Gartner positions Experian as a Challenger in Magic Quadrant for Data Quality Tools 2014

Gartner’s 2014 Magic Quadrant for Data Quality Tools has listed Experian Data Quality for the first time, positioning Experian as a ‘Challenger.’ At Experian Data Quality we believe this reflects our success in providing excellent data profiling and discovery solutions that help organisations better utilise and understand their data. We believe Gartner’s recognition of Experian Data Quality in this way reinforces our ongoing success in providing customers across the globe with proven data quality technology to meet their business requirements.

At Experian Data Quality we hold true to a few core principles in order to service our clients as effectively as possible:

• Ease of use – Our products must be accessible to business users outside of IT so they can be leveraged quickly and effectively with the wider business objectives in mind.
• Time to value – Our solutions must be quick to implement and begin delivering value in hours rather than days or months.
• Flexibility – We must provide a wide range of deployment options so our customers can leverage their existing architecture.
• Data quality experts – We set the standard in terms of customer advice and support.

We take pride in delivering against these principles and ensuring we constantly drive a culture of innovation that best meet the needs of our clients. From this we look forward to continuing to build strong data quality solutions for years to come.

Introduction

90% of organisations say data is changing the way they do business

UK organisations are starting to recognise the true strategic value of data as a competitive differentiator and customer experience enhancer; which in turn is increasing the potential value of data as a source of revenue. Therefore in recent years there has been a growing importance placed on the need for reliable, consistent data, that’s accessible, easy to use and in the right hands to make the connection from data to value. Until recently the responsibility for data has been largely shouldered by the CIO.

According to Gartner, CIOs are “responsible for planning, choosing, buying and installing a company’s computer and information processing operation. They oversee the development of corporate standards, technology architecture, technology evaluation and transfer; sponsor the business technology planning process; manage client relations; align IT with the business; and develop IT financial management systems.” CIOs are not typically responsible for managing data.

As the value businesses place on data increases, they are looking for a data owner to extract this effectively to improve business insight and drive better customer engagements, that in turn yield greater sales and increased loyalty, which ultimately results in capital.

On average CIOs cite savings from investing in data quality tools to be less than £1m. Comparatively, CDOs state this to be in excess of £5m

Whilst data provides numerous opportunities for businesses it can also bring a number of liabilities. Following the credit crisis, regulation and governance have taken on an increased significance particularly in financial institutions. If a breach occurs organisations run the risk of untold reputational and financial damage and as a result it is now more important than ever to have a dedicated senior data owner.

CIOs are calling out for a CDO role (92%) to release the data pressures they face and enable a corporate wide approach to data management

CIOs are calling out for a CDO role (92%) to release the data pressures they face and enable a corporate wide approach to data management

“The CDO is not the sole individual responsible for data within an organisation; he or she should be regarded as an enabler…Ultimately the management of data should be a corporate wide responsibility with the CDO spearheading its enablement.”

Challenges facing the CIO and the dawn of the CDO

There is no doubt that organisations recognise the value of data today with 90% of CIOs saying that data is changing the way their organisation does business. Data however brings with it a host of challenges that organisations must address if they are to effectively exploit it as a strategic asset. Most notably CIOs report challenges with increasing volumes of data (44%), real-time processing (44%) and data capture and visualisation (41%) amongst other things.

Whilst CIOs see increasing volumes of data as a key concern, they may in fact be under estimating the growth of data. Over the next 12-18 months, over half (58%) of CIOs believe the volume of data their organisation needs to manage will increase on average, at a rate of 28%. However CDOs believe such an increase is inevitable, but will continue to grow at a much faster rate. In some cases CDOs report a tenfold increase in the next year alone.

With such a rich and vast resource at their disposal, businesses are seeking ways to best utilise and monetise their data. According to CIOs there is still some way to go. 77% of CIOs believe data is a valuable asset in their organisation that is not being fully exploited and 70% believe they have underutilised data in their business that is costing them money to store.

The challenge for CDOs is getting the business to place a greater value on data as a financial asset. Businesses are slowly starting to understand this value. Indeed within one enterprise both the data and finance departments work in close proximity with each other, highlighting the value they see in data. According to one senior owner who reflects general CDO sentiment, “There is no division where you can’t add value by using data.” [Davide Cervellin, Ebay]

In order to effectively utilise data, data management needs to be higher on the senior management agenda. Limited budget (51%) and volumes of data (47%) are the key barriers preventing CIOs from exploiting their data assets further (Figure 1).

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CIOs express a lack of understanding of how to use analytics (47%) and lack of understanding of the financial impact of data quality issues (41%) and that they believe these are stopping businesses from using their data more effectively. CDOs are better placed to exploit data value, with the majority of CDOs citing backgrounds focused on working with and utilising data (Figure 2).

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According to one CDO “The CDO role is focused on data governance, monitoring, processes, lifecycle and sourcing, rather than technology and therefore should come from within the business not from IT.” [Vincent Benita, BNP Paribas]

A CDO requires an appreciation of technology, but more importantly a firm grasp of the business to be able to align with its objectives. This business understanding is essential to enable them to coordinate a corporate wide approach to data management, extract value for customers and drive operational efficiency to create competitive advantages. The CDO role helps coordinate this by acting as an enabler who spearheads this approach, but ultimately the responsibility is shared.

However CDOs do require more support, and as such data needs to be higher on the agenda. A C-level representative will help to put data on the corporate agenda. However CDOs can’t rely solely on this and therefore need to implement a structure around them that supports a corporate wide approach to data management (Figure 3). A significant majority of CDOs cite the current shortfall in relevant skills in data analytics as a barrier holding them back from utilising data more. Only when the strategic value of data is realised at board level can businesses be in a better position to exploit data. As one CDO describes it, “People appreciate that data is important, but quantifying its value is challenging.”

Figure 3. Typical data team structure with a CDO

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Increased opportunities created by managing data accuracy

For all the possibilities that vast volumes of data can create, much of its benefit will be lost if the data used is inaccurate. Ensuring the data is of optimal quality should be an ongoing priority for all data-driven businesses. Over three-quarters (76%) of CIOs admit the quality of data within their organisation could be improved to some extent.

Similarly, CDOs feel there is room for improvement when it comes to data quality and there was a consensus that data will deliver a stronger competitive advantage.

Data can play a fundamental role in building a competitive advantage for organisations, but challenges in data quality mean that organisations may fail to capitalise on these opportunities. CDOs cite both Customer Services and Sales as departments most likely to experience significant problems with their data quality. As one CDO notes, “Customer touch points are a reflection of the brand and therefore present the biggest data challenges.” CIOs cite lost revenue opportunities (43%), less than optimal customer experiences (42%) and difficulties using data to drive strategic decision making (33%) as the biggest consequences of inaccurate data in the last 12 months (Figure 4).

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CDOs recognise the relationship between high quality data and an improved customer experience. “Data that improves a customer experience and develops long term relationships will have a positive impact on sales, ultimately improving the financial position of the business.” This acknowledgement of the link between high quality data, customer experience and ultimately revenue is clear evidence that CDOs are ideally positioned to escalate data up the board room agenda and champion its use amongst internal stakeholders.

Should businesses succeed in optimising data quality, the benefits are there to be enjoyed. Indeed, CIOs believe they could increase their profits by an average of 15% if their data was of the highest quality. Interestingly, we found that on average CIOs cite savings from investing in data quality tools to be less than £1million. Comparatively, CDOs state this to be in excess of £5million (Figure 5). Perhaps understandably with the returns clear to see, CIOs are most likely to be currently focusing on developing their customer data quality (60%) over other types of data.

As the majority of CDOs conclude, data is there to build better and more meaningful relationships with customers, and should they get this right, revenue will benefit in the long term. As one CDO said, “We are already monetising the value of data by creating increased revenue from increased operational efficiency.”

Figure 5. CIOs cited saving from investing in data quality tools over a 12 month period

The reason data quality projects fail

This report has already highlighted that businesses must address data quality issues if they are to be truly data-driven. CIOs however are often looking for guidance in this area. They consider the biggest failing points in data quality projects to be a lack of knowledge about the importance of data quality (40%), lack of investment in appropriate technology (34%) and lack of relevant skills/staff (28%) (Figure 6). Furthermore one in five businesses (21%) report a lack of support from the board.

Figure 6. Biggest failing points for data quality projects according to CIOs

A lack of data ownership also presents problems for CIOs as data quality soon becomes reactive and isolated. 63% of CIOs believe it is difficult to make decisions because no one in their organisation seems to own the data. Conversely, for CDOs whose responsibility it is to own and champion data within their organisation, only a select few believe this to be the case. According to one CDO, “Data is now one of six major bank wide initiatives.”

CDOs believe data management needs to be more organised and better governed. Utilising data effectively needs to be a company wide initiative, where the business as a whole takes responsibility for its development. In certain situations this is already happening.

“The CDO is not the sole individual responsible for data within an organisation; he or she should be regarded as an enabler. A CDO will help individuals to understand their data problems, take responsibility for them and utilise the CDO function on a semi consultancy basis to support the business. Ultimately the management of data should be a corporate wide responsibility with the CDO spearheading its enablement.”

It’s clear businesses do realise that data plays a fundamental part in today’s business model and without a CDO in place the challenges are much more acute.

Less than a third (31%) of CIOs have centralised data management within their organisation, where guidelines around data are standardised and rolled out across the business. However, in most cases (68%) data quality management is fragmented, either managed at a departmental, country level or not at all. For CIOs trying to effectively utilise and exploit data, such a disjointed approach is counterproductive. With individual departments adopting their own approach to data quality, these businesses do not have the necessary control and influence to implement a successful data strategy (Figure 7).

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As we would expect, most CDOs appear to be further along the maturity scale when it comes to data management than CIOs. One CDO notes that, “We have a mature data management strategy, however there is always scope for improvement. As we continue to work with data we are constantly finding new ways to use it.”

Rather than being reactive and disjointed, data and information is proactively managed. However, many CDOs believe businesses can go further. “A cultural change within organisations that is stimulated from the board needs to occur to change the way data is viewed and portray its significant importance” one CDO concludes.

The case for the CDO and the role of the CIO

For CIOs, already inundated with other business demands, the need to exploit data creates a further pressure. In the last 12 months, 60% of CIOs report they have felt pressure to provide higher quality data and 59% have felt an increased expectation to provide business insight and analytical data at a faster rate to the business. Nearly two-thirds (63%) believe their current role fails to cover the majority of responsibilities a CDO would have. Instead, the vast majority of CIOs (92%) would like to see a Chief Data Officer role created at some point in time, with 61% wanting to see an appointment within the next 12 months. Ultimately 76% of CIOs think CDOs will be an established board level role by 2020. CIOs are able to provide a range of compelling reasons why a CDO role is required, the most frequent responses were to capitalise on big data opportunities (44%), to provide a consistent approach to de-risk data driven projects (41%) and to manage increasing regulation (38%) (Figure 8).

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Rather than wanting another IT professional to come in and absorb the pressure created by increasing data levels, CIOs are in need of a dedicated data specialist who can build an effective and long term data strategy. When pressed on how data responsibilities should be divided between CIOs and CDOs, CIOs believe it is the responsibility of the CDO to influence corporate strategy, define data management strategy and translate this into tactics (45%) and to be the guardian of data quality within the organisation (40%). CDOs themselves think improving company revenue through effective governance of data should be a responsibility which lies with them, rather than CIOs. Furthermore, CDOs believe their core purpose is to create a competitive advantage for the business, ultimately monetising data from improved business insight and customer understanding (Figure 9). According to Gartner, “CIOs should view the CDO as a peer and partner who can manage data and who has the knowledge, background and skills to do so, which allows CIOs to focus on the more-than-full time job that they already have.”

Figure 9. Division of data responsibilities

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Businesses must treat any new role with a degree of caution. Clarity is key, not only to ensure that the business fully understands the benefit of a CDO, but to avoid any friction over data ownership responsibilities. Around half of CIOs, for example, still want to be seen as trusted advisors on data across the enterprise (52%) so there is potential for these roles to overlap and cause confusion. Most CDOs recognise this and stress that transparency over their role at the outset is critical to its success. According to Gartner, “The CDO owns a few things, but coordinates the use of data in other places. This is exactly like a CFO, who owns a few financial processes, like consolidation and treasury, but other than that coordinates the use of capital throughout the organization.”3 Should a business decide to appoint a CDO or a similar role it must be made obvious what the strategic value is to the business. As such, it is imperative that CDOs have a clear understanding of the business’ objectives, and how the use of data can effectively deliver on it. As one CDO concludes, “The CDO role must sit within the business and not from IT. The CDO role is more around data governance, monitoring, data processes, data lifecycle and data sourcing rather than IT and this reflects how it should be structured.” [Vincent Benita, BNP Paribas]

Conclusion

In the absence of a senior data owner, CIOs have found themselves driving data management, often by default rather than design. CIOs have already expressed that poor quality is having negative implications on revenue (43%) and customer experience (42%) and they have concerns about the potential implications if their organisation does not meet regulatory data standards. With the volume, depth and variety of data set to increase in the coming years, the research shows that UK businesses are faced with an increasingly complex challenge. Some organisations are already recognising the strategic value of data and have proactively addressed it with the implementation of a board level senior data owner – the Chief Data Officer.

A data enabler

The CDO acts as a business enabler that spearheads the corporate wide responsibility of data. This dedicated focus will help extract the full value of data, facilitating the improvement of data quality to meet regulatory standards, drive operational efficiency and encourage customer engagement. All of which benefit the organisation with greater sales and increased loyalty, which ultimately, results in revenue.

Bridging the gap of data, people and technology

Where comparatively CIOs often have a technology background, CDOs should have an appreciation of this, but should derive from business backgrounds and be aligned to corporate objectives. Where previously the CIO was unable to have a dedicated focus on data initiatives, a CDO has the ability to focus on these.

CIOs highlighted a lack of understanding of the true value of data across organisation. To overcome this and translate the corporate wide value a CDO must be a strong communicator. Communication skills and a vision aligned to business objectives will break down complex data barriers and provide a more easily interpretable approach for internal stakeholders. The implementation of structures around the CDO, such as data stewards and data analysts that sit within individual teams in the organisation encourage a corporate wide approach to data management, facilitated by the CDO. This committed focus will accelerate the businesses ability to achieve their key initiatives; driving the value of data and placing it firmly on the corporate agenda.

Whilst cultural changes across the organisation will be required, increased understanding and bold leadership will help to make this transition easier.

However, CDOs should not underestimate the knowledge of their colleagues, and both the CIO and the CDO should view each other as a ‘partner and peer’, working together to put systems and technologies in place that support the achievement of business objectives and a centralised approach to data management.

A seat on the board

Data requires a dedicated focus of which over two-thirds (63%) of CIOs felt they weren’t able to achieve with their current role. It’s clear to see why CIOs are calling for a dedicated board level role that can alleviate this pressure; enabling CIOs to focus on their main responsibilities, whilst the business continues to extract value from its data assets. The vast majority of CIOs (92%) would like to see a CDO role created at some point, with 61% wanting to see an appointment in the next 12 months. This reflects Gartner’s predication that, “By 2015, 25% of large organisations will have appointed Chief Data Officers.”4 The majority of CDOs felt that a C-level role was necessary to provide a fully collaborative corporate wide approach that would filter down and align the entire business. It’s evident that a senior data owner is no longer a convenience, but a necessary business requisite that drives strategic value and helps meet corporate objectives. It’s now time for senior management to act, and with the support of CIOs - the dawn of the CDO is very much on the horizon.

Statistical summary

The volume, depth and variety of data now available is making data driven decision making a very real possibility for organisations. After its people, data is arguably the most valuable asset an organisation has and companies are switching on to its strategic and commercial value.

The research finds that in the absence of a CDO, it is the CIO the business looks to to provide higher quality data. But for a CIO already overwhelmed with other pressures, the demand for higher quality data is an unwelcome responsibility and due to other commitments, the approach to data management often becomes reactive and disjointed. In turn the true value of data is difficult to realise with businesses unable to fully capitalise on the opportunities that high quality data can bring. Inaccurate data is found to not only undermine customer experience but also impacts business revenue and growth prospects. CIOs are calling for an expert, a CDO, who can effectively define the organisation’s data strategy and become the guardian of data quality. Such is the demand that CIOs believe the CDO will become an established board level role by 2020. CDOs themselves highlight the impact that their role brings particularly in terms of exploiting the value of data to improve business decisions and customer experience. As a relatively new and still evolving role in UK organisations, CDOs are quick to stress that role clarity and structure is vital to maximise the value they can bring to their organisations.

Some of the key findings from the CIOs and CDOs include:

Challenges facing the CIO and the dawn of the CDO

• 90% of CIOs believe data is changing the way their organisation does business, with the vast majority of CDOs also agreeing
• 77% of CIOs and the majority of CDOs believe data is a valuable asset in their organisation that is not being fully exploited
• Over half (58%) of CIOs believe the volume of data their organisation needs to manage will increase in the next 12-18 months – yet nearly all CDOs believe such growth is inevitable
• 70% of CIOs think they have underutilised data in their business that costs them money to store
• For CIOs the key barriers to more effective exploitation of data assets are limited budgets (51%), volumes of data (47%), lack of understanding about data analytics (47%) and lack of understanding of the financial impact of data quality issues (41%)
• CDOs are more likely to cite shortfalls in relevant skills and difficulties in accessing data as the most common barriers to utilising their data

CIOs are calling for an expert, a Chief Data Officer, who can effectively define the organisation’s data strategy and become the guardian of data quality.

Increased opportunities created by managing data accuracy

• 96% of CIOs have experienced problems as a result of inaccurate data in the last 12 months – lost revenue opportunities (43%), less than optimal customer experiences (42%) and difficulties using data to drive strategic decision making (33%) are the biggest issues
• The majority of CDOs believe data quality issues are most likely to result in a poor customer experience
• 76% of CIOs and over half of CDOs believe there is room for improvement with the quality of data in their organisation
• Current data quality focus is on customer data (60%) and financial data (48%) amongst CIOs
• CIOs believe their business could increase profits by an average of 15% if data was of the highest quality

The reason data quality projects fail

• CIOs believe main failing points in data quality projects are lack of knowledge about the importance of data quality (40%), lack of investment in appropriate technology (34%) and lack of relevant skills/staff (28%)
• CDOs are most likely to blame inadequate project scoping and a lack of value placed on data for data quality failings
• 1 in 5 CIOs report a lack of support from the board (21%)
• 63% of CIOs believe it is difficult to make decisions because no one in their organisation seems to own the data, a view only held by a minority of CDOs
• CIOs note that data quality management is currently fully centralised in just 31% of organisations and 56% think it is difficult to find stakeholders who take anything other than a siloed view of data management
• By way of contrast, the majority of CDOs believe data management is fully centralised and rolled out across the organisation
• 79% of CIOs and the majority of CDOs believe their organisation’s ability to exploit available data to drive the business forward could be improved

The case for the CDO role and the role of the CIO

• 92% of CIOs would like to see a Chief Data Officer role created at some point within their organisation, with 61% wanting to see an appointment within the next 12 months
• The key reasons for wanting a CDO are to capitalise on big data opportunities (44%), to provide a consistent approach to de-risking data driven projects (41%) and to cope with increasing regulation (38%)
• 63% believe their current role fails to cover the majority of responsibilities a CDO would have
• CIOs believe it is the responsibility of the CDO to influence corporate strategy, define data management strategy and translate this into tactics (45%) and to be the guardian of data quality in the organisation (40%)
• On top of these responsibilities, CDOs believe it is also their duty to be seen as a trusted advisor on analytics, improve revenue through effective governance and use of data, and set and enforce data governance policy
• 69% of CIOs have ambitions to be a CDO sitting on the board of their current organisation or another within the next five years

UK organisations are starting to recognise data as a competitive differentiator and customer experience enhancer, which in turn is increasing the potential value of data as a source of revenue. Some have put data high on the corporate agenda and have already taken the step to create a dedicated board level CDO role to manage and capitalise on their data assets. In most organisations however, ultimate responsibility for data sits with the CIO who in the last five years has shouldered responsibility for everything including: mobile, social and cloud, and who arguably has become a makeshift CDO by default rather than by design. With CDOs readily articulating the benefits they bring to their organisations and CIOs explicitly calling for the creation of a CDO role in their organisations, the time is ripe for organisations to re-evaluate how future fit their approach to data really is.