Your company has a CEO, COO, CFO, CMO and a CIO. But did you know that you might also need a CDO?

Many organizations assume that the chief information officer can serve as the chief data officer, but according to a survey by NewVantage, only 10.3% of companies believe that the technology executive fits the profile of a successful CDO. So, what is a CDO, and how do you know if your company needs one?

The CDO’s role

As a relatively new role, the job description for a CDO is still undergoing changes. According to Gartner, in 2010, there were only 15 CDOs globally. In 2014, Gartner estimates there were 400 CDOs, and in 2017, there were over 4,000.

“A CDO is responsible for leveraging data assets within an organization, which can include data management through advanced analytics, along with everything in between,” explains Linda Burtch, founder and managing director of Burtch Works, a data science and analytics recruiting agency.

However, since it is still an emerging senior role in most organizations, she says there isn’t a consistent definition.

“The CDO role may focus primarily on management and organization of the data along with data quality and governance, but in some cases their responsibilities will go beyond that to include data strategy, business intelligence, advanced analytics, data engineering, data science, and artificial intelligence,” Burtch says.

In fact, the ability to formulate a data strategy and then execute and align it with the company’s business goals can provide a critical advantage.

“While thinking about long-term strategy, the CDO provides direction for how data is used, where it’s coming from and how it is stored,” explains Dr. Manjeet Rege, associate professor of Graduate Programs in Software at the University of St. Thomas School of Engineering. “This individual also determines the most effective way of collecting relevant data that may provide a significant competitive advantage long term.”

Recent research by Gartner suggests that CDOs should shift from driving data analytics projects and programs to driving a more product-centric company (while managing profit and loss) — a move that will require new skill sets.

Who needs a CDO?

If your company is a digital native, Burtch says you’ll definitely need a CDO, since that’s how you derive your revenue. “While large corporations have always had rich data stores — for example, Capital One, AIG, Walmart, Coca-Cola, etc. — what’s new is that with recent technology it’s become easier and relatively inexpensive for companies to store massive amounts of data and then glean important insights and prescribe action.”

As a result, she believes that all companies need to evaluate the potential of their data as an asset, and how it could be leveraged for competitive advantage. “All companies, large and small, should have someone responsible for their data strategy, even if that role is not necessarily designated as a CDO,” Burtch says.

It’s a view shared by Rege, who says the size of your company shouldn’t be a determining factor. “Rather, the question is whether your company has access to — or the willingness to invest in — the effort to collect a large amount of relevant data.”

For example, even if you’re a small company, but you have access to a large amount of customer data, he says you have a huge competitive advantage.

However, the focus or responsibilities of the CDO may change, depending on the type of products or services that your company offers.

“If you have a consumer facing product, the CDO is focused on how to monetize the data effectively,” Rege says. “If you are a wholesale manufacturer and your product isn’t consumer-facing, your CDO may be more focused on governing data properly and conforming to all compliances.”

This individual can also assist the organization in other ways. “A CDO may ask probing questions to find out who the data stakeholders are, who is accessing the data, how long the data has been used, whether the data is being stored securely, and whether it’s being used for a competitive advantage.”

Here’s an example of how a data strategy can help your company.

Rege says Google was not the first search engine, it was not the first email service, and it was not the first cloud service. “The reason they can capture the market is because they have monetized the data from their other products.”

Gmail began with only Google search engine data. “But now, they have data from the search engine and Gmail that can be used for the Google Cloud services.” And while Gmail is free, Rege says the data obtained was then used to monetize on Google Cloud Services products.

“You see that kind of a trend quite often where companies offer something upfront for free, get your data, and then monetize that elsewhere.” A good CDO can provide that type of data strategy for a long-term vision.

“All companies need to have practices, training and strategies in place to put data first and utilize that data for a competitive advantage in their field,” Rege says.