BrazilStrategy& reports investigates the rise of the Chief Data Officer
While much has been made of the emerging Chief Data Officer role, very little data tracking has been performed on its rise to date. A recent study from Strategy& seeks to address this irony.
A global study conducted by consultancy Strategy& into the emergence of the Chief Data Officer among leading companies in recent years has found that barely a fifth are yet to feature such a position within their senior executive branch, despite evidently recognising the strategic importance of harnessing data in driving growth. Although well outpaced by North America, companies from the Middle East were slightly above the global average.
To perform its study, Strategy& looked into the senior executive set-ups at the world’s 2,500 largest publicly-listed companies (with a CDO defined as an individual at C-suite level or the rung below with responsibility for driving a company’s strategic approach to data), along with employing natural language processing technology to scan the recent annual reports of 1,000 companies to determine the rising prevalence of data on corporate agendas.
As to the latter exercise, the strategy consulting firm found that over the past five years, two thirds of the companies studied had increased their references to data when appraising shareholders, with these companies mentioning data at an average of 52 times in their most recent reports. All up, the frequency of data references has increased by close to 80 percent since 2017, or by around 15 percent in each of the past five years.
“Over the past decade, data has begun to transform every area of social, economic and corporate life,” writes Strategy&, noting that over 40 percent of employees are willing to embrace a data-driven future. “The scale of data available for businesses is growing exponentially, driven by the rapid adoption of cloud technologies and the proliferation of connected personal and work devices in homes, stores, offices and supply chains.”
Still, only 21 percent of companies overall had appointed a CDO, with that figure rising ever so slightly in the Middle East – at 15 out of the 68 companies from the region. While the small local sample has its limitations, the Middle East lagged the 26 percent rate in Europe, and the more than one third of almost 900 large North American companies which have moved to install a CDO. Almost half of the world’s CDOs were appointed between 2019 and 2020.
However, beyond regional and cultural trends and variations, the most telling factors for the existence of a CDO were size and sector. In generating and consuming more data, larger organisations were more likely to have appointed a CDO than smaller ones, with the tipping point appearing to sit at 10,000-plus employers and more than $5 billion in annual sales. Close to half of the businesses with over 200,000 employees had a data chief.
There is also a marked concentration of CDOs in a handful of industries, notably those that rely on numbers and have a heavy and consistent stream of consumer inputs. Companies in the insurance, banking, and media & entertainment sectors all had a CDO rate of 40 percent or greater, with insurance stretching out to 46 percent. Retail and technology followed, while metals & mining, electronics, and chemicals sat at the other end of the spectrum at under one in ten.
Citing advantages to the boardroom such as engagement with the CEO and high-level awareness of and attention to data strategy and management, as well as in driving employee upskilling and other wider business initiatives, Strategy& believes the commonality of the CDO will continue to grow.
While the impact of Covid-19 on sentiment remains unknown, the consultancy estimates that on recent trends almost half of the world’s largest companies will have a Chief Data Officer by 2025.
