The C-suite may need a bigger boardroom. As organizations expand their executive teams with new C-level titles that underscore their digital transformations in-progress, the role of chief analytics officer is gaining traction.
Driven by organizations' desire to turn big data into a strategic asset, the CAO is finding a home in data-rich industries such as financial services and healthcare. Although still not as prevalent as two other newish C-suite roles -- the chief digital officer and chief data officer -- the CAO may represent an inflection point in an organization's digital journey, signaling a move from managing data to applying it more strategically across the business.
The CAO role "is certainly not in the mainstream yet, but momentum is building," says John Reed, senior executive director at staffing firm Robert Half Technology (RHT). "The pioneers see the power in data and the power in harnessing that data for competitive advantage."
Not every organization hiring a CAO is a digital pioneer, but many have matured to the point where they need to take a more strategic approach to analytics. Often, these businesses have deployed pockets of analysts and data scientists across the organization -- in marketing, IT, operations or finance -- but they aren't yet harnessing the collective wisdom or economies of scale. These companies are the prime candidates for a CAO.
"When you start thinking about how to organize your analytics better and how to get more bang for the buck, you'd better be thinking about hiring a chief analytics officer," says Bill Franks, CAO at data-services firm Teradata. "You can't take analytics where you want to without someone who's accountable for those strategic decisions."
There's plenty of upside in adopting a more strategic approach to big data. In a recent study by management consultancy EY, for example, 69% of companies said customer experience was vital to their growth strategies, but just 12% said they take full advantage of analytics to extract customer insights and deliver better customer service.
"We've seen many firms mature into a need for leadership," says Jack Phillips, CEO of the International Institute for Analytics, a research and advisory firm. "They reach a point where senior leadership says that this is so important to us from a competitive standpoint that it's time to dedicate investment and create a standalone, centralized [analytics] function."
From insights to action
Edmunds.com, the consumer auto website, reached just such a point last year, with a half-dozen analytics teams reporting into different parts of the organization. In January 2014, the company promoted its head of software architecture, Paddy Hannon, to CAO.
"We had all of these analytics groups that were spread out," says Hannon. "There was a lot of duplicative work going on, and there was no cohesive strategy for how we were going to move forward. The best solution was to merge the groups into one unit."
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