What is a chief data officer? A leader who creates business value from data

29 Feb 202410 mins
CareersIT LeadershipStaff Management

A chief data officer (CDO) oversees a range of data-related functions to ensure your organization gets the most out of, arguably, its most valuable asset.

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The chief data officer (CDO) is a senior executive responsible for the utilization and governance of data across the organization. While the chief data officer title is often shortened to CDO, the role shouldn’t be confused with chief digital officer, which is also frequently referred to as CDO.

“The chief data officer is the senior person, with a business focus, who understands the strategy and direction of the business, but their focus is on how to underpin that with data,” says Caroline Carruthers, director at consulting firm Carruthers and Jackson, former chief data officer of Network Rail, and co-author of The Chief Data Officer’s Playbook and Data-Driven Business Transformation: How to Disrupt, Innovate and Stay Ahead of the Competition.

Capital One appointed the first CDO in 2002 and only a few organizations followed suit in the decade that followed. But the appointment of CDOs has accelerated in the past few years.

Chief data officer salary

According to compensation analysis from Payscale, the median CDO salary is $168,679 per year, with total pay, including bonuses and profit share, ranging from $103,000 to $290,000 annually.

Chief data officer job description

CDOs oversee a range of data-related functions that may include data management, ensuring data quality, and creating data strategy. They may also be responsible for data analytics and business intelligence — the process of drawing valuable insights from data. Or some data management functions may fall to IT, and analytics may belong to a chief analytics officer, a title some say is interchangeable with chief data officer.

Although some CIOs and CTOs find CDOs encroach on their turf, Carruthers says the boundaries are distinct. CDOs are responsible for areas such as data quality, data governance, master data management, information strategy, data science, and business analytics, while CIOs and CTOs manage and implement information and computer technologies, and manage technical operations, respectively.

“The difference between the CDO and CIO in my mind is quite clear, and I often use the bucket and water analogy,” Carruthers says. “The chief information officer is responsible for the bucket, making sure it’s the right size, that there are no holes in it, it’s safe, and in the right place. The chief data officer is responsible for the fluid that goes in the bucket and comes out; that it goes to the right place, and that it’s the right quality and right fluid to start with. Neither the bucket nor the water work without each other.”

More than half of the respondents to CDO Agenda 2024: Navigating Data and Generative AI Frontiers, a joint survey by AWS and MIT, said their focus was delivering a “small set of analytics or AI projects” as a value creation approach. Almost half said they instituted data literacy training, and have organized data, analytics, or AI councils. Improving data management, including improving data infrastructure, is also a focus, but CDOs say they deliver these improvements in the context of analytics and AI use cases, not as separate initiatives.

Chief data officer responsibilities

According to Gartner, the CDO is responsible for a firm’s enterprise-wide data and information strategy, governance, control, policy development, and effective exploitation.

Initially, the CDO role focused on compliance and data governance, and 52% of CDOs say ensuring data security remains their most critical responsibility, according data gathered by the IBM Institute for Business Value and Oxford Economics for IBM’s 2023 study, Turning data into value: How top Chief Data Officers deliver outsize results while spending less. But today’s CDO is also focused on using data to drive business outcomes.

According to IDC, chief data officer responsibilities include:

  • Governance: Advising on, monitoring, and governing enterprise data
  • Operations: Enabling data usability, availability, and efficiency
  • Innovation: Driving enterprise digital transformation, cost reduction, and revenue generation
  • Analytics: Supporting analytics and reporting on products, customers, operations, and markets

61% of CDOs in Deloitte’s Chief Data Officer survey 2023 said their top priority over the coming year was creating, updating, or implementing their data strategy, which coincides with the AWS/MIT study where just over 60% of respondents said they devote their attention to enabling new business initiatives based on data, analytics, and AI. Around 69% of respondents in Deloitte’s survey said they want to spend more time providing leadership for data activities, and less on assessing and designing data technology platforms.

However, many CDOs feel their responsibilities are poorly understood. The AWS/MIT survey found nearly 73% of CDOs feel their role is less understood than other C-level positions in their organizations. The survey also suggests the lack of a standard list of responsibilities may be a contributing factor.

According to the AWS/MIT study, it also says some of the most common CDO responsibilities include:

  • Improving data quality
  • Establishing clear and effective data governance
  • Having clear initiatives regarding analytics, AI ethics, cybersecurity, generative AI, and data monetization
  • Building and maintaining capabilities regarding advanced analytics, business intelligence, AI, data security, and privacy controls
  • Managing and improving the data infrastructure
  • Data monetization initiatives
  • Cybersecurity

Chief data officer jobs

An online sampling of posted chief data officer job descriptions across a range of industries shows key areas of responsibilities such as: evangelizing and communicating a data vision a critical part of growth strategy; creating strategic data access policies; leading the design of analytics infrastructure; developing and executing a central data strategy to drive revenue; overseeing data governance, data investment and partnerships; and strategizing with C-level colleagues. Attributes companies are looking for in a CDO include highly motivated, experienced innovators who have produced tangible results, as well as those with senior-level leadership who have overseen data and/or analytics departments for seven or more years.

Chief data officer resume

Landing a job as highly specialized as a CDO requires a strong résumé. For tips from experts on how to write the ideal résumé for chief data officer positions, see “CDO resumes: 4 tips for landing a chief data officer role.”

CDO vs. chief analytics officer

Chief data officers manage data while chief analytics officers lead data analytics. Even though chief data officer and chief analytics officer are two distinct roles, they should both reside in the same person, argues Guy Gomis, partner at the recruiting company BrainWorks.

“I’m finding the best in class are combining the two,” he says. “Most leaders in analytics want to own the data strategy and how the company treats data, and they want to own analytics.” It makes sense if you think about it: analytics is how data provides value, so that’s an essential function. At the same time, you need a good data strategy and good data management, or you won’t get quality data to analyze. Thus, Gomis says, “Best practice is having a chief data strategy and analytics officer who owns both data and analytics, and works closely with the CIO.”

To whom should the chief data officer report?

CDOs are still finding their place in many organizations. CIO’s State of the CIO Study 2024 found that 24% of CDOs report to the CEO, 12% to the CFO or top finance executive, and 14% to another line-of-business executive. According to the AWS/MIT survey, almost 20% of CDOs currently report to the CEO or chairman, over 19% to the CIO, CTO, or some other C-level executive that reports to the CEO, and just about 16% report to a non-C-level executive.

While organizations are rapidly adopting the chief data officer role, NewVantage Partners says there’s still a lot of confusion and disagreement on the mandate and importance of the position. Its Data and AI Leadership Executive Survey 2022 found that 52% of participants identified the chief data officer as the executive with primary responsibility for data strategy and results. In 2022, 48% of respondents said other C-level executives had primary responsibility or claimed there was no single point of accountability.

PwC’s global strategy consultancy, Strategy&, believes the CDO role should sit at the C-suite level or one level below because, “appointing a senior-level CDO is essential for leadership teams seeking to maximize the potential of data as a strategic asset throughout the organization.”

Carruthers agrees. She says the chief data officer could report to various places in the organization, but she favors the CEO or COO, not the CIO.

“As the role evolves and matures, it’s reporting into other places in the business,” she says. “It’s moving toward more of a seat at the top table, which it should be. For me, the CIO and the CDO should work hand-in-hand as a partnership, and a partnership doesn’t work when one partner works for the other partner.”

What to look for in a chief data officer

According to the NewVantage Partners’ survey, 51% of executives at Fortune 1000 firms feel a successful chief data officer must be an external change agent with fresh perspectives. Meanwhile, 14% held the opposite view: they felt a successful chief data officer must be a company veteran who understands the culture and history of the organization. Respondents were also split on the chief data officer’s background: 10% believed a successful chief data officer should be filled by a line-of-business executive who’s been accountable for financial results, while 19% said the CDO must have a data scientist or technologist background.

Gomis says he’s seen chief data officers come from marketing backgrounds, and that some are MBAs who’ve never worked in data analytics before. “Most of them have failed, but the companies that hired them felt that the influencer skillset was more important than the data analytics skillset,” he says.

Good people skills certainly could be useful for getting out of the bind many new chief data officers find themselves in. “One of the biggest mistakes is not understanding what it’ll take to succeed, in terms of expectations,” Gomis adds. “If you look at a lot of the people who’ve had the title of chief data officer and chief analytics officer over the last three years, there’s a tremendous amount of turnover because company and candidate expectations weren’t aligned.”

The problem is often unrealistic expectations from an employer. “The biggest mistake companies make is to expect that because they’ve hired someone, the problem is solved,” says Justin Cerilli, who heads the data and analytics practice for consultancy Russell Reynolds Associates. “Actually, you’re just starting to solve the problem — the tough decisions are still to come. That’s when you start asking who your people are, what your processes are, and how to change culture. CEOs tell chief data officers to change everything to get the end results they want, but don’t want to change the way they do anything.”