John Bottega, senior strategy & data management executive talks to DerivSource about the critical role data plays in how companies sell their products and understanding how data is used is driving the need for chief data officers (CDO)
Q. How has the data management role evolved over the last few years? Do you think that companies are becoming increasingly aware of the value of data as an enterprise asset?
A. The role has evolved in two ways: to provide management teams in business with up-to-date information for critical decision making and to unify business activities to create data that is better integrated across different divisions in organisations. The role of the CDO has changed considerably over the past ten years. The finance industry has recognised the importance of managing data as a corporate asset, it gained traction in early 2002/ 2003 and crystallised when the financial crisis hit. The financial crisis demonstrated the importance of understanding a firm’s data, risk exposure, interconnectivity and dependency across internal and external components. Executives and decision makers were hindered in their response to the crisis because of inconsistency in data resulting from a lack from a lack of data standards and adherence to data management best practices.
As the practice of data management has evolved, so too has the role of the CDO. Many CDOs have moved from a business-line accountability to enterprise-wide accountability. And while CDOs continue to focus on regulatory issues (Dodd Frank and BCBS Reference Data Aggregation has ensured that data infrastructure meets the criteria of the regulators), CDOs are getting increasingly more involved in extracting value from data. Through the use of predictive analytics and “ethical hacking” of data, firms are understanding the behavior of their customers better. This has helped to improve customer service and build revenue. The role of CDO will ensure that data is used to make the right critical decisions and achieve success.
Q. What do you think are some of the biggest challenges facing CDOs today?
A. Data management is multifaceted, it is not only managing reference data it is about embracing your chief data scientist, coordinating with your security officer and technology team to make sure you have proper storage management. The first challenge of the CDO is to define their role and responsibilities and build relationships, making it clear what they are accountable for. Dealing with the challenge of data legacies to identify the critical sources of data which, though very difficult is crucial to the role. One of the key challenges is trying to manipulate that data across some of the key areas of the organisation, an ongoing challenge and evolving all the time. It is a coordination role, the CDO is not going to be the expert in analytics, in technology, finance or security but they need to know it and understand how it integrates, so diplomacy is the key.
Q. Why did you decide to move into an advisory work? Who will be your main client base and how do you plan to help them?
A. My primary focus is working with the Enterprise Data Management Council (EDMC) as a senior advisor to the council on their CDO program. This field is very active and there is a lot of demand for financial institutions to establish strong data disciplines. What attracted me to the advisory role is the opportunity to work with a firm at a very senior executive level, conduct assessments, devise strategy and establish data protocols, which I find very gratifying. Couple that with the work I am doing with the industry association, we have over 120 members whom we work with, banks and agencies and there are tremendous opportunities even going back to BCBS239. We are working with banks and regulators to help identify the deliverables and from an industry perspective to promote best practice and there is great satisfaction in doing that. I feel that with the experience that I have gained in this space over past 30 years, I can provide real-world experience to help clients address their data management challenges.
Q. What advice would you give to others, both young and experienced in this field and what type of individual is suited to a role in data management?
A. The position of chief data officer (CDO) is a logical progression for people in the data management field. Like the chief information officer (CIO) or chief marketing officer (CMO) understanding the business from the beginning is critical to advancing to a senior leadership role. For Data Management, the individual who wishes to pursue this career must understand the business and the business data structures of a company to provide greater insight into the running of a company. You have to understand the dissemination of information.
It is also important to make a commitment to the role. When I was at Lehman Brothers I started a program for individuals who would work for two years in my department, learning the data and at the same time learning the topic. People became fully versed in every attribute of a the data (stocks, bonds, derivatives, futures) and got the opportunity to work on the trading desk. From there, they had the opportunity to continue working with data, or move onto the business, work as a quant or trader, while taking the data knowledge with them.You have to roll up your sleeves and learn. Don’t shy away from the details – that’s what data management is all about.
Q. If you hadn’t chosen this career path is there anything else you would have considered doing?
A. I had a passion for sports but my batting average wasn’t good enough so baseball wasn’t going to work for me. I have always been interested in politics, in a good way to work for the community, to give something back, so that might have been an alternative path I would have taken. Here I am a data guy and that is where fate has brought me. I have watched the data management industry evolve and I have been a participant in it working with colleagues and hopefully we have helped to bring awareness to the industry of the importance of data and data management. There are over 100 people in major institutions today with the title of CDO so maybe we have done something good for industry.
