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What is a Chief Data Officer? A Leader Who Creates Business Value from Data

What is a Chief Data Officer? A Leader Who Creates Business Value from Data

A Chief Data Officer (CDO) manages various data-centric activities to guarantee your organisation maximises the potential of its most valuable asset.

The Chief Data Officer (CDO) is a high-ranking executive tasked with overseeing the use and management of data throughout the organisation. Although the title is commonly abbreviated to CDO, it is important not to mix it up with the Chief Digital Officer, which is also often abbreviated as CDO.

The Chief Data Officer (CDO) is a crucial, business-oriented role that goes beyond understanding the company’s strategy and direction; it’s about enhancing it through data. The role is expertly dissected in “The Chief Data Officer’s Playbook” and “Data-Driven Business Transformation: How to Disrupt, Innovate and Stay Ahead of the Competition,” both co-authored by Caroline Carruthers, director at consulting firm Carruthers and Jackson.

Capital One pioneered the trend by appointing the first Chief Data Officer (CDO) in 2002. Initially, the adoption by other companies was sluggish. Yet, in recent years, there has been a significant surge in the momentum for naming CDOs.

Chief Data Officer Salary

Based on compensation analysis from Payscale, the median CDO salary in Australia is AUD 233,000 per year, with total compensation, including bonuses and profit sharing, ranging from AUD 142,000 to AUD 401,000 annually.

Chief Data Officer Job Description

Chief Data Officers (CDOs) manage various data-centric roles, from overseeing data management and ensuring the quality of data to developing comprehensive data strategies. They often handle data analytics and business intelligence, which involves extracting valuable insights from data. While some aspects of data management might be assigned to IT, and analytics could fall under the purview of a Chief Analytics Officer, roles that some argue are synonymous with that of the CDO.

Although some CIOs and CTOs might perceive CDOs as encroaching on their territory, CDOs actually manage vital roles such as data quality, governance, master data management, information strategy, data science, and business analytics. In contrast, CIOs and CTOs are primarily concerned with the management and implementation of information and computer technologies, and overseeing technical operations, respectively.

Chief Data Officer Responsibilities

Gartner states that the Chief Data Officer (CDO) oversees the organisation’s data and information strategy, governance, control, policy formulation, and utilization throughout the company. Initially, the focus of the CDO role was on compliance and data governance.

According to IDC, chief data officer responsibilities include:

  • Innovation: Drives digital transformation, cuts costs, and increases revenue.
  • Analytics: Supports analysis and reporting for products, customers, operations, and markets.
  • Governance: Guides, oversees, and manages company data.
  • Operations: Improves data’s usability, availability, and efficiency.

In Deloitte’s Chief Data Officer survey for 2023, 61% of CDOs indicated that their primary focus for the upcoming year was to create, update, or execute their data strategy. This aligns with findings from the AWS/MIT study, which revealed that slightly more than 60% of participants prioritize spearheading new business initiatives grounded in data, analytics, and AI. Furthermore, about 69% of Deloitte’s survey respondents expressed a desire to dedicate more time to leading data-related activities, rather than evaluating and designing data technology platforms.

Many Chief Data Officers (CDOs) believe that their roles are not well comprehended within their organisations. A survey conducted by AWS and MIT reveals that approximately 73% of CDOs perceive their positions to be less clear compared to other executive roles. The absence of a universally recognised set of duties is likely a contributing factor to this misunderstanding.

Some of the most common CDO responsibilities include:

  • Improving data quality
  • Establishing clear and effective data governance
  • Initiating clear strategies on analytics, AI ethics, cybersecurity, generative AI, and data monetisation
  • Building and maintaining capabilities in advanced analytics, business intelligence, AI, data security, and privacy controls
  • Managing and enhancing the data infrastructure
  • Initiatives for data monetisation
  • Enhancing cybersecurity measures
Chief Data Officer

Roles for Chief Data Officers

An online sampling of posted chief data officer job descriptions across a range of industries shows key areas of responsibilities such as:

  • Evangelising and communicating a data vision as a critical part of growth strategy
  • Creating strategic data access policies
  • Leading the design of analytics infrastructure
  • Developing and executing a central data strategy to drive revenue
  • Overseeing data governance, data investment, and partnerships
  • Strategising with C-level colleagues

Attributes companies are looking for in a CDO include highly motivated, experienced innovators who have produced tangible results, as well as those with senior-level leadership who have overseen data and/or analytics departments for seven or more years.

Chief Data Officer Resume

Landing a job as highly specialised as a CDO requires a strong résumé. For tips from experts on how to write the ideal résumé for chief data officer positions, see “CDO resumes: 4 tips for landing a chief data officer role.”

CDO vs. Chief Analytics Officer

Chief data officers focus on managing data, while chief analytics officers specialise in leading data analytics efforts. However, Guy Gomis, a partner at the recruiting firm BrainWorks, believes that both roles are best combined into one. According to him, top performers in analytics are keen on overseeing both the data strategy and the analytics part. The logic behind this is simple: analytics bring value from data, which is crucial. But without a solid data strategy and management, the data analysed won’t be of high quality. Therefore, Gomis recommends having a single chief officer who is responsible for both data management and analytics, ensuring they work closely with the CIO for the best results.

To Whom Should the Chief Data Officer Report?

CDOs are still figuring out their role in many companies. The CIO’s State of the CIO Study 2024 shows that 24% of CDOs report directly to the CEO, 12% to the CFO or a senior finance executive, and 14% to another business executive. The AWS/MIT survey reveals nearly 20% of CDOs report to the CEO or chairman, over 19% to the CIO, CTO, or another high-level executive under the CEO, and about 16% to a non-C-level executive.

Even as the chief data officer role becomes more common, there’s still a lot of confusion about what the role entails and how important it is. NewVantage Partners’ Data and AI Leadership Executive Survey 2022 found that 52% see the chief data officer as the key person responsible for data strategy and outcomes. However, in 2022, 48% said other C-level executives were responsible, or there was no single person accountable.

Strategy&, PwC’s strategy consulting business, argues the CDO should be a top executive because having a senior-level CDO is crucial for companies wanting to fully leverage data.Carruthers shares this view. She believes the chief data officer could report to different leaders, but prefers the CEO or COO over the CIO.

Carruthers points out, “As the role grows, it’s starting to report to different parts of the company. It’s moving towards a higher status, which is where it belongs. In my view, the CIO and the CDO should operate as partners, and a partnership doesn’t work well when one reports to the other.”

What to Look for in a Chief Data Officer

A survey by NewVantage Partners found that 51% of executives at Fortune 1000 companies believe a successful chief data officer (CDO) needs to be an external change agent bringing fresh perspectives. In contrast, 14% think the ideal CDO is a seasoned company insider familiar with its culture and history. Opinions also vary on the CDO’s background—10% say it should be a business executive with financial accountability, while 19% prefer a background in data science or technology.

Gomis notes that some chief data officers have marketing backgrounds or MBAs without prior data analytics experience. “Most of these hires have not succeeded, but their companies valued their influencing skills over their data analytics capabilities,” he explains.

Being personable can help new CDOs navigate their roles, as misunderstanding the job’s expectations is a common pitfall. Gomis points out the high turnover among CDOs and chief analytics officers in the past three years, attributing it to misaligned expectations between companies and candidates.

The main issue, according to Justin Cerilli of Russell Reynolds Associates, is companies’ unrealistic expectations. Hiring a CDO doesn’t instantly solve problems; it’s just the beginning of addressing them. “The tough decisions come later, involving personnel, processes, and cultural change. CEOs often want CDOs to drive significant changes without altering existing practices, which is a challenge,” Cerilli says.

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