Vendors are the new oil. And the recent rise of Chief Data Officers (CDOs) could show us the path how to gain faster from vendors: with a Chief Vendor Officer.
Do you remember how we were handling our passwords? We all had our own strategy. Some were using everywhere the same password. Maybe twisting a bit according to the password requirements, such as adding a special character or the website name. Others were writing them down in an unlocked document. Others were forgetting them at each new account access.
Since I have moved to password managers (thanks Keepass), I feel light and secure — without this mental burden to create and remember passwords. The transition was interesting. I had to retrieve all my accounts. I understood suddenly that my accounts were all over the Internet. And there was no automatic way to find them (a trick is revealed later). Recognize it, you too have a lot of accounts out there.
That’s the point. As individuals and companies, we steadily increase our use of SaaS vendors. These vendors excel in providing specialized products and services that resolve our needs and pain points. For companies, they are the source of a tremendous potential in efficiency. Such a critical resource must be managed at the top level. Welcome to the Chief Vendor Officer.
The evolution of CxO roles
I know what you are thinking. “What?! Another Chief-something-Officer Role?!”. Indeed, many CxO roles were created over the years (Wikipedia references almost 50). Even the ‘V’ of the CVO is already used by the Chief Visionary Officer.
Traditionally, CxO were focused on their discipline (Marketing, Sales, Technology or Finance). Then in past decades, new CxOs were handling a major resource or risk that was present all through the company (IT, Security, Knowledge or Data).
For example, recently the presence of a Chief Data Officer (CDO) in Fortune 1000 companies has jumped from 12% in 2012 to more than 60% in 2018. This high adoption rate reflects the necessity to manage Data in times of Big Data, AI and privacy regulations.
The exemplary CDO path
Early on, after 2008’s financial crisis, most CDOs were present mainly in the financial sector. Since then, they are in all sectors. In only few years, the CDO role has evolved a lot. Data was seen soon as the new oil, with a lot of potential to provide valuable insights. But first, the data had to be managed.
Thus, the CDO’s concern was at the beginning defensive: security, privacy, regulatory compliance and quality of the data. After that the CDO has become more offensive, i.e. creating value from data. For example, via data collaboration and fostering data science projects (somehow starting often with anti-fraud and customer churn projects).
A lot of skepticism was present when the CDO arrived, since this function was planned to change corporate culture and processes. The need for a Chief Vendor Officer is similar today.
How did I find all my Vendors? Today, users have an easier access to their data than to their vendors. My Vendor discovery process was simply to retrieve all the confirmation e-mail in my mailbox sent after an account creation. Finding account creation via a search bar in my data is easy. Knowing which product or service is present out there and is relevant to me is a harder problem.
The call for Vendors
We are in a Vendor economy. A lot was said about Big Data and AI. It is less highlighted that vendors have an edge. While specializing and providing a generic solution, they collect a rich and diverse data set to solve better the problem they are focused on. For each issue we have, we must think first if this issue is somehow generic and look for a potential vendor.
A suggested roadmap to the CVO
So, what should be the role of the CVO? The CDO shows us the path. The CVO should make some order first and then bring value to the company.
- Be defensive first. The CVO must have the big picture of the vendors and ensure it is responsible to work with them. Not a simple task. As seen, discovering all the vendors is already complex for an individual. Processes need to change to track vendor on-boarding and off-boarding.
Besides, the CVO must ensure compliance with the regulatory, privacy and security requirements (shared personal data, vendor data breach, GDPR).
- Then be offensive. Vendors can provide a lot of value. Their selection and on-boarding should be accelerated, with a defensive line at business speed. The vendor performance should be tracked vs the signed contract. And alternative best-fit vendor search should be standardized where needed.
Above all, a vendor culture must be fostered to prefer by default Vendor solutions over internal solutions for non-core expertise subjects.
I never click on “Forgot password?” link anymore. I know my accounts, and who to update upon major changes (new address, new credit card number or even new e-mail address). I am on top of it.
In our companies, we need roles to account for valuable people or resources. The CDO is the voice of data with untapped potential, and the Chief Product Officer or Chief Customer Officer is the voice of the customers. Who is today the voice of the Vendor?