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The CDO and the Delivery of EnterpriseValue

What do you get when you cross responsibilities for informed enterprise decisions, successful business outcomes and overall data optimization?

Answer: The new face of a Chief Data Officer (CDO).

Because the CDO owns the intangible information assets of the organization, they will be measured by the value data provides to their operations as well as to their business outcomes. The CDO is in the unique position to put together this framework, and the purpose of this paper is to guide you through that process and to outline the opportunities achievable that can influence revenue.

The enabler for the execution of the enterprise strategies and tactics which, when successfully

executed, result in the capture, creation, execution or protection of value to the organization, is

information. This information is prepared from the innovations, knowledge, heard inferences

and learned inferences of the organization. The CDO is responsible for ensuring the optimal use

of the information available. The value of the information is computed based on its participation

in delivering organizational value in a way similar to other intangible assets of the organization

such as patents, trademarks and other intangible assets. There are some key concepts that must

be addressed prior to providing the process for determining the effectiveness of the CDO.

How Information is linked to organizational value

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Figure 1 | Business Model Canvas as presented in Value Proposition Design, Osterwalder, 2014

RevenueCost Structure

Partners Activities

Activities

Resources

ValuePropositions

CustomerSegmentsinformation

Channels

CustomerConsumer

relationships

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Each strategy and tactic of the organization is

comprised of a number of factors that are

brought together for the explicit purpose of

successfully executing a value proposition.

These factors can be the partners and resources

participating in the strategy and tactic, the

customers, the delivery methods, the cost

structure and other factors. For the purpose of

this paper, we will use the Business Model

Canvas, as described in Value Proposition

Design (Alexander Osterwalder, 2014).

Rivers of information flow through the Business

Model Canvas, and when collaborated among

the actors participating in a specific strategy or

tactic, influence the success or failure of a value

proposition. This influence is the measurable

value of the intangible information asset.

Data in the form of innovations, knowledge,

heard inferences and learned inferences is

rarely used directly. While the value of

information is measurable, it is somewhat more

difficult to directly or indirectly measure the

value of data. Data is the raw material for the

finished goods of information, but just like other

intangible assets, only obtains value through its

usage.

The value of information is enhanced when it is

used in critical situations. For example,

information that helps Apple thwart off the next

great competitor to the iPhone is worth much

more than information used to produce a

standard analysis. Generally, the more critical

situation presented, the shorter the lifespan of

the increased value for information. In the

equity markets, there is high value for

information that is immediate and very little

value for information that is 15 minutes old.

There are a number of core competencies which an organization must possess in order to be able to associate the CDO’s activities of influencing the value proposition processes through the use of information. Some of these key competencies, which we will discuss further include:

The CDO Revenue Recognition

Roadmap

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Treating information as an intangible asset of

the organization. Just like organizations which

manage patents or digital assets, a function

specifically devised to manage the information

assets of an organization must be in place.

Understanding the potential role that

information can be used to generate captured,

extended, protected or created value for the

organization. A clear understanding of the

business processes that yield value propositions

and revenue for the organization and the

information that supports that process is

required. The business model canvas has been

chosen as the vehicle to describe the business

processes and the supporting information due

to its simplicity to construct and explain.

Identifying the high value usage of information

and ensure their inclusion in the business

processes. These are commonly the most

disruptive threads in a business model and often

represent mis-executions of the business

processes, fraud or disruptions that require re-

innovation of the business model.

Mitigating the items that constrict the

obtainable value from business processes. The

common items can be:

Lack of trustworthy information (while data

quality is a big piece of this equation, there is

no trustworthy information i f the

stakeholders of the business processes do not

believe it to be trustworthy).

An environment where it is difficult to find the

relevant information in time for it to be used

(fostering an environment where all the data

everyone would possibly need is not

necessarily a good thing because such an

environment could obfuscate what is critical

at the moment).

Lack of understanding of the derivation,

lineage or provenance of information.

Lack of attribution applied to the information,

making it difficult to understand the context

of the information supporting the business

processes.

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Possessing a process which measures and

communicates the value and associated

revenue attributed to the CDO activities.

Understanding and fostering the interplay of

the participants (the CDO, CIO, DGC and DAM,

all in the preview of this paper) in the

recognition of revenue attributable to

information (which is transformed from data in

the form of innovations, knowledge, heard

inferences and learned inferences).

There will always be value obtained for

information as it is consumed in the strategies

and tactics of the organization. However, few

organizations are prepared to capitalize on the

highly critical and short-lived opportunities

and risks presented through information. The

CDO serves as the catalyst to ensure the

exploitation of information in these cases. This

is done by:

Ensuring the inclusion of high value usage of

information in the strategies and tactics of the

organization.

Devising a mechanism to measure the

contribution of information to the strategies

and tactics of the organization.

There are several barriers to the successful use

of information in high value circumstances,

described in this paper as the information value

levers. The CDO, in concert with the other

leaders of the information assets of the

organization, ensure that the information value

levers facilitate the optimal use of information in

these high value circumstances. The CDO should

own a scorecard that measures the continued

improvement of the information value levers, as

the improvement of the information value levers

is a key measurement in the effectiveness of the

CDO.

The effectiveness of the CDO is measured using

two key metrics.

The influence by the CDO in the consumption

of information in the strategies and tactics of

The CDO as the Catalyst for Enhancing the Value of Information

Measuring the Effectiveness of the CDO

the organization. A means to transcribe this

influence is provided in this paper.

The improvement of the information value

levers. A more comprehensive list of the

information value levers is provided in this

paper.

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Information gains a high percentage of the value

proposition achievable from the strategies and

tactics of the organization. Disruptive use of

information (launching a disruption in the

marketplace or influencing the outcome of a

disruption launched elsewhere) captures a

disproportionate percentage of the value

proposition.

1In the Big Bang Disruption , 12 steps are described in

which a disruption manifests itself to an

organization’s value proposition. The effect of the

disruption is a function on the organization’s ability

to wield information. It is only through the effective

yielding of information that the disruptions can be

successfully identified and then translated to the

necessary changes to processes utilized to yield

organization value. It is only through the proper

managing of the influencers of data and the

effective relationships between the CDO, DAM, DGC

and the CIO that this can be achieved.

The CDO will be accountable for reporting the

incremental value achieved by the use of

information influenced by the CDO and the cost

expended to influence the extraction of information

value.

1Big Bang Disruption, Strategy in the age of Devastating Innovation, Downes and Nunes, 2014

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Information Value

Value Proposition

Maximum Value

Achieved Value

Major data leverslimiting attainablevalue are magnifiedin time critical situations

Effectiveness of data governanceInformation trustworthiness

Ability to easily identify appropriate information

Full attributionof Information

Information provenance

Information use accelerator effectiveness

Collaboration effectiveness

Figure 2 | The Value Achievable from Information

Disruptive

Strategic

Tactical

Operational

Transcribing the CDO's influence of enterprise value

In order to transcribe the CDO’s influence of

enterprise value, the mapping of information to

the value propositions of the organization and the

derivation of this consumed information must be

completed. The CDO should be responsible for:

Mapping the information targeted for

consumption in a business model canvas (the

representation of the strategies and tactics of

the organization).

Deriving the data required to have the

necessary informat ion ava i lab le for

consumption just in time for business events

triggering the use of business model canvases.

Measuring the impediments to ensure just in

time availability of information and timely

execution of the enterprise strategies and

tactics.

An effective CDO will be measured by their ability

to influence the high value usage of information.

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The net profit achieved by the CDO’s activities are

the difference between the value achieved by the

intangible information assets of the organization

and the cost of ensuring the usability of this

information through governance, data quality,

metadata, lineage and other programs which

mitigate the challenges that thwart the use of

information in high profile circumstances.

Some examples of real high profile circumstances:

The valuation risk associated with negative

international press coverage caused by a

manufacturing defect in automotive ignition

switches.

The successful market capture of a large block

of cell phone customers by eliminating their

contractual obligations to obtain device

discounts.

The successful thwarting of an SEC audit and

associated press coverage caused by

undetected trade irregularities not surfaced in

compliance reporting.

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Figure 3 | 12 Steps of the Big Bang Disruption Cycle, Big Bang Disruption, 2014

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— Consult with Visionaries (CDO enabled)— Separate little bumps from disruptions (big bangs)— Innovate to determine strategies to thwart

disruptions

— Alter the processes deriving a value proposition— Be the winner take all in the markets— Slow the process of disruptors in the

marketplace

— Anticipate Saturation— Shed assets before they become liabilities— Abandon value propositions where success is not

viable

— Escape your own black hole— Transform some value propositions to suppliers— Return to a new singularity

DisruptionStart

(The singularity)

The Disruption(The Big Bang)

Returning toEquilibrium

(The Big Crunch)

Entropy

There are several activities all of which will be new

to the organization and should be tracked to

determine if the measurement of information

influence on the processes that derive

organizational value are effective. These new

activities require a coordination of the processes

used to capture, create, extend and protect

organizational value, and the information used to

derive this organizational value and the data

transformed to serve as the consumed

information. There are four organizational roles,

some may exist in today’s organization, including

the Chief Data Officer (CDO), the Data Asset

Manager (DAM), the Data Governance Council

(DGC) and the Chief Information Officer (CIO).

Metrics should be created on the factors that limit

the use of information and the effective

coordination of the CDO, the DAM, the DGC and

the CIO.

Furthermore, the recording of value influenced by

information and the resultant revenue must be

recorded for the entire justification of the

investment made to ensure the optimal use of

information through the efforts of the CDO, DAM,

DGC and CIO. Metrics to measure the revenue

attributed to information usage as a percentage of

organizational revenue should be created. This

Each of these examples require swift use of information to either capitalize on market opportunities or

thwart risks exposed through the successful use of information.

process needs to be followed to measure the

effective participation of the CDO and to record

revenue attributable to the efforts of the CDO.

There are technology, people and process

contributors that influence the valuation of

information. All of them are vehicles that, when

successfully implemented, facilitate the use of

information just in time for the execution of

strategies and tactics of the organization and the

successful identification and capitalization of

opportunities and risks associated with the

strategies and tactics of the organization.

Under certain circumstances, there may be

situations where a disruption has occurred in the

marketplace which is not covered by any of the

business models of the organization. In such

cases, a process for business model innovation,

which is itself one of the information value levers,

is engaged to modify the strategies and tactics of

the organization to fit the new market realities. In

such cases, information may have to be

formulated on the fly to fit the new strategies and

tactics. While such ‘just in time’ transformation

capabilities are rare, these are especially valuable

to the organization when such opportunities and

risks present themselves.

Improving the Information Value Levers

Figure 4 | Data Map a Business Model Canvas

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Business Model Canvas (BMC) Data Map

Protected Value(Risk Remediation)

Captured Value (New Relationships)

Extended Value(Extend

Relationships)

Created Value(Successfully

Innovate)BMC

Value Proposition

How Value is Identified

What activities are triggered toachieve the value proposition

Information that triggers the executed events

The derivation of this information

The source data consumed

The Participants in Influencing Enterprise Value through the use of Information

There are several participants who have a stake

in influencing the value of information, and

thereby, play a role in the revenue attained by the

Chief Data Officer. These participants are the

CDO, DAM, DGC and CIO. The reporting

relationships for each of the four roles will vary

based on the industry and organization.

The CDO, DAM, DGC and CIO, all play a pivotal

role in effectively influencing the value of

information as an intangible asset consumed in

the strategies and tactics of the organization.

The Business Model Canvas (discussed in this

paper) and the BMC Data Map (also discussed in

this paper) are the vehicles to map the

consumption of value to the value propositions

of the organization as a means to determine

the maximum value achievable through the use

of information.

It is important to note that while the availability

of data is critical to the use of information in the

strategies and tactics of the organization (as

mapped out in the BMC Data Map), data of and

by itself achieves no value for the organization.

Just like the intangible patent assets of an

organization have potential value which is

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achieved by the royalties attained or the use of

the patent to deliver goods and services to a

customer, the intangible data assets of the

organization are consumed in the strategies and

tactics of the organization and achieve value as

mapped in the BMC Data Map.

It is the responsibility of the Chief Data Officer to

identify and record the achieved intangible

information asset valuations accomplished and

the cost of transforming the raw data materials

into finished goods inventory.

It is the responsibility of the data governance

council to identify, prioritize and remediate

impediments that lessen the achievable value

for consumed information, such as its

trustworthiness, full attribution and other data

levers associated with the use of the

information.

It is the responsibility of the CIO to ensure the

execution of the priorities identified by the data

governance council to optimize the achievable

value for information.

And finally it is the responsibility of the data

asset manager to manage the raw data and

finished goods information assets of the

organization.

Figure 5 | Typical Information Value Levers impacting the value of information

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Information and Data Value Influencers

Technology Contributors People Contributors Process Contributors

— Collaboration Aids— Measurement Aids— Reference Data— Attribution / Metadata— Active Taxonomy— Information / Context

integration— Workflow— Consolidation Aids— Big Data Management Aids— Governance Aids— Infrastructure Aids— Actionability Aids— Expired Data Removal Aids— Information Lifecycle Mgmt.— Information Transparency Aids— Operational Data Quality— MDM Isolation

— Sharable Environment— Information Attribution— Non-Expiration Assurance— JIT Accessible Assurance— Trustworthy Assurance— Actionability Aids Effectiveness— Non-Reliance on Local Data— Willingness to Share— Sponsorship— Readiness — Orchestration— Effective CDO optimization of

information used to derive organizational value

— Effective Data Asset Mgmt

— Effectiveness of identification & prioritization of material changes to critical data elements

— Accurate mapping of information to business model canvas

— Active process to ensure alignment of information taxonomy and current organization informational needs

— Process/Organization Fit— Identification Effectiveness— Ownership Assignment Effectiveness— Strategy Derivation Effectiveness— Collaborative Executing Effectiveness— Feedback Measurement Effectiveness— Executed Actions fine tuning

Effectiveness

It is the interplay of the CDO, CIO, DGC and DAM that the net incremental revenue achievable from

information for the organization is attainable.

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Chief DataOfficer

Data AssetManager

DataGovernance

Council

ChiefInformation

Officer

Influence the optimal mix of information consumed in creating, extending, capturing and protecting organizational value.

Manage the inventory of the raw materials (data) and finished goods inventory (information) available to the decisioning processes

Influence the attributes of data that improve its identification, usefulness, trustworthiness and actionability

Own the processes that create and acquire data for the organization and execute activities identified by the others that systematically improve the value of data

Management of Data and the synthesis of information

Influence the uses of information andensure the availability by mapping to data

In summary, two things that every CDO should consider as critical paths in the years ahead are to

understand and advocate that:

Information should be treated as an intangible asset of the organization.

The CDO is in a position to be the catalyst for enhancing the value of information.

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Figure 6 | The Roles participating in influencing information value

About the Author

Mark.Albala@cognizant.com

Mark Albala is the thought leader of Cognizant Enterprise Information Management business unit. In this role, Mark provides insight into the adoption of leading disciplines that optimize the use of information. Prior to this role, Mark has served as the lead for architects, data modelers, practitioners of database technologies, data quality and governance and consulting and solution architecture. A graduate of Syracuse University, Mark has held senior thought leadership, advanced technical and trusted advisory roles for organizations focused on the disciplines of information management for over twenty years. He can be reached at

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