Data & Analytics teams can be centralised or decentralised within an organisation. The functioning framework of D&A teams is frequently discussed and the trends of what seems to work best tend to be cyclical. Lately, many organisations have found that the centralisation of D&A teams has been a central discussion point of focus due to its effect on performance. The reshaping of D&A teams and the effect they’re having on the framework and approaches can dictate what the future may be like for the company’s data output.
If an organisation opts for a decentralised approach, it is expected that CDO roles will slowly scatter. It is thought that traditional centralised frameworks can slow things down and thus be less efficient when reacting to quickly changing data requirements and technological updates. Some may argue that a decentralisation shake-up may streamline the process enabling quicker decision-making and remodelling to changing environments.
Building a smaller and more dedicated D&A team into a particular section of an organisation could allow a tighter relationship to form between the data experts and the business sector. Through this more specific and personalised action can be taken when putting data and analytics into play and help coordinate with the project ongoing at that time. Naturally, a team requires a leader. This leader, when placed in the specific team within a particular sector of the business will have the knowledge and functionality of the specialised requirements of that particular sector, as well as any challenges that that sector may be facing. At the end of the day, everyone wants the same outcome, good trustworthy data to make data-informed decisions that help the business. This approach is better than a “one size fits all” approach, and organisations need to decide which approach works best for them.
Decentralisation can promote a data ownership mindset across the various sectors of the business instead of consolidating it within a sole entity. This distribution and sharing of the role can aid in accountability and ownership and push employees to actively welcome involvement in data-driven projects. However, it’s essential to acknowledge that decentralisation also comes with its challenges. For instance, coordinating and aligning multiple decentralised teams may lead to inconsistencies in data practices and standards across the organisation. Additionally, decentralisation can potentially increase the complexity of data governance and oversight, requiring robust mechanisms to ensure data quality and compliance.
Furthermore, centralised frameworks with a single CDO have the potential to lead to a single point of failure. It is as though the CDO is the centre point for all things ingoing and outgoing that are data-related. If the centre point is missing, then the data flow stops. Having only one person assigned to all things data and analytics is considered to be somewhat risky. Decentralisation distributes knowledge and accountability across the organisation, lessening dependence on just one employee.
On the other hand, some organisations may choose to keep all their data and analytics work in one centralised team. This might be because they think it’s easier to manage everything in one place, or because they’ve always done it that way. It could also be that some organisations are starting to set specific financial goals for their Chief Data Officers and these goals are linked to how successful the company may be and how profitable its ventures may be.
Companies are increasingly setting financial targets for their data initiatives. This means they’re using data to figure out how to make more money or grow their business. By setting these financial goals, they’re making sure that all the work they put into gathering and analysing data is actually helping them reach their goals, like making more profit or growing in size. It’s a way for them to make sure their data efforts are really making a difference in their bottom line and overall success.
The shift from centralised to decentralised and vice versa in the Data & Analytics teams marks a significant shift in how organisations use data to make data-informed decisions and meet objectives. Of course, both approaches have their benefits and challenges. Having teams dedicated to generating data is not just a good idea, but critical for success. Leaning into these changes and using data as a vital resource will be essential for organisations wanting to be successful.
Sophie Muscat
Sophie is our Head of Marketing. She has a wealth of experience in marketing and communications, having driven strategic initiatives and managed direct communications.
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