Manufacturers: Your CDO Is in the Wrong Department

By Kelly Meyer | Oct 06, 2014

In the big-data world of today, CIOs can no longer be responsible for just keeping the technology lights on. As technology has evolved with Cloud/SaaS, so has the role of the CIO. This person is now someone who has become more integrated into the business and is more involved in how data is used and what data is used to make critical company-wide decisions.

Hence, the skill set of the traditional CIO has changed. When looking to hire a CIO or someone to take on this role, companies will now have to hire people who have business acumen and knowledge, and who are capable of engaging with and having a seat next to other executive officers at the executive table. This is even more critical as the manufacturing industry is starting to re-emerge and grow again. Manufacturers need to be prepared.

If you haven't already, you should consider creating the position of Chief Data Officer as the natural foil to your CIO counterparts. Your new CDO should have the technology and people skills, as well as the confidence to roll up their sleeves and go deep diving in the sea of data. Good CDOs do just this, and they can be trusted to resurface from that sea, bearing a treasure chest of data-backed ideas and strategies to drive the company's sales forward.

The wrong department

Many manufacturers have placed the CDO in the IT department. This is a natural choice at first glance, because he works so intensely with computers and because he performs a specialized version of the CIO's duties. Unfortunately, working in the IT department gives the CDO endless distractions from his main task. He is expected to lead the IT department, handle urgent IT issues, and tackle other tasks that don't leverage his highly specific skill set. Reporting to the CIO might undermine the CEO's intent of this role.

CMOs and marketing departments have stepped in because they need this data, but companies really need someone who can take ownership over the data and not only compile it, but know how to analyze and present it for others in the company to use. Your new CDO should be independent enough to move across all lines of the business and at a C-level rank in order to make decisions and have the support to do so.

So, where does this leave us then?

Unfortunately, most manufacturers are capturing data but not using it for their competitive advantage. There needs to be someone within the organization who can take the available data, manipulate it, and provide it to everyone in the organization in a format that is meaningful to them.

Many successful manufacturers have realized the value in collecting, storing, and analyzing large amounts of data, but are challenged with how to leverage the ever-deepening ocean of data to best forecast trends and increase company sales. They need help. This role does not fit for a CIO, CTO, or a CMO. Manufacturing businesses need to employ a CDO to become the Business Intelligence leaders within their organization. The primary goal of the CDO is to help companies effectively compete, using their data.

In the new era of business intelligence, data regarding customers, sales, production and more can be automatically collected by a manufacturing company's enterprise resource system (ERP), and then good BI software can provide actionable data for company decision-makers. With a CDO and the right tools, you can use your data to drive sourcing and procurement efficiencies, improve collaboration with your suppliers and provide visibility and data insight across your entire value chain. You can also synchronize operational processes using real-time production insights and manage product life cycles and innovation process for ROI.

Time to rethink your CDO's placement?

Now that you know what a CDO is and what value they bring to your company, if you haven't already, I challenge you to rethink that person's placement within your organization. At a time when companies have recognized the power of their data, they need someone internally positioned who can help drive executive decisions with that data.

Business Intelligence is not just a buzzword; we are in a new era of information and manufacturing/distribution companies need it.

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