s a sentiment that resonates with Carruthers, who says effective data chiefs adapt their skills to their working environment: “The CDO needs to be the person looking after the data asset for the good of the company, but their role changes depending on what the organization needs to do at any one point in time.”
What is the key priority for engineering CDOs?
Engineering firms collect a huge amount of data that’s used to fine-tune organizational processes and services, all the way from the design and manufacturing of a product to its delivery to customers and onto its long-term maintenance. With a CDO in-situ, your firm will be best placed to exploit these opportunities.
Carruthers says the biggest opportunity for engineering CDOs is to use digital twins. Using a combination of simulation software, internet-connected sensors and machine-learning algorithms, engineering firms can use digital twins of a physical object, such as a car or a factory, for testing, simulation and monitoring purposes.
Engineering firms can use digital twins to track the accuracy of processes and respond quickly to fast-changing market conditions. Examples might include optimizing a factory layout, simulating operational processes, improving product design, and training and simulation.
In a report on the prospects of digital twins in industrial facilities, market researcher Verdantix suggests spending on the technology reached $787 million in 2020 and will grow rapidly to hit $27.6 billion in 2040. Yet despite this potential, Carruthers issues a word of caution for engineering CDOs looking to use digital twins.
“I think the biggest hurdle is about trying to be a perfectionist,” she told engineering.com. “Some engineering firms might think they can use digital twins to solve every problem. But success is about finding a real-world use case. That’s what we should be thinking about when it comes to exploiting data and using technology like digital twins.”
What are the other ways that CDOs help engineering firms pursue digitalization?
Digital twins, of course, are just one of a range of technologies that engineering companies use. Other important data-led systems and services include data lakes, business intelligence, analytics, the Internet of Things and AI.
While all these technologies are potential levers to help CDOs make the most of the data their enterprises hold, it’s worth noting that many executives are unconvinced their business has the right tools at its disposal.
Carruthers and Jackson recently published a report on enterprise data maturity that found 63 percent of CDOs believe the technology their organizations have “mostly helps” employees make use of its data, which is hardly a ringing endorsement for sunk investments. One big problem, says Carruthers, is employees often procure data technology without checking whether another function has already bought a similar tool.
“I can remember putting a big IT system in place in Network Rail at one point in time and there was something like 120 different applications that did part of what we were trying to do,” she said during the roundtable discussion. “We literally went back to basics and asked, ‘Does that application solve the problem we’re facing?’ If it does, then you don’t need to fix it—the problem is already solved. But too often, employees are just adding to the sausage machine and nobody’s taking anything off.”
Ashley Cairns, delivery director at Carruthers and Jackson, came to a similar conclusion in the roundtable—too many companies have too many tools: “It’s not a new conversation—we’ve been having the same one for 10 or 15 years. And that’s one of the reasons why there’s so many different visualization and reporting tools. Everybody thinks the one they’ve bought does it better.”
Carruthers and Jackson’s research on data maturity suggests three-quarters of businesses either have a data strategy that sits outside the operating model or do not have one at all. By appointing a CDO with responsibility for the creation of an overarching data strategy, your business can ensure it buys tools and collects data in a consistent manner.
What’s the key take-away for engineering firms?
The amount of data continues to increase, as does the range of tools that your business can use. The priority for engineering firms is to take a step back and focus on long-term digital transformation goals. If you don’t already have a CDO, these experts will put the guardrails in place to ensure your organization takes a mature approach to data use.