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The analog economic order is continuously converting towards a data economy while being shaken by drastic demographic and societal changes. In this light, strategic data usage and the role of a Chief Data Officer (CDO) gain high importance as the connector of people and innovation in tomorrow’s digital business landscape. With increasing technical requirements and reporting obligations, CDOs have the central role to make a difference in the way companies deal with new and compulsory collections of data.
At PwC Germany (PwC), we anticipated this profound shift and took our measures. A Data Platform was established across the global PwC network to swiftly adapt to a changing international operating environment.
So, how can CDOs leverage data in an ever-changing business, societal and political environment in the EU?
Europe's business environment is rapidly digitizing, driven by technological advancements as well as the citizen-led democratization of data. This transformation is not just a response to external pressures such as global crises and extensive regulatory requirements. Businesses are increasingly exploring online markets, slowly surpassing traditional analog models and adapting to changing consumer preferences.
In the EU, the turnover of online businesses has grown by over 70% since 2017, reaching an estimated €712.5 billion this year. Therefore, we consider it a proactive shift in the business environment to stay competitive in a digital economy.
In parallel, European society is aging. Companies mourn about a lack of skilled labor in both traditional and newer, highly demanded fields like tech and digital. In light of the demographic development, this is no surprise — The share of the EU-27 in the world population decreased from 11.68% in 1960 to 5.7% in 2020 and is expected to further decline to 3.83% by 2100.
In addition, the younger generation has different values. Rather than business growth, European 16–26-year-olds prioritize raising awareness for sustainability and fighting climate change. The majority hence calls for government intervention in climate protection through taxation and regulatory measures, putting pressure on political decision-makers to include these aspects in future legislation.
With the start of Ursula von der Leyen’s presidency of the European Commission in 2020, a new green and digital era was proclaimed – responding to the growing societal awareness and demand for sustainable and ethical practices. The European Union (EU) took on an ambitious course towards climate neutrality by 2050 with the “European Green Deal” while also declaring “Europe’s Digital Decade”.
The latter aims at making more use of data and driving the digital transformation with concrete goals — the European Commission plans to have 75% of businesses utilizing Cloud/AI/Big Data, while also ensuring that 90% of SMEs achieve a minimum level of digital intensity by 2030.
Additionally, it is working on making sustainability an integral part of its financial policy in order to support the European Green Deal. To do so, a stringent EU taxonomy, requirements for supply chain contracts and benchmarks on meeting Environmental, and Societal and Governance (ESG) criteria for all business activities in the EU was implemented.
Companies’ progress is verified through reporting and the disclosure obligations of planned and executed investment activities. Based on this data, public funding bodies will take a decision on granting loans for large business activities within the EU.
These regulatory decisions reflect the growing demand from consumers, investors, and stakeholders for businesses to operate ethically and sustainably, resulting in these values and data becoming a core part of the decision-making processes of businesses.
These new regulations imply a new level of big data collection which requires two levers to be controlled.
Firstly, efficient governance and management are needed to facilitate the required data in a timely and safe manner. New approaches to large-scale cross-company data sharing through harmonized frameworks and scalable data platforms will be crucial.
Secondly, the competence to identify new business opportunities through the use of the collected data and the ability to convince business leaders of the data’s inherent growth potential. The new paradigm will shift from B2C data to B2B data which is increasingly suitable for internal controlling and efficiency gains.
Hence, the mere administration of data will not be enough. We would forgo the opportunity to use data as a shared asset, leverage it for new business models and feed it into the creation of new data products. We would miss out on its potential to turn into an infrastructural component and business driver.
As the shift towards data-driven decision-making accelerates, the CDO role is becoming increasingly important for organizations. As the ones responsible for data, we have the overall view of how the company is keeping up with its data work.
We can assess both the technical feasibility and the harmonization of the business and data strategy which are both essential for the functioning of a company to stay competitive in a modern economy. Therefore, we are the intermediary between the business and tech side.
Focusing on the defensive aspects of data management will not get us far enough. With the changing business environment, the expansion of the offensive data strategy should be of special interest to leverage the potential of corporate data assets.
So, how can we lay down the foundation for this and use the increased volumes of data efficiently?
A technical way to store and connect various large data sources is via a data ecosystem. It combines data from different providers and can create value by using processed data. Data ecosystems represent a technical infrastructure for the internal data work on the one hand but also help retrieve more and better insights from our corporate data via more efficient and standardized data usage and accessibility, on the other.
When talking about ecosystems, we also keep an eye on data spaces. As a reaction to the ongoing changes in society and the business landscape, the EU has started working on a European data infrastructure with the political desire to remain competitive and digitally sovereign in the cloud market.
An example is the German-French-driven project Gaia-X which aims at creating a trustworthy, secure, and transparent data infrastructure in the EU that can be used to exchange and process data. It started playing an important role in the current data discussions and rose along with nine industry-specific data spaces that the EU plans to implement.
As CDOs, we have the role to introduce change and new technologies to keep our companies at the forefront of market innovation, yet, the CDO’s current position is most often under scrutiny and CDOs are busy arguing for their role instead of driving change. We need to show that we are more than a tech department. Our holistic solutions help and bring real business benefits.
Considering these ongoing changes, we in the PwC network, similar to the thoughts of the European Union bodies, too, have taken measures to adapt to the changing environment and be prepared for the requirements of the future economy. With the Your Tomorrow Galaxy, we introduced a global program fostering citizen-led digital skills and tool training in our network.
Over the course of PwC’s digital transformation, we also took into account the opportunities of working together internationally and consider the company set up in a federated network as a special strength. The federated network structure is very resilient and can adapt flexibly to changes. For better business practice, we work together in a community of CDOs and learn from each other in best practices on data and analytics.
The latest measure is the established Global Data Platform which allows us to share all the necessary tools and services across our global PwC network to work with data. With this centralized data and analytics platform ecosystem, it is possible to acquire, transform, visualize, and share data with external and internal customers.
It provides a secure, cloud-based environment to collaborate, perform analyses and visualizations or otherwise work with data sets of any size. The latest analysis and data processing tools are connected to the platform and can be used on it. As a result, we got a unique digital experience.
About the Author
Marcus Hartmann is a Partner and the Chief Data Officer for PwC Germany and Europe. PwC Germany. More than 13,000 dedicated people at 21 locations. €2.61 billion in turnover. The leading auditing and consulting firm in Germany.
As a proven data expert, Marcus has spent his entire career in the data & analytics industry, helping companies to move more easily and quickly in an increasingly data-driven world and to develop and implement new data-driven business models.
Marcus Hartmann joined PwC Germany in August 2019 and established the Chief Data Office and a corresponding internal Digital & Delivery Unit. He leads a team of data, software, and digital experts to create and develop the foundations for efficient and scalable data use within the company and the realization of highly scalable, market-oriented data products and new digital business models. In addition, he is teaching digital technologies at the Macromedia University of Applied Sciences.