The importance of the Chief Data Officer is increasing, according to a new report from the EDM Council. The trade association’s 2023 Global Data Management Benchmark Report explores the growth of data management as a formal discipline and how CDOs are now taking what the authors call a strategic seat at the executive table.
Key findings include how 65% of surveyed firms reported having a formally appointed CDO, up from 60% in 2020. Additionally, 86% of finance industry CDOs now report to the C-Suite, increasing from 72% in 2020. In non-financial markets, 80% of data executives report to the C-Suite, with 20% reporting directly to the CEO.
“Today’s data executives are significantly more senior than their counterparts 10 years ago, and the scope of their responsibilities has expanded considerably. In every industry, data executives are taking on a much greater strategic role as they help to define not only their firm’s data management vision but their analytics, AI/ML, ESG, and sustainability data direction, as well,” the report states.
The responsibilities of the CDO are growing, as are data governance initiatives. The report showed that 80% of respondents have data governance programs in progress or already established. The EDM Council says this focus on data governance is a key strategic initiative given how data professionals are taking on more responsibilities regarding data privacy and the ethical use of data.
The report also mentions a concerning idea raised during the authors’ research that data governance equals data management: “Data management is a comprehensive collection of data capabilities, of which data governance is one. Leading with data governance and potentially neglecting other key practices, such as defining the business case, demonstrating the value proposition, and/or ensuring the organization structure and funding are defined, can lead to unsuccessful data program outcomes,” the report says.
Another aspect of current data management trends is how organizations are increasingly including analytics under the data management umbrella, a practice that the report says is evident in the rise of the Chief Data and Analytics Officer. According to 30% of respondents, the executive responsible for the analytics program is also in charge of data management.
Changing corporate culture to embrace data-driven processes is cited as a challenge for new CDOs, and turnover for CDOs is high, with 64% of CDOs reporting occupying their role for less than three years. When asked how long their current CDO had been in the role, 41% of those surveyed said one to three years, and only 15% said their CDO had been with their company for more than five years. The EDM Council notes that this could suggest organizations need to orient themselves toward a data-driven culture led by the CDO, stating that a data-driven culture starts at the top: “Senior executives must establish a data mindset across the firm, emphasizing the importance of a sound data management discipline. Getting the most out of data means investing in the programs that support it and the people who are tasked with using it to ensure strong data awareness and literacy.”
The benchmark report, now in its fourth edition, saw a three-fold increase in overall participation with 58% of responses coming from non-financial companies, a 27% increase over the 2020 survey. The report uses the DCAM framework, or Data management Capability Assessment Model, to outline best practices for data programs.
“In my 30-plus years as a data executive, the scope of responsibilities has expanded considerably, but especially so in the last few years,” said EDM Council President John Bottega. “This year’s Benchmark Report shows Data Executives, and the data management function as a whole, taking on a much greater strategic role as they help to define not only their firm’s data management vision but also their analytics, AI/ML, ESG, and sustainability data direction.”
Access the 2023 Global Data Management Benchmark Report here.