The role of a Chief Data Officer (CDO) is becoming the next hot job as companies seek to find new ways to analyze data and leverage it to their advantage and finding new revenue sources, while managing privacy and security.
Noetic Partners Managing Director Diane Schmidt spoke with WashingtonExec about the changing role of the CDO, the continually-evolving business landscape and the roadblocks she faces when implementing a big data analytics program.
WashingtonExec: How is the role of CDO coming into play more now with the increasing prevalence of data breaches?
Diane Schmidt: The role of the CDO has really grown and evolved over the last eight or nine years for a number of reasons. I think management in large financial organizations finally began to understand the need for data and information accountability – there’s a new appreciation for what technology organizations can and cannot do. The credit crisis and subsequent legislation, growing realization of the value of data-driven predictive analytics and decision-support business requirements, and the new concerns about the security of personally protected information (PPI) have really changed the data and information landscape.
The role of the CDO is to ensure data and information are properly architected, managed and secured, which means support for authoritative sources, straight-through-processing, and access and controls. This is the role that will drive robust policies, standards and procedures and ensure they are institutionalized. The security of the data is dependent on people, processes and technologies. Strict enforcement of processes, leveraging well-trained staff who understand the data and effective technology implementation are key. When one of these things breaks, the CDO should be positioned to lead the assessment, containment of the breech, communication, requirements and full remediation.
The data analytics program really must be fully-supported by the executives. Without clear business drivers and expectations, and full support from the Chief Information or Technology Officer, the program can easily fail before it even begins. It must be based on a sound data architectural foundation, but often, users want solutions immediately.
WashingtonExec: What is your role in this?
Diane Schmidt: My role is to provide my clients with sound and principled guidance about how to set up an effective data program so that they do not suffer the fate of so many other firms. We provide consulting to Chief Executive Officers and their executive teams in financial services and regulatory organizations who want (or need) to set-up and manage an Active Data GovernanceTM program.
We specialize in building the foundation of the “best-in-class” data program, so that when we leave, our clients can continue to build and grow along with the business, and without impediments. Our focus areas are reference and master data, straight through processing, integrated processing and analytic repositories, including really big and really fast data, and vigorously-managed security frameworks and access controls. Our goal is to provide our customers and partners with trusted data that will support the business strategies and mission of each organization.
WashingtonExec: What would you say has changed most substantially in the business landscape since when you first began your career?
Diane Schmidt: When I started in this field, life was much simpler. Database technologies were new and powerful, and we were able to help lead the technological transformations at our various institutions. Before SOX, before 9/11 and before the 2008 credit crisis, the understanding and implementation of enterprise data quality programs was somewhat important, but only a few truly enlightened firms and executives saw the long term value. In 2008 and 2009, a lot of market participants disappeared, but those firms who survived had typically invested in enterprise data programs, and virtually all doubled down. Data had always been considered a critical part of a company, but IT was typically accountable for the management of data.
After the crisis in 2008 and 2009, financial market participants have really begun to focus on data management and data quality. Many large businesses have made managing and improving their data quality a key component of corporate objectives, and often, a key performance indicator for the corporation.
WashingtonExec: What are your day-to-day responsibilities as CDO? What drew you to the role? What do you find most challenging about your role?
Diane Schmidt: When I led the Enterprise Data Program at Freddie Mac, we began every day with a review of activities from the prior day – how many loans were purchased, payments received, pools created and so on – and what should we expect for the next few days. My primary objective was to ensure the data strategy and tactics were aligned with the corporate mission, business objectives and yearly priorities. The daily responsibilities included managing a data governance program with the objective of improving data quality to meet business objectives. Every day was different; however, spending equal amounts of time among the business units, operations and technology was key. Developing a partnership amongst colleagues is critical for any successful CDO as buy-in into the strategy is instrumental.
Today, we help our clients design and establish the role, plan it and manage the change. Our clients are senior executives who usually want to see dramatic change in the data environment over a short period of time. Frankly, working with senior executives to understand that change takes time is challenging, especially when there are stakeholders and consumers to answer to. Managing client expectations is one of the most challenging things to do in the CDO role. The CDO role is one of the toughest roles out there! Standing in front of a room of people and telling them “No, we are going to do it the right way” was, and remains, a challenging message to convey.
WashingtonExec: What are the largest roadblocks that you face when rolling out big data analytics programs?
Diane Schmidt: The biggest roadblocks are always, first, a lack of real sponsorship; second, poorly defined or poorly understood business and functional requirements; third, choosing the right tools for the users; and fourth, ensuring the resources understand and have access to the data in order to produce effective analytics. The data analytics program really must be fully-supported by the executives. Without clear business drivers and expectations, and full support from the Chief Information or Technology Officer, the program can easily fail before it even begins. It must be based on a sound data architectural foundation, but often, users want solutions immediately.
We like to say that building the top floor of structure before a solid foundation is in place is ineffective, costly and likely to fail. There are many fantastic analytics tools on the market, but the tools can only do so much. The skills to not only effectively use the tools on top of a sound architecture, resources must be able to interpret results and provide business summaries to consumers, managers and executives.
WashingtonExec: Where are you expecting to see growth in the federal contracting industry as the overall federal budget is declines?
Diane Schmidt: In financial services, we anticipate continuing growth as regulators, like the SEC, CFTC, FDIC and others, and domestic and foreign market participants, build compliance frameworks for the continuing implementation of the Dodd-Frank legislation. We also see CFPB expanding its mission dramatically over the next decade.
Security is, finally, of paramount importance to both business and regulatory organizations, and I expect to see significant growth in security architectures. We believe that many federal agencies and financial services organizations will soon begin to understand the security value of integrated client, account and product management systems. Some of our clients have used hundreds of databases to manage fragmented client data, usually due to the fragility of managing change for legacy systems, and we have been able to help them move to integrated systems so there are fewer security holes to plug.
WashingtonExec: What keeps you up at night?
Diane Schmidt: Security and testing.
We have a number of cloud-based systems and have seen massive denial of service and other attacks on our systems, almost all from IP addresses in Beijing, China. Even though we don’t have any PII or critical data – ours are just development systems – we know these massive assaults are patterns that every business connected to the internet must deal with. Every business should have a Data Security Strategy, and the CDO and CTO should manage it their respective elements collaboratively.
For testing, it’s so critical to have users and developers work together. When we implement a new Noetic database, we test and test and test and test, and we still find issues during implementation if certain user preferences weren’t clarified or if systems configuration requirements weren’t anticipated. Such is the nature of a technology-enabled business.
Diane Schmidt is a information management and financial services executive with experience in operations, technology, analytics, and strategic information management roles.
As a Managing Director with Noetic Partners, Schmidt is responsible for providing guidance to form and deliver data management strategies, solution management and execution plans for global financial institutions with a focus on financial, operations, control and information technology processes. She is one of the co-creators of the Noetic Active Data Governance Program and the Noetic Master Model (NMM).
Schmidt earned a bachelor’s degree from the University of Mary Washington, a Master of Science in Information Management from Marymount University, Program Management graduate certificates from George Washington University and is a former Adjunct Member of the staff at Marymount University.
