Deloitte: How Chief Data Officers are Navigating AI

In today's digital economy, data has become a critical asset for businesses across all sectors.

Amidst this current climate for technology, the role of Chief Data Officer’s (CDO’s) has emerged as a key strategic position tasked with unlocking the value of data to drive organisational success.

As businesses increasingly rely on data-driven decision-making, the CDO's responsibilities have expanded beyond traditional data management to encompass a wide range of functions, including AI implementation, regulatory compliance and strategic business alignment.

The global context for CDOs is additionally rapidly evolving, with advancements in AI and machine learning technologies creating new opportunities and challenges.

Simultaneously, regulatory frameworks such as the General Data Protection Regulation (GDPR) in EU and the California Consumer Privacy Act (CCPA) in the US have heightened the importance of data governance and privacy considerations.

This evolving scene has placed CDOs at the forefront of digital transformation initiatives, requiring them to balance technological innovation with regulatory compliance and ethical considerations.

The role demands a unique blend of technical expertise, business acumen and strategic vision to navigate the complexities of the modern data ecosystem.

Deloitte’s 2024 Chief Data Officer survey provides a comprehensive snapshot of the changing priorities and challenges faced by CDOs in this dynamic environment.

Shifting priorities amidst the AI boom

According to the survey, CDOs are increasingly focusing on AI and Gen AI as top priorities for the coming year, with 49% of respondents considering these technologies as core priorities for the next 12 months.

This shift towards AI and GenAI reflects the transformative potential of these technologies in extracting value from data and driving innovation across industries.

From predictive analytics to natural language processing, AI technologies are enabling organisations to gain deeper insights from their data, automate complex processes and create new products and services.

How CDOs balance AI innovation with traditional data responsibilities

However, Deloitte also reveals that CDOs are not neglecting their traditional responsibilities.

A significant proportion of respondents (42%) continue to prioritise building the business case for data investment, highlighting the ongoing challenge of securing resources and buy-in for data initiatives.

Additionally, 35% of CDOs are focusing on data governance and insights and analytics, underscoring the importance of maintaining data quality and compliance in an increasingly complex regulatory landscape.

The evolving nature of the CDO role is further reflected in the changing skill requirements for data teams.

CDOs in more mature organisations are seeking advanced skills such as machine learning (25%), communication (25%) and data architecture (24%).

This trend indicates a shift towards more sophisticated data capabilities and the need for data professionals who can effectively communicate insights to non-technical stakeholders.

In contrast, CDOs in less mature organisations are focusing on foundational skills like data management (23%), change management (23%) and data engineering (23%).

This difference in priorities highlights the varying stages of data maturity across organisations and the need for CDOs to tailor their strategies accordingly.

Andy Whitton, Data, Privacy and Analytics Partner at Deloitte says: "Chief data officers are more than just data guardians – they're strategic advisors. Their ability to communicate the value of data and AI to the C-suite is crucial for driving real change across an organisation.

“To truly become prominent, chief data officers need to demonstrate tangible business outcomes, build strong relationships with key stakeholders, and proactively educate the C-suite on the transformative power of data-driven strategies."

Organisational alignment and impact

Deloitte also reveals interesting insights into the organisational positioning of CDOs.

While 72% of CDOs report to C-suite executives, there is a strong desire among CDOs for an even more strategic reporting structure.

More than half of the surveyed CDOs express a preference to report directly to the CEO, although currently only 3% do so.

This desire for closer alignment with top leadership underscores the strategic importance of the CDO role and the need for data-driven decision-making at the highest levels of organisations.

It also reflects the growing recognition that data is not just a technical asset but a strategic one that can drive business value and competitive advantage.

In terms of impact, the survey paints a positive picture of CDO effectiveness.

The majority of CDOs (66%) report success in enabling their organisations to better leverage data for enhancing business process efficiency and ensuring regulatory and legal compliance.

Additionally, 63% of CDOs have improved strategic decision-making within their organisations.

These findings demonstrate the tangible value that CDOs are bringing to their organisations, from operational improvements to strategic insights.

However, they also highlight the ongoing challenge of quantifying and communicating the value of data initiatives to stakeholders across the organisation.

Challenges and opportunities

Despite these successes, CDOs face significant challenges in realising their ambitions.

Navigating complex regulatory environments remains a key concern, with data privacy laws and industry-specific regulations creating a complex compliance landscape.

Securing investment for data initiatives also continues to be a challenge, particularly in organisations where the value of data is not fully recognised.

The increased focus on AI and GenAI presents both opportunities and challenges for CDOs.

While these technologies offer the potential for transformative insights and efficiencies, they also raise new ethical and governance considerations.

CDOs must grapple with issues such as algorithmic bias, data privacy and the responsible use of AI technologies.

This sentiment encapsulates the dual nature of the modern CDO role – balancing innovation with responsibility, and technical expertise with ethical leadership.

As organisations continue to grapple with the complexities of data management and the opportunities presented by AI, the strategic importance of the CDO role is likely to grow further.

Tony King, Data, Privacy and Analytics Partner at Deloitte concludes: "AI is the next frontier for businesses and chief data officers are the key to unlocking its potential. Investing in teams and giving them the resources to improve data quality is critical for successful AI adoption. But it's not just about the tech

“As chief data officers navigate a complex landscape, they need to prioritise cultural barriers, address skills gaps, and keep pace with evolving AI regulations.”

Make sure you check out the latest edition of Technology Magazine and also sign up to our global conference series - Tech & AI LIVE 2024

Technology Magazine is a BizClik brand