In my last posting I suggested the possibility that perhaps the role of chief data officer warranted reconsideration. The thinking in support of that reconsideration was that creating a new stove-piped organizational role, albeit an important one focused on the role of data within the enterprise, might not be the best approach given that most enterprises already have a Chief Information Officer. Since “information” is a higher form of “data” one can see how data could logically be considered within the domain of the CIO.
It could be easy to interpret the above as a criticism of what is intended as a thoughtful and well-reasoned effort to establish parity – perhaps even primacy – for data in the minds of the enterprise. If the rationale for a CDO is that data is important to the enterprise, then there certainly is no argument. But I think the real question is why data is not getting the priority within IT that its importance deserves, or that the presumed remedy is to create a new parallel group in the organization.
In deciding where to situate a data-centric role like the CDO, I’d suggest that enterprises drill down further than the high level notions of IT or LOB. Part of the reason is that such acronyms are convenient, but somewhat arbitrary, terms that create an artificial depiction of real world enterprises. For example, terms like LOB or “the business” are really catch-all references for every part of the enterprise outside of IT. Perhaps only a technologist would have such diverse organizations as finance, marketing, sales, manufacturing, customer service/support and others be summed up with a single term that effectively means “everyone in the business, other than IT.” Similarly, IT itself spans a pretty diverse range of disciplines (albeit all focused on technology in some way) encompassing infrastructure administration, application development, networking, security, end-user support, and a range of other responsibilities. Terms like IT and LOB may be handy to use, but they violate that famous advice to “make things as simple as possible, but no simpler”, at least in terms of where responsibility for data should reside.
Another, more nuanced approach is to consider organizations in terms of a hierarchy of operations, recognizing that not all operations are equal in terms of the value they deliver to the enterprise. In looking at IT, I think a helpful starting point can be found with Gartner Group. Gartner defines a layered PACE model of technology that is composed of three different kinds of systems: systems of record, systems of differentiation, and systems of innovation.
- Systems of Record support core transaction processing and manage the organization's critical master data. The rate of change is low, because the processes are well-established and common to most organizations.
- Systems of Differentiation enable unique company processes or industry-specific capabilities. They have a medium life cycle but must adjust to accommodate changing business practices or customer requirements.
- Systems of Innovation address new business requirements or opportunities. These are typically short life cycle projects (zero to 12 months) using departmental or outside resources and consumer-grade technologies.
While the enterprise needs systems of record to do the basics of business, those systems do not help the business succeed in a competitive market. They deliver the technology and business equivalent of “plumbing.” But they are the foundational elements for delivering systems of differentiation and innovation.
I would argue that CIOs should not – and do not – want to focus on plumbing. That’s not a knock on the importance of plumbing; it’s merely the recognition that it’s not the source of competitive advantage. I would also argue that data is an area, where when it’s done right, you can achieve differentiation and innovation. But to do it right involves a strong awareness of the technology context in terms of how data is acquired, how it is managed, how it is leveraged, and potential threats to its integrity.) Theoretical discussions about data and information are interesting, but in the real world any form of data that is of use to the enterprise is delivered via technology.
But, to assume their rightful role in terms of how data is used, CIOs need to find ways to delegate some of their other tasks – those that focus on support for “systems of record” - and refocus in areas that deliver that aforementioned differentiation and innovation. And that is where cloud computing can play a part. By embracing cloud architectures, organizations can move their technology attention up the stack upon solutions that deliver the value that helps the enterprise compete, while delegating the care and feeding of systems of record to others.
In my next posting, I will take a look at the specifics of Trillium’s cloud offering and see whether it does or does not support Gartner’s PACE model. As an enterprise data quality solution that is delivered via a SaaS, cloud deployment model, Trillium Cloud allows an organization to delegate much of the administrivia of an enterprise software deployment and still gain all the business benefits. In doing so, it can also help transform what once were static systems of record into systems of differentiation and innovation.
But of course, the devil is in the details! More to come.