One-fifth of listed companies have Chief Data Officer in place
The number of companies adopting the Chief Data Officer has grown quickly in recent years. Globally, the figure stands at more than one-fifth, with the US market leading the way.
A decade ago, few businesses had an idea of what a Chief Data Officer (CDO) even did, let alone had installed one in their own C-suite. A CDO is a corporate officer responsible for enterprise-wide governance and utilisation of information as an asset, via data processing, analysis, data mining, information trading and other means. But if firms didn’t know what they were before, they certainly do now.
In 2015, a study from Strategy& found that just 6% of companies had a CDO. With the release of its 2022 edition of that same benchmark, however, Strategy&’s researchers now believe 21% of all listed firms have one in place. So what has changed?
According to the researchers, the past decade has seen data begin to transform every area of social, economic and corporate life. With the interconnectedness of everyday life, the advent of smart technology, and the proliferation of the internet into all corners of the market, the scale of data available for businesses to harness is growing exponentially, from personal and work devices in homes, stores, offices and supply chains. Taking advantage of this data is easier said than done, though, especially while adhering to public ethics and regulatory standards – meaning a rising number of firms have created a specialised position to oversee data application.
Of the companies which Strategy& surveyed in the last year, the largest number said they had a CDO in North America. There were 300 firms with a CDO there – or 34% of listed companies – compared to 137 in Europe; which had 26% proliferation.
To some extent, this was expected as the US is what Strategy& terms “the vanguard of the global data revolution,” however Europe’s development on this front is a little underwhelming when compared to another region. For all the idea that Europe’s CDOs are becoming more prominent due to the stringent GDPR regulations having come into force, South and Latin America are ahead of Europe on this basis. While the number of businesses analysed was smaller, 27% had a CDO – suggesting European firms need to up their efforts.
At the same time, it is worth noting that CDO adoption is not uniform across all industries. Perhaps understandably, customer-centric industries tend to focus most heavily on the position. Insurance, for example, is the market leader, with 46% of firms having a CDO, as firms look to deploy the global glut of data to analyse and refine the costs of coverage. Meanwhile, media and entertainment companies are also high-performers, as they seek to harness swathes of data to produce content that can bring in the widest audiences possible.
However, the last two years in particular have shown that beyond customer service, firms must have a keen understanding of their supply chain, if they are to weather storms like a pandemic, or climate change disruption. Production-centred firms have the lowest number of CDOs though, which may mean they are not making the most of supply chain data.
Looking at the lessons to be learned from the pandemic, the authors concluded, “We believe that the rise in CDO appointments in the last two years suggests that the CDO role will continue to grow in the near term – but by how much, and for how long, is uncertain, especially given that companies are still absorbing the unprecedented impact of Covid-19… Based on the results of this first CDO study, we recommend that companies should address a series of critical questions, regardless of whether they have already appointed a CDO or are just examining how to define this role.”
