Gartner, which once saw the Chief Data Officer (CDO) position as an interstitial function at best, now says its research suggests companies see these data and analytics leaders as the lynchpin of digital business transformation.
The third annual Gartner Chief Data Officer survey was conducted July through September 2017 with 287 Chief Data Officers, Chief Analytics Officers and other high-level data and analytics leaders from across the world. Respondents were required to have the title of CDO, Chief Analytics Officer or be a senior leader with responsibility for leading data and/or analytics in their organisation.
“While the early crop of CDOs was focused on data governance, data quality and regulatory drivers, today’s CDOs are now also delivering tangible business value, and enabling a data-driven culture,” said Valerie Logan, research director at Gartner.
“Aligned with this shift in focus, the survey also showed that, for the first time, more than half of CDOs now report directly to a top business leader such as the CEO, COO, CFO, president/owner or board/shareholders. By 2021, the office of the CDO will be seen as a mission-critical function comparable to IT, business operations, HR and finance in 75 per cent of large enterprises.”
The survey found that support for the CDO role and business function is rising globally. A majority of survey respondents reported holding the formal title of CDO, revealing a steady increase over 2016 (57 per cent in 2017 compared with 50 per cent in 2016).
Those organisations implementing an Office of the CDO also rose since last year, with 47 per cent reporting an Office of the CDO implemented (either formally or informally) in 2017, compared with 23 per cent fully implemented in 2016.
“The steady maturation of the office of the CDO underlines the acceptance and broader understanding of the role and recognises the impact and value CDOs worldwide are providing,” said Michael Moran, Research Director at Gartner.
“The addition of new talent for increasing responsibilities, growing budgets and increasing positive engagement across the C-suite illustrate how central the role of CDO is becoming to more and more organisations.”
Budgets are also on the rise. Respondents to the 2017 survey report an average CDO office budget of $8 million, representing a 23 per cent increase from the average of $6.5 million reported in 2016.
Fifteen per cent of respondents report budgets more than $20 million, contrasting with seven per cent last year. A further indicator of maturity is the size of the Office of the CDO organisation.
Last year’s study reported total full-time employees at an average of 38 (not distinguishing between direct and indirect reporting), while this year reports an average of 54 direct and indirect employees, representing the federated nature of the Office of the CDO design.
CDOs shift from defense to offense to drive digital transformation
With more than a third of respondents saying “increase revenue” is a top-three measure of success, the survey findings show a clear bias developing in favour of value creation over risk mitigation as the key measure of success for a CDO.
The survey also looked at how CDOs allocate their time. On a mean basis, 45 per cent of the CDO’s time is allocated to value creation and/or revenue generation, 28 per cent to cost savings and efficiency, and 27 per cent to risk mitigation.
“CDOs and any data and analytics leader must take responsibility to put data governance and analytics principles on the digital agenda. They have the right and obligation to do it,” said Mario Faria, managing VP at Gartner.
CDOs are responsible for more than just data governance
According to the survey, in 2017, CDOs are not just focused on data, as the title may imply. Their responsibilities span data management, analytics, data science, ethics and digital transformation.
A larger than expected percentage of respondents (36 per cent) also report responsibility for profit and loss (P&L) ownership.
“This increased level of reported responsibility by CDOs reflects the growing importance and pervasive nature of data and analytics across organisations, and the maturity of the CDO role and function,” said Logan.
In the 2017 survey, 86 per cent of respondents ranked “defining data and analytics strategy for the organisation” as their top responsibility, up from 64 per cent in 2016. This reflects a need for creating or modernising data and analytics strategies within an increasing dependence on data and insights within a digital business context.
CDOs are becoming impactful change agents leading the data-driven transformation
The survey results provided insight into the kind of activities CDOs are taking on in order to drive change in their organisations. Several areas seem to have a notable increase in CDO responsibilities compared with last year:
- Serving as a digital advisor 71 per cent of respondents are acting as a thought leader on emerging digital models, and helping to create the digital business vision for the enterprise.
- Providing an external pulse and liaison 60 per cent of respondents are assessing external opportunities and threats as input to business strategy, and 75 per cent of respondents are building and maintaining external relationships across the organisation’s ecosystem.
- Exploiting data for competitive edge 77 per cent of respondents are developing new data and analytics solutions to compete in new ways.
CDOs are diverse and tackling a wide array of internal challenges
Gartner predicts that by 2021, the CDO role will be the most gender diverse of all technology-affiliated C-level positions and the survey results reflect that position.
Of the respondents to Gartner’s 2017 CDO survey who provided their gender, 19 per cent were female and this proportion is even higher within large organisations — 25 per cent in organisations with worldwide revenue of more than $US1 billion.
This contrasts with 13 per cent of CIOs who are women, per the 2018 Gartner CIO Agenda Survey. When it comes to average age of CDOs, 29 per cent of respondents said they were 40 or younger.
The survey respondents reported that there is no shortage of internal roadblocks challenging CDOs. The top internal roadblock to the success of the Office of the CDO is “culture challenges to accept change” — a top-three challenge for 40 per cent of respondents in 2017.
A new roadblock, “poor data literacy,” debuted as the second biggest challenge (35 per cent), suggesting that a top CDO priority is ensuring commonality of shared language and fluency with data, analytics and business outcomes across a wide range of organisational roles.
When asked about engagement with other C-level executives, respondents ranked the relationship with the CIO and CTO as the strongest, followed by a broad, healthy degree of positive engagement across the C-Suite.