Hannon says he's already seeing results from integrating Edmunds' analytics teams into the centralized Analytics and Insights group, which serves in a consulting role for internal customers. "It's becoming more of a partnership rather than a job shop," he explains. "We're moving from using data for insights to using data for action."
For example, an analysis of vehicle sales and dealership data, combined with advanced forecasting techniques, persuaded Edmunds' management team to make changes to its dealer recruitment program. Combining and analyzing a mix of clickstream and transaction data wouldn't have been likely in the previous decentralized structure, Hannon says.
"It's a much more sophisticated model now for the sales team," he says. "I don't think they would have pieced all of those data sets together on their own."
Adding a strategic layer
Many organizations are investing enough money in big data projects to justify the creation of a CAO role. IDC predicts that the market for big data technology and services will grow at a 27% clip annually through 2017 -- about six times faster than the overall IT market. With the building blocks in place, many organizations are looking to scale their analytical approach to drive more value across the business.
Catamaran, a provider of pharmacy benefits management services, has made a significant investment in analytics capabilities. Senior leaders knew there was a lot of intrinsic value in the clinical and patient data the company was collecting, but they weren't sure how best to utilize it to improve its services and create a better consumer experience. In May 2013, Catamaran hired Andrea Marks as its first CAO. Marks, previously a chief informatics executive at Blue Health Intelligence, has an extensive background in analytics in the healthcare industry.
"When I joined, we had a lot of analytically sound rules engines that we embedded into our clinical products and services," says Marks. "We had some good reporting tools. It was really about taking it to the next level -- how do we build on this to drive improved outcomes and cost efficiencies across the system."
Marks touches on two key elements of a CAO's mandate: improving operations and identifying future growth opportunities. The former provides an opportunity for some quick wins that can justify additional investment in analytics; the latter is a longer-term play that most CAOs believe holds the highest potential for driving real value across the business.
"You always want to be operationally efficient, and [analytics] can provide tangible benefits there," elaborates RHT's Reed. "But [using analytics] to create more for the bottom line is where you'll see the focus going forward."
Using analytics to drive revenue
At Dovetail Health, hiring a CAO signaled the company's desire to think more strategically about the data it was collecting through its medication management solutions. "The data they are collecting in patients' homes is very unique and extremely credible," says David Veroff, Dovetail's most recent CAO (at press time, Veroff had accepted an offer to become SVP of analytics at Silverlink Communications). "This was a rich asset they hadn't leveraged as much as they'd like to."
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