The chief data officer is on the rise. The number of CDOs appointed by major organisations rose from 400 in 2014 to 1,000 in 2015, according to Gartner. By 2019, 90 per cent will have a CDO, the analyst says.
Their rapid emergence raises important questions about the role and position of the CDO in organisations. More pressingly it raises serious queries about the role of one particular executive already supposed to be lord of things technical: the CIO.
While some might struggle to define the exact role of their newly appointed CDO, others are even more bewildered by the need for a CIO. Chief executives busy appointing digital executives are just as likely to query their need for an IT director.
From the outside looking in, it looks like a very pertinent question. After all, the CIO should be established as the go-to person for all IT initiatives in the business. The appointment of CDOs suggests tech leaders have failed to grasp the nettle. One explanation comes from a closer look at the evolution of the CIO role.
In comparison to its c-suite equivalents, the IT leadership position is very much a nascent position. While mature posts such as the CEO and CFO are the established executive bedrock of modern enterprises, the CIO role was only first defined in the early 1980s.
The past 35 years have been a story of slow maturity for the IT leader. Some CIOs have established an industry-wide reputation as change agents. Take Filippo Passerini, the recently retired CIO of Procter & Gamble, who rose through the ranks to lead a billion-dollar IT-led transformation of the consumer giant.
Passerini is far from alone. Many other IT chiefs continue to run successful technology organisations. However, internal competence is no guarantee of broader acceptance. The CIO still suffers from an image problem. Sales, finance and operations executives regularly assume the CEO position, but the promotion of CIOs to the upper echelons of blue-chip organisations is rare.
Former CIO Philip Clarke's promotion to the top job at Tesco's in 2011 was hailed as a breakthrough moment for IT directors. But Clarke was replaced as CEO in July 2014 following the retailer's poor performance. The failure of other CIOs to assume the top role suggests many executives believe IT professionals cannot be trusted to venture beyond bits and bytes and into pence and pounds.
The rise of the CDO role is simply the latest, and perhaps greatest, example of CIOs not being taken seriously. The increased prevalence of digital and data should, in fact, be good news for senior IT leaders. These individuals have years of experience implementing systems and services on behalf of the business. Yet many firms are choosing to go to the market and hire a dedicated CDO.
In many ways, says former CIO turned digital advisor Ian Cohen, IT leaders only have themselves to blame. Organisations in the digital age need someone who does more than the role of a traditional IT director. However, too many technology chiefs have failed to move beyond simple system stewardship.
"The inadequacy of certain CIOs means the door has been left ajar," says Cohen.
"The CDO role exists in places where the CIO is seen as just the back office IT guy. If your business has hired a CDO, perhaps you have to ask yourself why."
Yet there is hope. The very best CIOs are genuine change agents with the capacity to shape and lead their firms' digital transformations. These executives get out and about in the startup community, they experiment and learn, and they talk with clarity about the transformative power of technology.
Take John Lewis Partnership CIO Paul Coby, a former political speechwriter who now uses creative IT to solve business challenges. He embraces innovation through his firm's internal JLAB programme, which boosts the company's understanding and deployment of customer services at a relatively low cost.
Another example of an outwardly engaged IT leader is Mark Foulsham, group CIO of insurance firm esure. Foulsham has spent his time in situ adopting leadership of non-technology functions, such as operations, financial crime and facilities management. He runs cross-departmental hackathon programmes to encourage staff across the business to explore the potential benefits of digital IT.
Some CIOs, then, have proven their capabilities to the business and continue to use technology to help their businesses grow. What such examples prove is that data and digital does not have to be the sole preserve of the CDO. If you are a forward-thinking CIO, you – rather than a new, executive upstart – can be the lightning rod for change.
More interestingly still, perhaps, Cohen questions whether CDOs have the long-term staying power of CIOs. Cohen says many companies see CDOs as catalysts. He points to the chemical definition of a catalyst – an accelerant that drives a reaction between elements but is short-term in nature. In business terms, the CDO might do similar; he or she could finish the job and simply move on.
On the other hand, great IT chiefs – like those mentioned above – have experience in leading technology-enabled business change time and time again. Organisations that are lucky enough to have a change agent CIO might already have the catalyst-like characteristics they require from a CDO.
What most businesses still require, agrees Natalie Whittlesey, director at recruitment specialist Harvey Nash, are CIOs who truly understand the importance of digital and data. The figures might confirm the CDO position is in demand, but the role is still emerging and there is hardly a surfeit of suitably qualified candidates.
As Gartner recognises, the CDO position encompasses a broad remit, including data governance, decision-making and the creation of business value. Some of those characteristics might not chime with an individual identified as a potential CDO. The good news is that – in many cases – smart, up-and-coming IT professionals can help to fill the gap.
New, digitally engaged executives might understand the power of marketing and data, but great IT leaders know all about the power of strategy and governance. In many cases, what the business really needs is a new class of business-savvy IT professionals.
The CDO might well be on the rise, but there's life in the old CIO yet. ®