Why the Role of Chief Data Officer Is Gaining Influence in Enterprises

Why the Role of Chief Data Officer Is Gaining Influence in Enterprises

There was a time not long ago when the position of Chief Data Officer (CDO) had little importance or influence in the C-suite. But a new study from research firm Gartner finds that CDOs are becoming increasingly important in the corporate hierarchy. And within the next five years, a significant number of enterprises will rely on CDOs to make strategic decisions that have a direct impact on the bottom line. But as CDO budgets and decision-making influence grows, the executives will have to achieve their goes within slowly evolving corporate cultures and work with CEOs that don’t always understand the value of data. Still, Gartner’s research suggests that this is a good time to be CDO. Read on to learn more:

CDOs Influence Is Increasing in the Corporate Hierarchy

CDOs haven’t always received the respect they deserve, but Gartner’s study suggests that’s changing. For the first time since Gartner surveyed CDOs, the researcher found that more than half of them are now reporting to top business leaders, including CEOs, board members, and COOs. By 2021, 75 percent of organizations will view CDOs as a “mission-critical function,” according to the report.

CDO Budgets Are Rising

Given the growing importance of CDOs, budgets are also on the rise. The average CDO budget is now $8 million, a 23 percent increase compared to the $6.5 million companies were spending in 2016. Fifteen percent of respondents said they had budgets exceeding $20 million. That’s up from just 7 percent in 2016.

CDO Staff Is Also Increasing

As budgets rise, the number of people reporting to CDOs is also jumping. In 2016, CDOs had an average of 38 employees working for them. In 2017, that figure jumped to 54 direct and indirect employees.

CDO Responsibilities Extend Beyond Data Resources

The average CDO isn’t just thinking about data. Instead, they’re tasked with analyzing analytics, ethics, and digital transformation, among other things. A surprisingly large number—36 percent— said that they are responsible for corporate profit and loss.

But they Mainly Focus on Data Strategy, Analytics

CDOs confirm that they focus mostly on data resources and analytics with 86 percent of CDOs reporting said that “defining data and analytics strategy for the organization” is their top responsibility, up from 64 percent in 2016.

They Serve as Their Company’s Digital Advisor

More than seven in 10 CDOs report that they’re the main point person for “acting as a thought leader on emerging digital models.” CDOs also report that they’re tasked with creating the “digital business vision” for their companies.

CDO’s Need to Track External Technology Trends, Opportunities

In a bid to prepare the company for growth, 60 percent of CDOs said that they’re currently “assessing” and analyzing the external environment to identify “opportunities and threats” that can be incorporated into the broader business strategy.

Using Data Analytics for a Competitive Edge Is a High Priority

Top company executives, including CEOs, are also asking CDOs to use data and analytics to give the company a competitive edge. More than three-quarters of CDOs said that they’re currently working on new data and analytics solutions with that specific goal in mind.

CDOs Are a Diverse Group

The CDO position will be the most gender-diverse technology-related C-level position by 2021, according to Gartner. In 2017, 19 percent of CDOs are female, and that figure jumps to 25 percent for companies with worldwide revenue exceeding $1 billion. In contrast, just 13 percent of CIOs are female. Another telling statistic is that 29 percent of CDOs are 40 or younger.

CDOs Face Challenges in Many Enterprises

Despite the growing importance of CDOs, they’re facing some roadblocks to success. The top issue they face is getting the company to adjust its culture and accept the change that CDOs can bring to bear. That was followed by generally “poor data literacy” in many enterprises and trouble communicating data-based opportunities to non-technical people.