Business Savvy Chief Data Officers Succeed More

Image credit: iStockphoto/fizkes

CDOs are both chief digital officers and chief data officers. While the former has been around in organizations since 2010, the latter role has taken some time to take root, although it may well have appeared earlier.

While the first chief data officer is believed to have been appointed by U.S. financial services firm Capital One in 2002, the role has taken a while to get traction more widely.

PwC did a quantitative study of chief data officers recently — and let’s call them CDOs now for convenience — and found that only 21% of the 2,500 publicly-traded companies worldwide had one in place. Almost half had been appointed since 2019, most of them in the insurance, banking, media, retail, and technology sectors.

Gartner has just conducted its seventh annual Chief Data Officer survey and found a diversity of approaches and levels of success. Some of the CDOs come from IT, others from business backgrounds, and others from data science. But the prevailing message from the survey is that not all CDOs are created equal, and not all of them are enjoying success.

The survey was conducted globally in November last year among 496 CDOs, chief analytics officers, and other data leaders, and a key theme is that the gap is widening.

Among the key challenges cited are talent shortages and cultural issues to accepting change. Both rated as higher barriers to success than a lack of resources and funding, showing once again that the human element in technology implementation is critical.

Data literacy

The CDOs who actively addressed change management and data literacy within their programs were more successful than their peers. Those who invested more in resources and talent were 1.8 times more effective and successful with data literacy programs than those who invested less.

“Increasing data literacy inside the organization enables D&A leaders and CDOs to implement a data-driven culture which encourages the use of data in decision-making,” says Debra Logan, distinguished research vice president at Gartner.

“Executives have realized that in a data-driven organization, D&A is no longer an afterthought. D&A is fundamental to digital business transformation and can deliver value if the CDO addresses both data and business priorities.”

CDOs who proactively engage and build strong collaborative relationships at multiple organizational levels are also the most successful. Higher performance is tied to interaction with specific stakeholders, and in particular, the relationship with the chief executive officer is critical.

“Executives have realized that in a data-driven organization, Data and Analytics are no longer an afterthought”

The 17% of CDOs who report to the CEO are all among the highest performers. But that correlation does not hold for other business reporting relationships.

CDOs who report into a technology function (CIO or CTO) were not correlated with success or its lack. High performers were twice as likely to have active projects with the CEO and engage around value delivery rather than enablement.

Business outcomes

According to the Gartner research, a key ingredient for success requires measurement against a framework that includes revenue generation and monetization, not just capability enhancement and enablement.

Debra Logan’s point is that it's not enough to manage data well or provide analytical tools. Data and analytics need to be prioritized, and measurable business outcomes are part of the maturity path.

The survey found that data management was ranked as the top investment priority by 80% of respondents.

In the evolution of the role, Gartner says that by 2023, the majority of successful CDOs will have a business rather than IT background as boards continue to focus more on digital value.

Success will come from “driving business outcomes and supporting business decisions.” This will require a full spectrum of capabilities, from business intelligence and analytics to “advanced predictive and prescriptive approaches.”

As if that wasn’t enough, CDOs also need to rethink their job role descriptions as talent shortages worsen. This will require looking internally to develop talent through upskilling.

In 2022, the CDO role is maturing, and so are the expectations as data becomes ever more crucial. With maturity comes a focus on value. While some of that comes from new technologies, it also comes down to human issues around corporate reporting frameworks, culture, and training.

So, data, ultimately, has a human dimension after all.

Lachlan Colquhoun is the Australia and New Zealand correspondent for CDOTrends and the NextGenConnectivity editor. He remains fascinated with how businesses reinvent themselves through digital technology to solve existing issues and change their entire business models. You can reach him at [email protected].

Image credit: iStockphoto/fizkes