Do retailers need a chief data officer?
Organizations have instituted the position of chief data officer (CDO) over the last decade to help make some sense out of the flood of big data. Less than half of large companies have a CDO, however, and their average tenure is between two and two-and-a-half years, according to Gartner.
A recent Harvard Business Review analysis based on conversations with long-tenured CDOs identified reasons for the short tenures:
- Poorly-defined role: As in the early days of the CIO role, corporations are still trying to decide what they want from their CDOs. Newer titles, such as chief information security officer, chief privacy officers and chief analytics officer, are taking tasks initially reserved for CDOs.
- Old technology: Progress is being hindered by legacy systems and data environments as well as related costly upgrades.
- High expectations: CDOs are often held accountable for achieving transformational change within an 18-month period when a multi-year program is required. They are also often tasked with creating a data-driven culture that is a big ask given their technical background.
- ROI hurdles: Data-optimization improvement is hard to measure and CDOs frequently lack the business savvy to sell their progress.
- Poaching: The high-demand CDO can easily find another employer.
Suggestions to help the CDO succeed include linking advanced analytics to business strategies and goals. Strong c-level sponsorship is critical.
The authors of the Harvard Business Review article, led by Thomas Davenport, a professor of IT and Management at Babson College, argue that managing data is “not the same and need different management approaches” versus managing technology, the realm of the CIO/CTO.
Gartner’s “2021 CDO Survey” showed that if senior D&A (data and analytics) leaders are in charge or heavily involved, the organization is more likely to outperform on innovation and more likely to be highly effective in producing business value. Andrew White, a Gartner analyst, said in a statement, “If you want a data-driven culture where data and analytics drive how you excel at decision making, you need a CDO.”
In an article in MIT Sloan Management Review, Randy Bean, CEO of NewVantage Partners, said, “The establishment of the chief data officer role represents a recognition that data matters to the organization.”
- Gartner Survey Finds 72% of Data & Analytics Leaders Are Leading or Heavily Involved in Digital Transformation Initiatives – Gartner
- Do You Need a Chief Data Officer? – Gartner
- Why Do Chief Data Officers Have Such Short Tenures? – Harvard Business Review
- Why Chief Data Officers Must Assume Leadership for Data Success – MIT Sloan Management Review
- Survey of 500+ Data Professionals Reveals Large Gap in the Data Supply Chain Demand for Data Is Growing, But So Are DataOps Challenges – Immuta/Business Wire
- Where does the chief digital officer fit into retail’s executive team? – RetailWire
- The rise of the chief artificial intelligence officer – RetailWire
DISCUSSION QUESTIONS: Do you see a strong need for a chief data officer for retailers and brands in addition to the CIO/CTO? How would you define the role and best position it for success?