Big data has ushered in a new C-suite resident: the Chief Data Officer (CDO).
A quick LinkedIn search shows close to 250 CDOs. And the number is likely to grow rapidly. Gartner expects a quarter of large global organizations to appoint a CDO by 2015. About 17% of these will establish the strategic CxO position this year itself.
Pioneer Data Stewards
The first CDOs arrived a decade ago. Pioneers included Barclay's Cathy Doss, who took over as Capital One's CDO in 2002. Barclay's Usama Fayyad, was responsible for data strategy, policies, and systems — and for prioritizing data investments at Yahoo in 2004.
But the position has really taken off in the last few months as data has emerged as a valuable corporate asset. Several Federal and local governments were the first to hire CDOs, but private companies joined the race soon. Unsurprisingly, banking and finance companies, such as Citi, Barclays and Wells Fargo, are among the first to recruit them.
Today’s CDO is responsible for getting value from the expanse of data being collected across the organization — from sensors to cameras to GPS to points of sales. Their charter is to ensure that the company collects the right data, analyzes it,and applies the results to business decisions to get a competitive advantage.
Where does a CDO fit?
The evolving role still has a somewhat fuzzy job definition. Probably the biggest bone of contention is where the role sits in the organization chart -– on the IT or the business side. While most CIOs feel data is part of their organization, several analysts recommend that the CDO be an independent role, reporting to the CEO. "The CDO role must be positioned to serve as a bridge between business and IT and should sit squarely as a direct report of the COO or CEO," advises this Cap Gemini report.
A typical CIO, they argue, manages applications, infrastructure, and vendor sourcing. It’s a CDO’s job to ensure that data is valid, robust, reliable, and suitable for every business user as part of an informed decision making process. Obviously, CDOs need to be extremely comfortable with hoards of data and big data techniques and analytics tools. But they need to be more than data scientists. They have to strike a balance between technology and business side of the company.
Who’s hiring CDOs?
CDOs are appearing more rapidly in some industries than in others. “Banking, government and insurance are the first three industries to adopt the CDO role and in that order. However, we are now seeing other industries following,” says Debra Logan, research vice president and Gartner Fellow, in a blog post. For instance, advertising agency Ogilvy and Mather appointed a global chief data officer last year. Gartner research points out that a second wave of CDOs is appearing in energy and utilities, pharma, and automotive manufacturing. Many of these industries have heavy regulatory requirements, mature risk-management disciplines, and an understanding of the primacy of data in running the business and reporting on it to regulators. Over 25% of all CDOs are in New York or Washington DC, validating a regulatory, catalyzed trend. Then there are other industries — such as retail — where the emphasis is on using data as an engine of growth or a source of new revenue.
Clearly, CDO is a role whose time has come.