Decision-making, ROI: How chief data officers deliver value

Dive Brief:

Nearly three-quarters (72%) of data and analytics leaders with digital initiatives are either leading or heavily involved in the organization's digital transformation initiatives, according to Gartner's CDO survey of 469 high-level data and analytics leaders released Wednesday.
Chief data officers with business-facing key performance indicators and partners across the business are 1.7 times more likely to demonstrate the ROI and business value, according to the survey. Less successful CDOs focus on technology instead of people.
"Focus on the outcomes: That's the way to win," Andrew White, distinguished VP analyst at Gartner, said during the Gartner Data and Analytics Summit 2021 on Wednesday. "It's not about technology, it's not about the dashboard, it's about the decision."

Dive Insight:

For many companies, data takes center stage in tech strategies. Business leaders use data-driven insights to inform decision-making.

The data-driven approach requires an emphasis on securing data and analytics leadership. Not every business needs a chief data officer, but leadership in data and analytics can help the enterprise use data as an asset and develop a modern approach to planning, according to White.

At Wayfair the company embeds data analytics into every role to fuel data literacy. When data literacy is widespread, every employee is capable of analyzing a data set, drawing conclusions and making informed decisions.

Companies relying on data management tools to make decisions are 58% more likely to beat revenue goals than non-data driven companies, according to a Forrester survey. Data-driven businesses also have an 8% increase in customer trust and 173% boost in compliance with regulations.

"It used to be that data and analytics was hidden inside the bowels of the IT organization producing reports," White said. "Nowadays, it's front and center."

How a chief data officer fits into the organization depends on business needs. A CDO may create data-based forecasts to enable enterprisewide profitability or develop key performance indicators to help business units understand the consequences of their decisions.

"Chief data officers are not necessarily focused on delivering reports," White said. "This is more about decision-making and allocating funds." CDOs think strategy, beyond what a middle manager or front-line operator would decide.

During the COVID-19 pandemic, chief data officers supported operations to push the business past disruptions and prove the value of data. The pressure pushed data and analytics leaders closer to business units and core functions.

"You don't have to have a CDO if you've got great relations, if business leadership understands the role of data and analytics, if decision-making is central to business success, you're probably doing the right things," White said. "But if those things are not quite working well, then a chief data officer is exactly what you're looking for."