Chief Data Officers: Does Your Company Need One?

We generate more than a quarter-million terabytes of data every day. Data that corporations capture and analyze as a part of “big data” initiatives to create value for their company. But how is that data turned into value? How is stored? Who decides what information to collect? All this is the purview of a new executive officer, the Chief Data Officer, or CDO.

A History of Data Technology

In the mainframe era of the 1960s, the highest-ranking employees of the IT department were known as electronic data processors, or data processing managers, responsible for the maintenance and operation of massive computers for processing data.

In the 1990s, management of IT departments moved up to the executive level. The new position of Chief Information Officer (CIO) reflected the growing importance of information technology. These executives were responsible for maintenance and operations, just like their predecessors, but were also tasked with matching the company’s technology infrastructure to its current needs and future goals.

The role of Chief Data Officers began to appear in the 2000s, as the need for complex analytics and big data strategies necessitated an executive with expertise in not just technology, but also data analysis, and security.

The Role of CDO

The CDO’s role involves overseeing everything to do with a company’s data: strategy, maintenance, policies, security, and more. Often CDOs are tasked with bridging the gap between departments. One of the first CDOs appointed by a worldwide corporation, Cathryne Clay Doss of Capital One combined the companies’ efforts to analyze financial markets and manage the supply chain with the capabilities of their IT department.

Around the same time, Yahoo!’s first CDO, Usama Fayyad, managed big data initiatives that mined user data and used it to better target advertisements, creating value for the company. Another groundbreaking CDO, Steven Hirsch of NYSE Euronext helped to develop software for quickly analyzing queries with a large dataset, making big data initiatives easier to manage.

Each of these pioneering CDOs, appointed when the position was first gaining traction, helped to create value for their company with a data strategy that reached beyond the frame of a traditional IT department and focus on careful collection, analysis, and decision-making based on data.

Data-Driven Business

Each year, large organizations lose $9.70 million to decisions made based on poor-quality data. The bigger the company, the more they stand to lose. Creating value from data requires that information be collected in a timely manner and that it be accurate, comparable, complete and relevant. Knowing what data they need and how to collect it is one of the most important responsibilities of the CDO.

Companies collect information on users and employees, monitor operations, track supply chains, and financial transactions, and catalog online reviews. When done correctly, that data can be analyzed to streamline operations, create more effective training programs, and micro-target potential customers who are most likely to buy. All in all, 80% of companies find that big data initiatives are beneficial for their company.

From 2012 to 2016, CDO positions at Fortune 1000 companies more than quadrupled. And large companies aren’t the only ones hiring CDOs. In 2011, Chicago became the first city to hire its own CDO, with New York, Los Angeles, and Washington, D.C. following soon after.

Check out this infographic to learn more about CDOs: