Only 6% of companies have a Chief Data Officer

27 January 2016 5 min. read
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Although digital transformations have become a key part of companies seeking to reduce costs, improve consumer experiences and compete with new market entrants, only 6% of companies have a dedicated Chief Data Officer employed to coordinate their transformations, research by Strategy& shows. Companies in Europe lead the way in hiring CDOs, with especially the larger companies investing in their transformation through a CDO.

More than a quarter of the world’s population owns a smartphone, while global data traffic has reached 2.5 exabytes per month — that’s 2.5 billion gigabytes, a figure that is 30 times larger than all of the traffic on the Internet back in 2000. The digital transformation is well underway, from industry 4.0 to robotics, and is occurring throughout a range of industries, providing businesses with new means of marketing to customers, understand them and selling to them. According to PwC, companies that invest in digital transformations tend to outperform their peers, and providing solutions to companies seeking to transform has become big business for consulting firms. Yet transformations are not always successful, as a recent Genpact report highlights. Finding ways to improve the success of such transformations has therefore become a key issue for businesses, prompting an increasing number to hire a Chief Data Officer (CDO).

In a recent report from Strategy&, titled ‘Adapt, disrupt, transform, disappear: The 2015 chief digital officer study’, the consulting arm of PwC considers who the CDOs are, and how wide spread their deployment is within the world’s largest 1,500 companies. The CDO role is a relatively complex one, crossing a range of functional tasks, and often aims at transitioning operations, sales and marketing, systems, and production — along with the internal corporate culture and in some cases the company’s products and services themselves – to the digital age.

The study highlights that the high level of press that digitalisation has had in recent years has not yet pushed for the creation of a large number of CDOs. As it stands, of the 1,500 largest companies, only 6% have a CDO. Of these 86 CDOs, 31 have joined in the year previous, highlighting that the office is still in its infancy. In terms of region, Europe has the largest number of CDOs at 13% of businesses in the region studied, followed by North America at 7% of businesses. The MENA had the lowest level of CDO uptake, at 2%.

In terms of the industries with the highest level of CDO deployment, communications, media and entertainment come out on top at 13% of the industry’s total. Food, beverages and agriculture come in second at 11%, followed by consumer products, retail and wholesale at 9%. The lowest level of CDO uptake is in the metals and mining industry where, of the 97 companies surveyed, 1 has a CDO. Utilities, oil and gas too has a low level of uptake, at 2%.

The research also shows that companies with more employees tend to have higher levels of CDO presence. The 200,000+ category has 7% uptake, while the level down, between 100,000 and 199,999, has 9% uptake. The lowest uptake is in organisations with between 0-999 workers at 2%, followed by the 1,000 to 4,999 group at 3%.

The role of CDO is still in its formative stages, having only in recent years come into existence. The role involves a wide range of responsibilities, including externally in the companies’ interactions with customers, partners, and suppliers, and internally in collecting and analysing data, improving efficiency through the use of digital technologies, and transforming the organisation and culture to enable their companies to compete successfully in the digital age. As a result of this, the defining characteristics of the role are flexibility in light of a fast paced environment and a leading a coherent cross-functional approach to digitalisation.

Of the 86 CDOs, marketing is the most common background at 34%, followed by sales and distributions channels at 17%. Technology, surprisingly maybe, comes in at number three with 14%. Consulting background is forth with 13%, while only 2% come from an academic or customer services background. Identifying which background produces the most effective CDOs is yet to be seen. As the office is just a few years old, it is not yet possible to determine whether companies with CDOs perform better in the marketplace than others.

The research also looks at the current level within the business hierarchy the CDO has comes to occupy. Almost half (42%) of CDOs find themselves part of the C-Suite level, providing direct report to the business wide table where they can lead a coherent approach to deploying digital operations. 16% of CDOs need to push through their transformations at director level however, 15% work from vice-president level. In total, 27% are in ‘other’ business levels.