How to Decide Whether You Need a Chief Data Officer

A Big Market for Big Data Jobs

As a job title, chief data officer (CDO) generates as much confusion as it does excitement. More organizations are appointing CDOs, particularly in government organizations such as the FCC, the Army and the Federal Reserve.

But questions remain about this new role, as IT Business Edge’s Governance and Risk blogger Kachina Shaw pointed out in an earlier post. Among the questions she and others ask:

• Do we really need another C-level executive?
• Would this task be better handled by the CIO?
• Could the CDO usurp the CIO?
• What will CDOs accomplish?
• Who’s qualified to be a CDO?
• What the heck does a CDO do, anyway?

As you might have guessed, opinions vary.

Shaw sees CDOs as an extension of the data analyst role, with the primary role being to provide context and meaning to data. This could mean the CDO falls under IT’s domain, and I suspect that is certainly one incarnation we’ll see.

Peter Sondergaard, a Gartner senior vice president and the global head of Gartner Research, sees the CDO as best placed in the business as a supporting player, rather than a stand-alone executive.

“The CDO is actually best placed in direct support of executives already responsible for product development. That way, the CDO’s focus is locked squarely onto a specific asset or product,” Sondergaard writes.

So, instead of a C-level player who would be seen as competing for power with other CXOs, the CDO becomes a talent who can help other leaders find new sources of revenue, he explains.

In a follow-up post, Sondergaard even questions whether the job role will have staying power, suggesting a CDO may be more of a temporary agent of change that helps CEOs revise the corporate culture.

To be honest, I’m not sure this is even worth arguing about at this point. From what I’ve seen, these things tend to vary by organizations. Some CEOs may be managing a culture where the CDO will need to be a direct report to achieve anything. Others may find the CDO’s job dissolves as the corporate culture becomes more data savvy.

Rather than worry about these types of details, Thomas C. Redman, aka “the Data Doc,” proposes a better starting question: Do you even need a CDO?

You may be surprised at how often the answer is still “No.”

Writing for the Harvard Business Review blog, Redman lists several jobs you may think require a CDO, but in fact do not, including:

• Establishing basic data management capabilities. “Too many companies are a full generation behind, and acquiring those capabilities in a hurry may be necessary. But it does not demand a CDO.”
• Improving regulatory reporting
• Ensuring IT systems talk to each other
• Helping analytics take root throughout the company

It begs the question: When do you need a chief data officer? And the answer to that question is actually pretty straightforward. According to Redman, you need a CDO when you want to compete with data.

“A company only needs a Chief Data Officer when it is ready to fully consider how it wishes to compete with data over the long term and start to build the organizational capabilities it will need to do so,” he writes. “You need to be ready to charge him or her with fully exploring what it takes to compete with data.”

So, for Redman, the most critical questions to ask aren’t about the CDO’s role at all, but rather, “How does data allow us to do things that we’ve not thought we could do?”  and “What if a competitor, perhaps one we hadn’t thought of as a competitor before, gets there first?”

Redman outlines a checklist for deciding whether you are really ready for and need a chief data officer. Here’s a hint: It’s a very business-focused decision that has more to do with data quality being a business requirement and a pressing need to “import ideas from those on the leading edge.”