Redefining The CDO: The rise of the chief data officer

Last winter, Sainsbury’s appointed Andrew Day as their Chief Data Officer. Such a significant C-suite appointment – one that was historically a subset of IT or marketing (and a first for the UK grocery sector) merits analysis. Why a Chief Data Officer – and why now? Sainsbury’s comment: “Creating [Andrew’s] role reflects the value we place on our insights in an increasingly fast-paced and digital world”.

Sainsbury’s appointed their first CDO, Andrew Day, last year

Over the last ten years, MBS has seen three incarnations of the CDO role.

In the first instance, the CDO focused on the very practical aspects of data, reporting into the CIO and focusing on governance. They created the data architecture and warehouses, integrated multiple data-streams across a business and liaised with third party data providers (such as Dunhumby or AIMIA). In short, they created relevant data sets that could then be passed over to analysts within specific functions (in particular marketing) to action.

Initially, the CDO was focused on the practice aspects of data

In this era, the CDO was a scientist, a builder, an architect – not necessarily a “business person”. The analysts often dictated to the CDO the data they needed, and the CDO delivered. The CDO and the data function was a servant to the business, siloed away from core commercial decision-making. In other words, data was accessed and analysed. Far from being in in the driver’s seat, data was ostensibly passive.

The role then evolved. Increasingly, companies realised the benefits of unifying data with analytic functions across the business to create meaningful insights. Still generally reporting into the CIO, the CDO assumed responsibility for assisting business leaders (primarily within marketing and finance functions) to interpret data sets to address company-wide opportunities and threats.

In other words, the CDO evolved to become an enabler of data – allowing business leaders to access and interpret data that they could then develop their strategies around.

The role of the CDO has evolved to its current form, as a commercial leader within a business

In recent years, however, the role has evolved still further.

As the source and scale of data has fundamentally changed – with social media, multi-channel retail and digital operations all providing key data inputs, companies can today take the billions of data-points they collect from their customers (through every possible source: digital, footfall, till-usage, clicks, dwell time, stock-take, requests, returns, referrals, searches, labour productivity etc.) into meaningful insights – and can thus leverage decades of customer data to improve processes and operations, commercial, supply chain and logistics.

The new era of CDO needs to understand and influence the entire C-suite

In this new era of data, CEOs have very different expectations of data and the consumer signals it can deliver. And once more, the CDO needs to evolve from a scientist and enabler into a commercial leader. The new era of CDO needs to understand and influence the entire C-suite (in particular the CIO, CCO, COO and CMO) to draw enterprise-wide data and insights, which can then be analysed and translated into short-term actions and medium-term strategy.

We have found that – as is often the case in an underdeveloped executive-level position – there is now a significant talent gap of Chief Data Officers. Whilst there are many excellent traditional ‘Chief Data Scientists’ or ‘Data Architects’ – and indeed many ‘Insight Directors’ or even ‘Chief Analytic Officers’ – there are very few candidates who have the ability to step out of their function into a wider board-level role, with all the influencing skills that are required for a true, modern, Chief Data Officer.

The ever-increasing, transformational influence of ‘big data’ and its use across all functions means that the CDO role will continue to evolve and develop. What will the next iteration of the CDO be? Will technology and the CIO function eventually become an enabler and report of the CDO? Will the top CDOs step into broader commercial – and even CEO – positions?

We at The MBS Group look forward to following the continued development of the Chief Data Officer function – and the advances in customer services and analytics that will come with it.

One thing that’s already clear, even in the early days of the most recent incarnation of C-level CDOs, it is that the companies who invest in converting the millions of signals their customers are communicating to them every day into strategies they can then roll out, stand to benefit significantly in this ever-expanding world of data. | @TheMBSGroup | The MBS Group