The Case for the Chief Data O!cer Recasting the C-Suite to Leverage Your Most ValuableData Asset Peter Aiken and Michael Gorman The Case for the Chief Data Officer Recasting the C-Suite to Leverage your most Valuable Asset 10124 W. Broad Street, Suite C Presented by Peter Aiken, Ph.D. Glen Allen, Virginia 23060 804.521.4056 Peter Aiken, PhD • 25+ years of experience in data management • Multiple international awards & recognition • Founder, Data Blueprint (datablueprint.com) • Associate Professor of IS, VCU (vcu.edu) • President, DAMA International (dama.org) • 8 books and dozens of articles • Experienced w/ 500+ data The Case for the management practices in 20 countries Chief Data O!cer Recasting the C-Suite to Leverage • Multi-year immersions with Your Most Valuable Asset organizations as diverse as the US DoD, Nokia, Deutsche Bank, Wells Fargo, and the Commonwealth Peter Aiken and of Virginia Michael Gorman 2 Copyright 2013 by Data Blueprint 2 CIOs • Have accomplished astounding technological feats • Have developed excellent organizational skill sets • Have delivered phenomenal business value 3 Copyright 2013 by Data Blueprint 4 Copyright 2013 by Data Blueprint Wordle.net 5 Copyright 2013 by Data Blueprint The Case for the Chief Data Officer Recasting the C-Suite to Leverage your most Valuable Asset • A bit of history - Clinger Cohen Act - how's it going? • Motivations: - Poor data management performance to date ➡ (requires additional or different effort) - Recognition that data is not a project ➡ (requires a different approach) - Lack of domain expertise ➡ (requires different career preparation) • The role of a CDO - three necessary but insufficient prerequisites: 1. Dedicated solely to data asset leveraging 2. Unconstrained by an IT project mindset 3. Reporting directly to the business 6 Copyright 2013 by Data Blueprint Motivation • Organizations: – $600 billion annually due to poor DM practices – Remain unaware of the root causes of their losses • IT Professionals/Data Managers must: – Gain executive-level approval for basic DM investments – Must monetize these lost opportunities and related costs • To avoid an unfortunate loop: – Management focused on fixing symptoms – Cannot address the underlying problems • Business performance will be positively influenced • IT projects will better support business missions • Top management is more likely to support DM • Practitioners can prioritize relative IS investments and adjust portfolios according to business needs • The bigger the organization, the more important data assets are to the organization • This is due to the increased leverage obtainable by larger organizations 7 Copyright 2013 by Data Blueprint IT Project Failure Rates • Recent IT project failure rates statistics can be summarized as follows: – Carr 1994 • 16% of IT Projects completed on time, within budget, with full functionality – OASIG Study (1995) • 7 out of 10 IT projects "fail" in some respect – The Chaos Report (1995) • 75% blew their schedules by 30% or more • 31% of projects will be canceled before they ever get completed • 53% of projects will cost over 189% of their original estimates • 16% for projects are completed on-time and on-budget 1 in 3 IT projects suffers on – KPMG Canada Survey (1997) • Price • 61% of IT projects were deemed to have failed – Conference Board Survey (2001) • Schedule • Only 1 in 3 large IT project customers were very “satisfied" • Functionality – Robbins-Gioia Survey (2001) • 51% of respondents viewed their large IT implementation project as unsuccessful – MacDonalds Innovate (2002) • Automate fast food network from fry temperature to # of burgers sold-$180M USD write-off – Ford Everest (2004) • Replacing internal purchasing systems-$200 million over budget – FBI (2005) • Blew $170M USD on suspected terrorist database-"start over from scratch" http://www.it-cortex.com/stat_failure_rate.htm (accessed 9/14/02) New York Times 1/22/05 pA31 8 Copyright 2013 by Data Blueprint IT Project Failure Rates (moving average) 60% 53% 53% 51% 49% 45% 46% 44% 40% 34% 33% 32% 30% 31% 29% 28% 28% 27% 26% 24% 23% 18% 15% 16% 15% Failed Challenged Succeeded 0% 1994 1993 1998 2000 2002 2004 2009 9 Copyright 2013 by Data Blueprint Source: Standish Chaos Reports as reported at: http://www.galorath.com/wp/software-project-failure-costs-billions-better-estimation-planning-can-help.php "Most significant IT reform of the last decade" 1996 (passed) • Establish Agency CIOs – Link IT investments to accomplishments • Requires – CIO "Milestone Decision" assessment – Establish process to select, manage and control IT investments (CMM Level 2) • Responsible – "developing, maintaining, and facilitating the implementation of a sound and integrated information technology architecture" 10 Copyright 2013 by Data Blueprint The Clinger-Cohen Act: 10 Years Later 2006 (assessed) • Some guidance exists • Mixed results • Some experiences gained – Federal Enterprise • Some progress has been made Architecture – "The landscape of federal information technology is not a clearly defined plain of reference points that can be empirically studied in pure isolation" – Planned 5% decrease in IT costs – 9% increase instead http://www.govexec.com/federal-news/2006/07/the-clinger-cohen-act-10-years-later/22227/ 11 Copyright 2013 by Data Blueprint £12bn NHS computer system is scrapped • The biggest civilian IT project of its kind in the world, it has already squandered at least £12.7billion. Some estimates put the cost far higher. • Analysts say the sum would have paid the salaries of more than 60,000 nurses for a decade. • Following an official review, the ‘one size fits all’ IT project will be replaced by much cheaper regional initiatives, with hospitals and GPs choosing the IT system they need. • Read more: http://www.dailymail.co.uk/news/article-2040259/NHS-IT-project-failure-Labours-12bn- scheme-scrapped.html#ixzz2R1yb9F1i 12 Copyright 2013 by Data Blueprint Billion-Dollar Flop: Air Force Stumbles on Software Plan • In policy circles, problems that are mind-bogglingly difficult or impossible to solve, like global warming, are formally termed “wicked.” • For the United States Air Force, installing a new software system has certainly proved to be a wicked problem. Last month, it canceled a six-year-old modernization effort that had eaten up more than $1 billion. When the Air Force realized that it would cost another $1 billion just to achieve one-quarter of the capabilities originally planned — and that even then the system would not be fully ready before 2020 — it decided to decamp. 13 Copyright 2013 by Data Blueprint The Case for the Chief Data Officer Recasting the C-Suite to Leverage your most Valuable Asset • A bit of history - Clinger Cohen Act - how's it going? • Motivations: - Poor data management performance to date ➡ (requires additional or different effort) - Recognition that data is not a project ➡ (requires a different approach) - Lack of domain expertise ➡ (requires different career preparation) • The role of a CDO - three necessary but insufficient prerequisites: 1. Dedicated solely to data asset leveraging 2. Unconstrained by an IT project mindset 3. Reporting directly to the business 14 Copyright 2013 by Data Blueprint A Digital Universe ... • Consists of two species of bits: – Differences in space – Differences in time – Logic can be done using zeros and ones [Leibniz 1679] • Structure bits – Vary in space but are invariant across time – These are memory (data) • Sequence bits – Vary across time but are invariant across space – These are code • While both are equally important to technology, more research and attention has been focused on the code than on the data [articulation from Dyson 2012] 15 Copyright 2013 by Data Blueprint Observation • Fred Brooks Jr.'s argument that data representation is the essence of programming. – "Show me your flowchart and conceal your tables, and I shall continue to be mystified. Show me your tables, and I won't usually need your flowchart; it'll be obvious." 16 Copyright 2013 by Data Blueprint Two Views of the Same Individual Business are being bombarded offers for these services 17 Copyright 2013 by Data Blueprint Organizations Surveyed • Results from International Organizations 10% more than 500 Local Government 4% organizations State Government Agencies • 32% government 17% • Appropriate public company representation • Enough data to Federal Government demonstrate 11% European organization DM practices are Public Companies generally more 58% mature 18 Copyright 2013 by Data Blueprint Not Enough Data Management Involvement Data Warehousing XML Data Quality Customer Relationship Management Master Data Management Customer Data Integration Enterprise Resource Planning Enterprise Application Integration Initiative Leader Initiative Involvement Not Involved 19 Copyright 2013 by Data Blueprint % of DM organizations labeled "successful" 0.45 1981 2007 0.36 0.27 0.18 0.09 Successful 0 Partial Success Don't know/too soon to tell • In 25 years: Unsuccessful – "Successful" DM organizations fell from 43% to 15% Does not exist – "Unsuccessful" increased from 5% to 21%. 20 Copyright 2013 by Data Blueprint CIOs are distancing themselves from DM 1981 2007 Percentage Reporting Directly 74% 43% to the CIO Percentage reporting 3 or 26% 57% more levels below the CIO Copyright 2013 by Data Blueprint 21 Why Data Projects Fail by Joseph R. Hudicka $0 $125,000 $250,000 $375,000 • Assessed 1200 migration projects! Median Project Expense – Surveyed only experienced migration specialists who have