Chief data officers become linchpin of digital transformation: Gartner

Chief Data Officer profiles - from ForresterChief data officers (CDOs) are proving to be a linchpin of digital transformation in organizations, as revealed in Gartner Chief Data Officer survey.

The survey, which included participation from 287 CDOs and analytics leaders, found that support for the CDO role and business function is rising globally. For example, there was steady increase of the formal title of CDO, 57 percent in 2017 compared with 50 percent in 2016.

Those organizations implementing an Office of the CDO also rose since last year, with 47 percent reporting an Office of the CDO implemented (either formally or informally) in 2017, compared with 23 percent fully implemented in 2016, the survey said.

“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.

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.

According to Gartner, 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 percent of large enterprises.”

Those organizations implementing an Office of the CDO also rose since last year, with 47 percent reporting an Office of the CDO implemented (either formally or informally) in 2017, compared with 23 percent fully implemented in 2016.

“The steady maturation of the office of the CDO underlines the acceptance and broader understanding of the role and recognizes the impact and value CDOs worldwide are providing,” said Michael Moran, research director at Gartner.

Budgets are also on the rise, with an average CDO office budget of $8 million, representing a 23 percent increase from the average of $6.5 million reported in 2016.  Fifteen percent of respondents report budgets more than $20 million, contrasting with 7 percent last year.

A further indicator of maturity is the size of the office of the CDO organization. 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.

With more than one-third of respondents saying “increase revenue” is a top three measure of success, the survey findings show a clear bias developing in favor 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 percent of the CDO’s time is allocated to value creation and/or revenue generation, 28 percent to cost savings and efficiency, and 27 percent 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 vice president at Gartner.

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 percent) also report responsibility for profit and loss (P&L) ownership.

In the 2017 survey, 86 percent of respondents ranked “defining data and analytics strategy for the organization” as their top responsibility, up from 64 percent in 2016. This reflects a need for creating or modernizing data and analytics strategies within an increasing dependence on data and insights within a digital business context.

The survey results provided insight into the kind of activities CDOs are taking on in order to drive change in their organizations. Several areas seem to have a notable increase in CDO responsibilities compared with last year:

  • Serving as a digital advisor: 71 percent 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 percent of respondents are assessing external opportunities and threats as input to business strategy, and 75 percent of respondents are building and maintaining external relationships across the organization’s ecosystem.
  • Exploiting data for competitive edge: 77 percent of respondents are developing new data and analytics solutions to compete in new ways.

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 percent were female and this proportion is even higher within large organizations — 25 percent in organizations with worldwide revenue of more than $1 billion. This contrasts with 13 percent of CIOs who are women, per the 2018 Gartner CIO Agenda Survey. When it comes to average age of CDOs, 29 percent 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 percent of respondents in 2017.

A new roadblock, “poor data literacy,” debuted as the second biggest challenge (35 percent), 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 organizational 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.

Source: Gartner

editor@infotechlead.com