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Career spotlight: Chief data officer

July 7, 2017

Chief data officer (CDO) is a relatively new role within the C-suite. While not as well-known a title as CEO, CFO or even CTO, the CDO has gradually become a prominent position within many board rooms, as they grapple with the challenges of managing and creating value from large quantities of company data.

According to a late 2016 IBM report, 2.5 quintillion bytes of data are created every day, and 90 percent of all data in the world has been generated since 2014. Having a clear strategy for managing information at such scale is now essential, especially as organizations become more reliant on data-intensive cloud-based infrastructures and applications.

What does a CDO do?

In this context, small- and medium-sized businesses, as well as larger enterprises, have sought to better understand the specific data they generate and, ideally, find ways to leverage it for a strategic advantage. Essential tasks that might fall under the responsibilities of a CDO include:

  • Identifying the benefits to the firm of particular types of data (e.g., customer interactions, sales histories, etc.).
  • Treating and managing these informational assets as parts of the overall corporate balance sheet, i.e. as well-cataloged, inventoried and defined items.
  • Capitalizing on opportunities found via data analysis, such as targeting a specific age group or income level in a product marketing campaign.
  • Managing the risks associated with data retention and ensuring compliance with applicable rules and regulations.
  • Working with business intelligence solutions such as Microsoft Power BI, Birst, Yellowfin and others to display data in interactive formats and gain valuable insights.
  • Serving as a bridge between the IT department and the other segments of an organization, ensuring that the right data analysis tools are available to everyone.

Overall, a CDO oversees the technical and procedural aspects of data management. IT research firm Gartner estimated that the number of CDO positions at large organizations more than doubled between 2014 and 2015, and that 90 percent of large enterprises would have a CDO in place by 2019.

CDO versus CIO: What’s the difference?

A common point of confusion about the CDO role is the extent to which it is distinct from the similar title of chief information officer (CIO). The latter title has a longer history, having come to the forefront during the 1980s and 1990s as personal computers became fixtures of the modern workplace.

A CIO is a more technical position that is mostly restricted to the operations of the IT department. Responsibilities might include project management, executive oversight of security and networking services and building relationships with specific service providers (e.g., a telecom or a software vendor).

In contrast, a CDO is more attuned to general business strategy than to such granular technical tasks. A CDO might go further than a CIO in realms such as working with a chief marketing officer, preparing reports and participating in financial planning.

The CDO title is in some respects an evolution of its CIO predecessor, designed to extend the reach of data management to all departments in the organization, without dwelling only on IT-related issues. Even when a CDO does perform technical work, it is likely strictly concerned with data integration instead of the underlying details – such as networking and storage – that would be more within a CIO’s wheelhouse.

Mechanical engineering students before a class.
A CDO holds a meeting with other company executives.

As we might expect for a C-level position, a typical CDO receives a salary far higher than the national average. Data from PayScale indicates that the range is between approximately $124,000 and $259,000, with a median of $178,240 and the possibility for much more compensation in the form of bonuses and profit sharing. All told, a CDO can make upwards of $378,897 in total yearly pay.

The Gartner research cited earlier predicted strong growth in CDO positions for the rest of the decade. However, unlike older C-level positions such as CEO, CDO is not an available job title at every organization. It is much more common in some industries than others:

  • Organizations in highly regulated fields such as healthcare and finance are the most likely to have CDOs on staff, primarily to deal with legal requirements, such as the Health Insurance Portability and Accountability Act and the Sarbanes-Oxley Act, about data retention and transmission.
  • Technology startups are also common homes for CDOs, since many of these companies work on data analytics and are dependent upon tools built for big data platforms like Hadoop. A CDO might take the lead there by hiring data scientists and working closely with a CIO.
  • The faster an organization’s revenue growth, the more likely it is to have a CDO on board. A survey by Forrester Research found that companies with at least 10 percent annual growth were 65 more likely to hire a CDO than ones with growth of 4 percent or less.
  • At older firms with a lot of legacy tech (i.e., hardware and software that predate the era of cloud computing), a CDO might be brought on to clean up and integrate “broken” data that had previously been impossible to index, search or integrate with other applications.

There are numerous opportunities for CDOs at organizations of all stripes. It is important to remember that the responsibilities of a CDO may also be incorporated into, or shared with, other positions such as CIO, or distributed across a company without anyone actually holding the title of CDO. The latter situation is common in organizations that have flat hierarchies or follow the principles of holacracy (self-management).

Becoming a CDO

Most CDOs have significant experience – more than 5 years, according to PayScale – in related jobs. In addition to such career expertise, CDOs may also have degrees in subjects such as computer science or engineering.

An advanced degree in a field like electrical or mechanical engineering can broaden your knowledge, open up career opportunities and boost your earning potential as a CDO. Learn more about the Masters of Engineering – Data Sciences from University of California, Riverside by visiting our engineering program page today.

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