AI Forcing Many Firms To Rethink Their Data-Crunching Ways

Artificial intelligence is forcing many companies to evolve and rethink how to govern and analyze data, according to survey results released Monday by Gartner.

Based on a survey of 479 chief data and analytics officers, chief data officers, and chief analytics officers worldwide, the results revealed that 61% of organizations are reevaluating their data and analytics (D&A) operating models because of the impact of disruptive AI technologies.

When asked about changes chief data analytics officers (CDAOs) need to make to their D&A operating model to be fit for current and future purposes, Gartner found that 38% said their D&A architecture will be overhauled over the next 12 to 18 months.

In addition, 29% said they would revamp how they manage data assets and adopt and apply governance policies, practices, and standards.

“Responding to the rapid evolution of D&A and AI technologies, CDAOs are wasting no time in making changes to their operating model,” Gartner Vice President Analyst Alan D. Duncan said in a statement.

“While the management of their organization’s D&A operating model is increasing year over year, no other role than the CDAO has the responsibility of many of the key enablers of AI, which include data governance, D&A ethics, and data and AI literacy,” Duncan continued.

“The scope of responsibilities of the CDAO role has also expanded as budget and resource constraints become even more of a problem,” he added.

AI As Musical Star Analogy

The survey results, released in advance of Gartner’s Data & Analytics Summit to be held in London in May, noted that AI has become part of the duties of a majority of CDAOs, with 58% saying AI is within their scope of responsibilities, an increase from 34% in 2023.

“A lot of organizations, especially in the private sector, are redefining their entire business model based on AI, whether it’s going to be for the value of automation, operational excellence or forging new business paths,” said Gartner Senior Director Analyst Donna Medeiros.

“There are a lot of industries that have been using AI for a long time, but gen AI, in particular, has been undergoing a lot of pilots,” she told TechNewsWorld.

Another research firm, Forrester, pointed out in its report “AI Is Ready For The Spotlight, But Data And Analytics Determine If It Shines” that “outputs from AI technologies will only be good as the data that goes into them, so business and technology leaders must embrace best practices for data and analytics to maximize the value from their artificial intelligence.”

“If generative AI is the star actor in ‘Business Technology: The Musical, 2024,’ data and analytics leaders are the stage managers,” noted the report, authored by Forrester analyst Zeid Khater with Aaron Katz, Kim Herrington, Jayesh Chaurasia, Brandon Purcell, Noel Yuhanna, Evan Megan, and Jen Barton.

Setting Stage for Success

Before the star technology can deliver value for its audience of stakeholders and customers, data and analytics leaders must enable the people, processes, and platforms to set the stage for success, Forrester continued.

“Forward-thinking data and analytics teams know that outputs from AI technologies will only be as good as the data that goes into them, and they will embrace data platforms and data quality practices to support [large language models] and unstructured data as well as data skills training to put their staff in the best position to deliver value with new AI technologies,” Khater wrote.

“The work that data and analytics teams do behind the scenes will determine whether new AI technologies flop or shine in the spotlight when they hit center stage,” he added.

Forrester emphasized that improving data quality allows machine learning models to accurately identify underlying patterns, thereby improving prediction accuracy.

“When organizations prioritize data quality through rigorous metrics, assessments, continuous monitoring, and improvement, they not only enhance model reliability but also reduce the risk of biased or erroneous conclusions,” Khater noted. “This improvement in model accuracy translates into cost savings, improved business outcomes, and a competitive advantage.”

Need for Metrics

While metrics will be important for advancing AI in the enterprise, Gartner found CDAOs lagging in that area. It noted that only 49% of surveyed CDAOs have established business outcome-driven metrics that allow stakeholders to track D&A value. In addition, 34% have not established business outcome metrics for D&A.

“Forty-nine percent is low because it means that less than half understand that they need to work with the business to put metrics in place to demonstrate the value of what they’re accomplishing because invariably they’re going to be asked, ‘What did we get for this investment?’” Medeiros said.

“The D&A leader can’t do this in a vacuum,” she continued. Their peers are going to know what’s important to the business and what the [key performance indicators] are so they can get to the actual metrics.”

“CDAOs need to work with all business lines to estimate for all use cases and projects what the impact on return on investment will be based on metrics established during planning time to understand what they achieve,” she explained. “D&A leaders need to engage with business folks to establish metrics and get well above the 49%.”

“CDAOs also have to be comfortable talking about business discipline,” she added. “That’s not easy for many because they haven’t been in the D&A leader role for very long. It’s still a relatively recent role for most.”

According to the survey, only 22% of the CDAOs have been in their jobs for five years or more. And those in those jobs aren’t looking to stay in them, with 56% of the surveyed CDAOs saying they were looking for another job. “That’s because there’s so many demands on that position,” Medeiros said.

Power Play Needed

The Gartner survey also found that expanding responsibilities entails a significant cost for CDAOs. Among CDAOs who report a year-over-year increase in their function’s funding, 46% still report budget constraints as a challenge.

“CDAOs who present better business cases to CFOs receive better and quicker funding for their D&A initiatives. They also gain higher executive buy-in,” Duncan said.

Gartner noted that CDAOs need to grow their power and influence to make things happen. They also must understand the organization’s value levers and pain points end to end to showcase their value to the board.

“If not, by 2026, 75% of CDAOs who fail to make organization-wide influence and measurable impact their top priority will be assimilated into technology functions,” Duncan predicted.