Digital transformation is creating extraordinary new growth opportunities but without building trust around data at all levels, companies won’t win, says Marco Vernocchi, Ernst & Young’s global chief data officer.
Vernocchi spoke with StrategicCIO360 about trust gaps, how to fill them and why CIOs and CDOs should “sit at the management table.”
From your view, what are the biggest growth opportunities for companies leveraging data strategies?
I see huge growth opportunities coming from three directions. First, hyper growth trends in natively data-driven domains such as ESG, the metaverse, quantum computing and the ongoing Internet of Things.
Second, exploiting existing data potential. Seriously focusing on data as a new factor of production similar to labor, capital, materials and technology businesses can create new forms of value: faster innovation, new products and services, operational efficiency and more trust are just the next stops. Data reuse and sharing within and outside the enterprise will become a new competitive behavior.
Third, technically mastering event-driven data and metadata to discover and exploit new value patterns. Most companies focus on insights, but insights don’t scale; time-stamped, event-driven data does, and it unlocks completely new perspectives.
Why is building trust important for accelerating digital transformation?
It’s interesting to observe how an emotional sentiment like the concept of trust drives—or limits—the possibilities created by technology. But you wouldn’t execute an online financial transaction or book a room on the other side of the planet if you didn’t trust the digital operator.
Trust is fundamental in a digital world. Given the ongoing and exponential growth of data, intelligence that can be trusted by customers, employees, business partners and regulators is a new condition for success.
Trust creates confidence and accelerates the adoption of new digital experiences; scale creates business relevance and ultimately success. If you try adding trust on top of your business and operating models you end up with compliance, but if you build trust into them you create sustainable value.
No surprise then, that at EY we define our own data strategy as “trusted intelligence” and we’ve built it around three pillars: more data, more trust, more intelligence.
Where do you typically find trust gaps and how can organizations work to eliminate them?
Trust gaps can be anywhere. First, organizations need to establish trust inside their own business. To anticipate and detect trust gaps in a digital context, it might be useful to have a defining model. At EY, we call it the intelligent value chain. It starts from the business value and the experience you want to create. Those are supported by the intelligence, the data and the technology required to operate.
Embedding trust into all these five building blocks of the intelligent value chain will qualify your trust strategy. But beware, only a proper balance of trust across all of them will determine your success. Having a very secure technical infrastructure but non-reliable data will still leave you in a trust deficit. Having trusted data and algorithms but offering a non-credible experience could be even worse. We refer to this as our “value-first, trust everywhere” approach.
Once you’ve built trusted, data-powered intelligence internally, you’re in a position to build trust with customers, supply chain, the market and your ecosystem.
How can companies embed trust into their culture and technology and what role can CIOs and CDOs play in this process?
Data is a multidimensional driver of business transformation and CIOs and CDOs are perfectly positioned to be key change agents.
Building a trust- and data-driven culture requires an honest understanding of people’s career trajectories. Typically, senior executives and board managers created their success through marketing, finance, operations or legal backgrounds. Having a CIO and/or a CDO in the boardroom can add an important perspective to discussions that might otherwise be missed.
It’s also important to recognize that younger generations have a completely different approach to technology and sensitivity to elements such as privacy and confidentiality. They need tools and ways of working that fit their expectations, while ensuring they can operate within policies and procedures.
Technology can be a great vehicle to build trust into the company’s infrastructure as well as an effective way to sustain the culture’s ongoing evolution.
When it comes to data democratization, at EY we deployed a new web application called Data Explorer globally to give our people access to a large amount of curated external data sources for permissible use.
Entirely new data technologies, such as Data Fabrics, are opening new possibilities in data management and value creation, while at the same time addressing important aspects of trust, for example data sovereignty, privacy and protection. This requires a company to master concepts such as business ontologies, semantic layers, metadata management, distributed data processing, attribute-based access controls, etc.
While these words might look like strange tech jargon, they cannot be ignored as the world of data is tightly integrated with business. And that means significant implications on investments, levels of trust as well as creation of new business opportunities.
That’s why CIOs and CDOs should sit at the top management table. I see this happening more and more and I believe it will become a new normal soon.