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The transformation of data & analytics leaders

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Data and analytics leaders will need to put a high priority on responsible data practises to make sure that data is used in ways that are consistent with moral principles and societal norms

The status of a data and analytics leader is changing significantly in the 21st century’s data-driven world. These leaders now play crucial roles in organisations across industries due to the abundance of data and the growing significance of making decisions based on it. The continuing changing roles, competencies, and difficulties are faced by these individuals as the data and analytics leadership landscape changes.

Experts suggest we must recognise the fundamental change in the corporate environment in order to comprehend the evolution of data and analytics leadership. Data is now a strategic asset that may give an advantage in the marketplace, not only a consequence of business operations.

Companies now understand how valuable data is for obtaining insights, streamlining workflows, and providing better customer experiences. As a result, the position of a data and analytics leader has become more important.

Chief Data Officers (CDOs) and Chief Analytics Officers (CAOs), both terms used to refer to executives in data and analytics. They are no longer just responsible for running data warehouses and producing reports, their duties have greatly increased.

In the future, they will be required to lead data strategy, cultivate a data-driven culture, innovate with sophisticated analytics, ensure data privacy and security, work cross-functionally, and assess the results of data efforts. These varied tasks call for a broad skill set and an in-depth knowledge of both technology and business.

The required skill set

The skill sets necessary to succeed in this position have developed along with the duties of data and analytics leaders. And these skill sets are constantly evolving, as technology and business requirements change further. With a solid foundation in data engineering, data science, and analytics, technical skill is still crucial. However now, a wider range of skills is required.

Forging a connection between technological proficiency and company strategy requires business acumen. To effectively communicate the benefits of data efforts and get support from a variety of stakeholders, one needs effective leadership and communication abilities. Data leaders frequently encounter resistance while attempting to develop a data-driven culture; therefore change management skills are essential. In today’s context of increased data privacy concerns, a thorough awareness of data ethics and pertinent laws is essential.

On the other hand, data and analytics leaders encounter a number of difficulties despite the growing understanding of their significance. Talent scarcity is one of the biggest problems. It can be difficult to recruit and retain top personnel in this industry because the demand for data specialists frequently outpaces the supply.

Another ongoing issue is the quality of the data. Maintaining data accuracy and quality is a constant battle since poor data quality can result in false conclusions and bad judgements. Furthermore, it’s important to continuously learn and adapt to stay up with the quick-moving technological breakthroughs, particularly in AI and machine learning.

Concerns about data privacy are fuelled by increasingly strict legislation like Europe’s GDPR (General Data Protection Regulation) and the United States’ CCPA (California Consumer Privacy Act), which necessitate careful compliance activities that can be time and resource-consuming.

Resistance to change within organisations is also a common hurdle, as changing an organisation’s culture to become data-driven can be met with resistance from those who are comfortable with traditional decision-making processes.

Struggle to produce strategic results

According to statistics given by Gartner at the Gartner Statistics & Analytics Summit 2023, chief data and analytics officers (CDAOs) are positioned to be of increasing strategic importance to their organisations, yet many are having difficulty moving forward. Less than half (44%) of data and analytics leaders claim that their teams successfully add value to the company. This information comes from a poll of 566 data and analytics leaders conducted online by Gartner between September and November 2022.

“It was kind of an eye-opener that one-third of them felt they were not as effective as they could be. There’s so much going on, so many things they are compelled to do versus what they really want to do, know they need to do, know they need to prioritise. They’re spending a lot of time on things like data quality, data management, things that might be tactical, helping with operational aspects of IT. But that’s not helping move the value of the organisation as a business forward,” Donna Medeiros, senior director analyst at Gartner said.

Data and analytics executives have a wide range of duties, including 60% of respondents mentioned developing and implementing a data and analytics plan, followed by managing data-driven culture change (54%), data and analytics governance (55%), and 59% indicated they were responsible for overseeing a data and analytics strategy. Businesses continue to invest in data and analytics operations. According to survey respondents, organisations are investing more money in advanced analytics (60%), data governance (63%), and data management (65%). The average reported budget was $5.41 million, and 44% of respondents claimed their data and analytics teams had grown in size over the previous year.

Obstacles to data success

Despite the increasing investment, CDAOs report that a lack of cash and resources is one of their biggest obstacles to achieving results, with 29% ranking it as one of their top three challenges. Lack of employees and skills is the main barrier. The majority of responders to the survey—1 in 6 (17%)—identified talent as one of their top three problems. Additionally, Medeiros argues, that the limited talent pool isn’t helping. ‘CDAOs need a talent strategy that doesn’t rely on hiring data and analytics talent off the shelf.’

According to Medeiros, CDAOs must develop a strong personnel management plan that incorporates mentoring, education, and training for a data-driven culture. This approach must be implemented not only by the organisation’s core data and analytics team but also by the larger business and technological groups.

Gartner lists the following as additional challenges to the success of data and analytics: Culture-related barriers to change acceptance (8%, highest barrier; 26%, among top three), lack of support and involvement from corporate stakeholders (10%, the biggest barrier; 26%, the top three), lack of authority to carry out CDAO duties (9%, top choice; 24% top three), data literacy is lacking (best choice: 5%; top three: 23%).

“Their life is very complex. They have lots of areas of primary responsibility — implementing data and analytics strategy, oversight of data and analytics initiatives, creating and implementing information systems and data management — and the people side — workforce development, upskilling, making the organisation data-driven, artificial intelligence, and centres of excellence. They’ve got a lot of complexity and a lot of people they’re answering to,” Medeiros said.

Necessary skills for leading data strategy

When company leaders acknowledge the value of data and analytics but fail to make the strategic adjustments and investments required for success, it may be an indication of an organisational problem at the C-level.

A 2022 survey by Alation and Wakefield Research found that 71% of data leaders were ‘less than very confident’ that their organisation’s leadership saw a connection between investing in data and analytics and remaining ahead of the competition.

The complexity of the role and how it interacts with other business executives needs to be addressed for success, even in the scenario where an organisation appoints a dedicated IT leader to steer data strategy, whether in a chief data officer or chief analytics officer post.

A composer, performer, and orchestra conductor are the three persons to whom Medeiros compares the CDAO job. The conductor examines the entire organisation and oversees how data and analytics are carried out both in a centralised function and across business lines with the aid of subject matter specialists. The composer develops and markets the narrative illustrating the importance of data and analytics. Sometimes, data leaders must be performers: helping to implement data management, data quality, data trust, spending time on data governance, compliance, and risk.

“These three personas require juggling soft, people skills and technical savvy. The CDAO serves multiple stakeholders across the organisation and cannot operate in isolation. They need to align with organisational strategic priorities, collaborate and sell the overall vision and strategy for data and analytics, and get buy-in for their initiatives,” Medeiros stated further.

According to the Gartner poll, the most effective data executives outperformed their colleagues by projecting an executive presence and creating an agile and strategic data and analytics unit that could shape data-driven business performance and operational excellence. Respondents were surveyed by Gartner and asked to rate themselves on 17 executive leadership attributes.

There was a significant association between leaders who reported excellent organisational and team performance and those who indicated they were effective or extremely effective across those attributes. For instance, compared to only 19% of low performers, 43% of top-performing data and analytics executives claimed they were effective in allocating time to their own professional growth.

Meanwhile, the poll also suggested that agile data and analytics capabilities are essential to build sense-and-respond capabilities and are leading organisations to unprecedented cycles of rapid innovation to meet new requirements.

Future of data and analytics leadership

Technologies like edge analytics and quantum computing are projected to become increasingly important in the processing and analysis of data. These developments will create new opportunities for more effectively managing enormous amounts of data and gaining deeper insights. They will, however, also bring forth further difficulties in terms of infrastructure and data security.

Furthermore, in the future, ethical issues related to the use of AI and data will be much more crucial. Leaders in data and analytics will need to put a high priority on responsible data practises to make sure that data is used in ways that are consistent with moral principles and societal norms. This entails dealing with biases in AI algorithms, making sure data-driven decision-making is transparent, and protecting individual privacy.

At last, a data and analytics leader’s position has changed from that of a technical manager to that of a strategic engine for organisational success. These pioneers are influencing how firms run and make decisions at the forefront of the data revolution. The job of data and analytics executives will only become more crucial in the changing company and industry landscape as technology progresses and the value of data rises.

Organisations must make investments in developing these individuals’ skills and capacities if they want to succeed in the data-driven future. Data and analytics leaders will need to be flexible, creative, and morally aware as they navigate the rapidly changing field of data and analytics leadership in order to meet the challenges and possibilities that lie ahead.

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