New Face on the Corporate Board – The CDO

People who read the last post on this blog “What is a Data Warehouse” would probably accept my view that for an organization to get better at anything worthwhile, “data” is everything. If you accept this notion, I propose the immediate creation of a new ‘C’ level organizational position – Chief Data Officer (CDO).

To me, the CDO is a more important position than the more glamorous CIO (Chief Information Officer). After all, the input to any strategic information is raw data and many organizations don’t have a comprehensive focus on data that is present within its boundaries. It is important to realize that ‘Good data is a source of competitive advantage and not just any data’.

Let us for a moment assume that there is an organization with the CDO structure in place. The next question is – How should the CDO go about doing the job, given the massive amount of data generated by organizations? – Answer: Divide & Conquer!

The 6 mutually exclusive, collectively exhaustive (MECE) types of organizational data are given below:

Type 1) Transaction Structure Data – Business processes are a series of never-ending transactions. All these transactions has a context and this is defined by this category of data. Examples are: Products, Customers, Departments etc.

Type 2) Transaction Activity Data – These are the transactions themselves. Ex: Purchase Order data, Sales Invoice data etc.

Type 3) Enterprise Structure Data – These data elements are unique to each organization and the inter-relationships between data elements are important. Ex: Chart of Accounts, Org Structure, Bill of materials, etc.

Type 4) Reference Data – Set of codes, typically name-value pairs that drives business rules. Ex: Region Codes, Customer Types etc.

Type 5) Metadata – Data that defines other data thus making the collection a self-defining entity

Type 6) Audit Data – With so much focus on regulatory compliance, this is the data that tracks all the operations within a data store

Type 1,3 & 4 together is defined as Master Data and its management is the subject of numerous BI articles and white papers.

Our CDO would do well to understand all these 6 types of data in the organization and have some specific strategies to improve their quality. This & many other data management strategies will be the focus of this blog – Please do keep reading.

What is a Data Warehouse (DW) ?

To define the term Data Warehouse (DW) especially to software developers who are new to the industry, have tried asking them a few simple questions before getting to the classic definition in the words of Bill Inmon. Some of the questions which leads to defining a Data Warehouse are:

Q: What is Data?
A: ‘Data’ is a collection of facts which are captured as it happens.
E.g., the content present in a Survey Sheet is ‘Data’

Q: What is information?
A: The details that are derived by processing the ‘Data’ are called Information.
E.g., the details that are arrived from the survey data like total, average etc are called Information

Q: What is a system that collects ‘Data‘ called?
A: A computer system that collects ‘Data’ is usually called an OLTP (Online Transaction Processing System) system. This system is designed to collect data in a much more rapid way.
E.g., The survey data could be captured into a laptop using a software application,An ATM machine or a Core banking system for deposit/debit interaction…

Q: How is ‘Information’ derived from ‘Data’?
A: The ‘Data’ is pulled out from the OLTP system and moved to a separate data store/ system and then processed to derive Information. A computer system that acts as a platform for processing the ‘Data’ to derive ‘Information’ is called a Data warehouse.

The ‘Information’ gathered from DW system helps an Organization in gaining more Knowledge about their business. This gained Knowledge helps the Organization in Decision making hence the DW system which supports decision making is part of the “Decision Support System”

Q: What are the key characteristics of a Data Warehouse?
A: A DW is designed to
1. store large quantity of data across years
2. push out ‘Data’ faster from its storage to the Information processing engine

Q: Why is a Data Warehouse required?
A: The OLTP system is usually used by many people to collect (push) data from the outside world into its storage where as the DW system is usually used by few people to pull the data out from its storage. Volume of data lying inside a DW system is very much higher that that in an OLTP system. The purpose of each system is different so designing a separate OLTP and DW system to cater to their unique requirement became imperative.

But this segregation between OLTP and DW has happened gradually. During the initial years the DW related activities were more done on OLTP systems and it still happens before an organization or department feels the need for a DW system.

The need for a DW system is felt due to issues related to
1. Performance
2. Maintenance
3. Data Integration

To add more variety to your thoughts on Operational BI, you can read it More Data Warehouse

-Pandian C M