Creating an Operating Model to Manage the Data Storm

 (US & Canada) A well-defined data operating model enables you to optimize your data, promote innovation, facilitate decision-making, and empower staff

To be an effective Chief Data Officer (CDO), you need a well-defined data strategy and an effective data operating model. By focusing on defining and developing an operating model that enables your data strategy, you will generate positive outcomes for your business. A well-defined operating model to support your organization’s data activities generates the following benefits:

• Improved speed of execution and elimination of redundancy by having a clear understanding of who does what and how things get done
• Optimized value from your data assets
• Increased collaboration and improved results
• Improved speed and quality of decision-making by clarifying who gets involved in decision-making and who has the ultimate authority
• Reduced complexity, costs, and execution time by removing organizational layers and increasing span of control
• Increased clarity around the results and performance metrics

Achieving these benefits and actualizing your data strategy begins by selecting an operating model framework that best aligns with your organization, defining the six elements of an operating model, and  developing a transition plan to incrementally migrate to the target operating model.

What is a Data Operating Model?

Operating Models sit at the nexus of strategy, organization, governance, and process in order to help organizations perform the work they are required to do efficiently, effectively, and in a controlled manner. By defining the structures, interactions, and key process flows in an operating model, you clarify the infrastructure your organization needs to turn strategy into execution.

Operating Model Patterns

Developing an effective data operating model begins with your enterprise and data strategies. These documents articulate core business objectives, the role data plays in the organization, current organizational structure, existing assets, and the culture — to name a few. With this foundation, you can evaluate your current environment against three common models used by most organizations. Each model illustrated in Figure 1 reflects a different approach to data governance, talent, product creation and distribution, investment in infrastructure, and innovation. Choosing the best model for your organization depends on a few key factors:

• How critical is data to the success of your mission?
• How advanced are your data experts and where do they currently reside, organizationally?
• How budget-constrained is the organization?

Common Data Operating Models

Centralized Model

In this model, all data functions and activities reside within a single Office of the Chief Data Office (OCDO). The OCDO ensures data accountability across the organization and oversees data governance and implementation of organization wide data policies and standards. Business units work with the OCDO to define data and reporting requirements and the OCDO delivers information products. This model is effective when there is a strong data culture and a well-established central OCDO supporting a business with simple operations and data structure.

Decentralized Model

Decentralized models are most effective when history and culture have shown success with distributed operations and there are limited cross-data domain requirements and synergies. The model provides flexibility to each business unit but increases data risks from a lack of standards and policies. There is increased possibility of unnecessary repetition of efforts across business units and possible technology capability duplication, resulting in decreased cost-efficiency. CDOs may choose this option when data is not a key business driver and individual business units can perform required activities.

Federated Model

This “hub-and-spoke” model is best applied to organizations with strong and diversified lines of business that have the resources to perform the bulk of data activities. A smaller OCDO provides policy, infrastructure, and other support resources. Each business unit has flexibility, but unlike in the decentralized model, this model features a unified data environment, centralized support with consistent specialized skills, increased cross-domain data synergies, and focus on quality.

Define Your Model

Having considered the three common models and selecting one that best aligns with your mission, structure, and culture, it is time to build your operating model. Our experience has taught us that a critical success factor and the first step is convening data leaders to drive adoption of the new model and codify strategic principles for reference during implementation — doing so helps facilitate adoption and ensures the resulting model will translate from paper to operations. With this group in place and guiding principles established, you should focus on six components foundational to a well-defined operating model.

Transition Planning

The last step is to develop a transition plan and roadmap[1]  that bridges the gap from current to target operating model. Whether you decide to optimize your current model or shift from one model to another is critical. The transition plan should be iterative, flexible, measurable, and include a focus on organizational change management to get and maintain buy-in throughout the process. Consider starting with strategic hires, policy and process changes, and budget realignment. As you proceed, be prepared for unexpected issues and allow for adjustments to maintain momentum.

Selecting and defining a new data operating model and engaging strategic leaders throughout are critical to increasing the probability of a successful transition that allows you to realize your data objectives roadmap.

ROBERT AUDET BIO

Robert Audet leads Guidehouse’s Data Management Team and advises federal and commercial CDOs on better managing and leveraging data as an asset. He has 20+ years of experience, primarily advising chief data officers (CDOs), chief information officers, and data/IT leadership across different industries. He specializes in information strategy, data strategy, Office of the chief data officer Operating Model Design, Data Management Maturity Assessments, Business Intelligence and Data Warehousing, Data Governance, and Data Quality Programs.

CARLY MITCHELL BIO

Carly Mitchell is a director in Guidehouse’s Financial Services practice, focusing on delivering high-impact business transformation and operational strategies for commercial and public sector clients. Carly is a certified facilitator who brings a unique combination of strategy techniques, industry insights, and project management discipline to help agency leaders and C-suite executives develop successful strategies to transform and innovate their operations. Carly is also the 2019-2020 president of the Junior League of Washington, and a graduate of Leadership Greater Washington’s Signature Program.