A chief data officer (CDO) is a C-level executive who is responsible for an organization's data use and data governance. The CDO is expected to guide the organization in its ability to derive maximum value from the data available to the enterprise.
As one of the newest positions within an organization's leadership ranks, its position within the org chart varies. The CDO often reports to the chief executive officer (CEO), but the role also frequently reports to the chief operating officer (COO) or the chief financial officer (CFO). Less frequently, the CDO reports to the chief technology officer (CTO) or the chief information officer (CIO).
In many organizations, the chief data officer also works closely with the chief marketing officer (CMO) to use data to improve customer interactions, support customer experience and ultimately drive sales.
The CDO position is related to, but separate from, the job of the CIO. The CIO generally provides and supports the technology needed to collect, store and access the data, with the CDO working collaboratively with the CIO on those technology selections to ensure they support the enterprise's objectives around data use and governance.
Researchers and management consultants believe that the most effective organizations assign clearly defined responsibilities for the CDO, CIO and other executive leadership positions that interact with and support the organization's data management programs.
Evolution of the CDO position
Organizations have been gathering and compiling data as long as they've existed. But the volume of data started to grow exponentially with the rise of computer systems in the second half of the 20th century, as did the opportunities to analyze that growing body of data.
Initially, data processing managers and others within the IT department managed the data and data analysis, with CIOs often having responsibility and oversight for the data programs within their enterprise.
However, the chief data officer position arose in the early years of the 21st century to take on the data management and oversight function.
For example, Capital One appointed Cathryne Clay Doss as CDO in 2002, making her one of the first CDOs and a widely recognized as an early leader in data executive ranks.
The CDO position evolved further in response to increased compliance regulations after the great recession of 2007. At that time, a large part of the CDO's job typically was to help an organization create data governance policies that would ultimately reduce the organization's compliance burden. The focus of the position has since shifted to helping organizations understand that big data is a business asset that can be used strategically to identify new revenue opportunities and reduce operating costs.
As more organizations move to a data-driven decision management (DDDM) strategy, the CDO must ensure that business users have easy access to relevant data and reporting tools and be able to trust in the data's quality. To that end, the International Society of Chief Data Officers (isCDO), a vendor-neutral peer-advisory resource, seeks to "empower CDOs and others charged with leading enterprise strategy, governance, and management of information and data assets." The isCDO is affiliated with the Massachusetts Institute of Technology (MIT).
Role of the chief data officer
Regardless of where in the organization the CDO resides, the position itself is the one that has senior-most responsibility for the organization's overall data strategy.
As such, the CDO has ownership of the organization's strategic use of data -- that is, how the enterprise and its business functions should use the data it has to do the following:
- perform more efficiently;
- improve its existing revenue streams;
- boost its productivity;
- better engage with customers and other stakeholders;
- create new revenue streams; and
- enable new business opportunities.
The CDO is expected to perform these tasks by using various technology systems, including business intelligence and advanced analytics platforms. An equally important aspect of the CDO role is building a team of data professionals who understand the organization's industry, the organization itself and its objectives, so that they then can apply data analysis to address concerns, challenges, risks and opportunities.
In addition, the CDO position is responsible for establishing and maintaining the organization's data governance policy and procedures, ensuring data quality and managing data through its lifecycle.
Such tasks require the CDO to work cooperatively with other C-suite executives. The CDO is also expected to work closely with his or her executive colleagues whose responsibilities also involve data; for example, the CDO is expected to work with the chief information security officer (CISO) as the CISO seeks to ensure the security of the data within the organization, and the CDO is expected to collaborate with the legal, compliance and risk leaders to ensure the organization's data policies comply with applicable rules and regulations.
According to Gartner, the research and advisory firm, the CDO role has gone through several iterations regarding its key responsibilities. The position initially was focused on data management and then evolved to embrace analytics. More recently, the CDO has helped lead digital transformation and, by 2019, the CDO has increasingly focused on products with profit and loss responsibilities. Gartner termed this latest iteration as CDO 4.0.
The isCDO lists more than a dozen key job functions under its online description of the position. For example, the isCDO says CDOs "oversee high-level architectural specifications;" "[develop and implement] a roadmap," set data requirements, and use data to achieve tactical and strategic organizational goals.
Importance of the CDO
As the amount of data being generated by society exploded in recent decades, organizations of all kinds found that they could use business intelligence and analytics to mine both structured and unstructured data for insights about their business, their industry, their customers, market dynamics and consumers as a whole.
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Leading executives understood that they could use these insights to improve their organization's performance in multiple ways, from increasing productivity and workplace efficiency to better connecting with customers to creating new products and services.
More recently, enterprise leaders have come to see data and the ability to mine it for insights and intelligence as critical to driving digital transformation and to competing in the digital marketplace.
Any organization that has matured to the point of seeing data as an asset can benefit from having a CDO in place to manage that asset.
Who needs a CDO?
Given the criticality of data for business success, organizational leadership has come to see for an executive-level position to take ownership of data strategy.
The growing number of organizations with the position speaks to this point. According to isCDO, only 12% of large companies had a CDO in place in 2012. The figure jumped to 56% in 2017 and then to 63% in 2018. Some 90% of large global companies are expected to have CDOs in place by the end of 2019.
Chief data officer vs. chief analytics officer
As previously noted, the CDO is expected to collaborate with other executives on data-driven initiatives and on the analysis of the data.
In some organizations, responsibility for data analysis falls to the chief analytics officer (CAO). The CAO often reports to the CEO, but the position sometimes reports to the CDO.
However, many organizations do not have a CAO and many also do not have both a CDO and a CAO.
Research shows that CDOs come from a variety of prior positions within the enterprise, with many having come from data-centric roles that involved business intelligence and analytics. Many have also been promoted to CDO after working in IT-related jobs, marketing positions and even finance posts.
In the Big Data and AI Executive Survey 2019 from NewVantage Partners, 38.2% of the 65 respondents from Fortune 1000 and other industry-leading firms said they believe a CDO must be an "external change agent" to be most effective in the job, while 32.4% believe a company veteran who understands the organization's culture is better suited for the work. Meanwhile, 29.4% said the CDO must be a line-of-business executive, a data scientist or technology executive.
The study further noted that CDOs believe they're expected to possess all of the above experiences and traits.
According to Salary.com, CDO's base pay in 2019 ranged from approximately $190,000 to $263,000 with the average being $218,000. With annual incentives and other bonuses, total cash compensation jumped up, ranging from $225,000 to $351,000 with an average of $279,000.
Payscale.com put the average CDO pay at $181,851 in 2019.