Data analytics—and the people who make it happen—has emerged as the centerpiece of enterprises as they advance through the turbulent months ahead. Many of these efforts are gelling around the formation of dedicated C-level leaders, such as chief data officers and chief data analytics officers (CDOs and CDAOs, respectively).
That’s the word from Wavestone NewVantage Partners, based on its latest annual survey of senior data and analytics executives. “Investments in data are growing and remain strong, even with potential economic headwinds,” the study’s authors, Tom Davenport and Randy Bean, pointed out. Organizations continue to invest in data, with 88% reporting increases in data investments during 2022, they observed.
Most prominent are activities such as data modernization, which was identified as the top data and analytics investment focus by 82% of organizations.
In the year ahead, 94% of organizations “are planning to increase their investments in data in the wake of potential economic uncertainty, reflecting the continued perception that data is an essential business asset to organizations.” Investment in data mesh, data fabrics, and data literacy were less universal, the study also showed.
In addition, many organizations now have CDOs or CDAOs overseeing their data-driven opportunities. Currently, 83% of organizations report having appointed a CDO/CDAO, up from 12% in the first survey conducted in 2012. However, CDO turnover is high, with average tenures only in the 20–24-month range.
Data leaders’ roles “are evolving and maturing as organizations strive to deliver business value from their data investments,” the study’s authors noted. Analytics is now a part of the CDO and CDAO role at 69% of organizations. At 48% of organizations, the primary mandate of the CDO or CDAO is to “develop the corporate data strategy.”
A sizeable segment of these data leaders, 43%, report to the president, CEO, or COO of their organizations. A majority, 56%, report to a business rather than technology function, with just 27% still reporting to the CIO. “This reflects a significant shift in how the role is perceived, and a commitment to ensuring the delivery of business value from the CDO/CDAO role,” the study’s authors concluded.
These data and analytics leaders report that they are delivering business value from their data and analytics investments, the study shows. At least 92% state that their firms had delivered measurable business value from their investments, up dramatically from 5 years ago, when only 48% reported seeing measurable returns. Ninety-eight percent of data leaders also expect that their firms will see a return on their investments in 2023.
Still, this optimism is tempered by difficulties in achieving a data-driven culture. Less than half of organizations report that they are currently competing on analytics—just 41% manage data as a business asset. Plus, only 40% could say they have created a data-driven organization; only 21% say they have established a data culture.
“Becoming data-driven is a long-term journey, and organizations continue to struggle to make substantive progress toward achieving this outcome,” according to Davenport and Bean. “This underscores the challenges that large, complex organizations continue to face when it comes to taking full advantage of data and analytics capabilities. Every year in recent surveys, the great majority of respondents report that the principal challenges to becoming a data-driven organization are human— culture, people, process, or organization—rather than technological. And they make little progress toward that goal.”