The Chief Data Officer: An executive whose time has come

I often ask people whether they know what Netflix, Harrah’s, Amazon and Wal-Mart have in common? The answer is pretty simple. They use data analytics to leave their competitors in the dust. Many other businesses are trying to do the same, spending millions of dollars on data software.

It takes more than a steep investment, however, to squeeze business value out of data. Companies have to establish an entire system to use data to drive competitive advantage. I believe that the head of this system should be the Chief Data Officer (CDO), an executive whose time to shine has finally come. The sooner businesses can empower a CDO, the sooner they can turn data into a business weapon to achieve business success similar to the aforementioned companies.

The data imperative

You simply can’t run fast in modern business if you’re not using data effectively. From logistics to gambling, every industry is being transformed by data. The first organizations to capture the benefits of data can leapfrog industry pecking orders and establish leadership.

Take Harrah’s (now Caesar’s Entertainment). Formerly considered by many to be a second-tier riverboat casino, Harrah’s used data to create a massive disruption the gambling industry. A former professor of mine, Gary Loveman, decided to introduce loyalty cards to Harrah’s in 1997. As customers accumulated credits and rewards for gambling, Harrah’s studied their habits and behaviors in order to individualize marketing efforts. The casino cultivated a loyal following and grew into one of America’s leading gaming destinations. I believe that any company can harness similar powers, if they build a system to derive value from their data.

Shutterstock/Dan Kosmayer

Shutterstock/Dan Kosmayer

Data is within everyone’s reach

Today, a data infrastructure like Harrah’s no longer costs $20 million to $50 million to get up and running. Even small-to-medium-sized companies can afford many of the data features formerly limited to large organizations, thanks to a dramatic lowering in cost of compute and storage. It is the evolution of a new era of business intelligence.

There’s a difference, however, between acquiring data and harnessing it for the business. Rather than establishing systems to turn data into business value, most companies make the mistake of diluting it across departments, none of which are incentivized to handle data. CIOs have the technical know-how to find the systems to automate data, but they have their hands full keeping existing IT infrastructure healthy. Sales- and marketing executives often go around the IT organization to procure tools, yet few are trained to think strategically about data assets. Data becomes more of a subset of someone’s focus or core responsibilities, sometimes even a source of vanity metrics rather than a driver of business success, which is where the real call to action within today’s data-intensive organizations exists.

Introducing the Chief Data Officer

The only way to turn data into business power is to systemize it. Data has reached critical mass within the organization, and it’s time to establish a strategic head, in the form of the CDO.


This is a natural evolution. When IT reached critical mass 20 years ago, after businesspeople had invested in mainframes and technology grew out of control, the CIO was established. A decade ago, advertising, marketing and PR began to converge within companies, bringing forth the need for a strategic head of marketing, the CMO.

Now data is everywhere, and few people within the organization know how to gain value from it. A new kind of informal “data person” is already filling the gap. Generally a young, motivated businessperson, this data steward volunteers to create an infrastructure for data and answer strategic business questions for others.

It is in the best interest of organizations to enable the “data person” to succeed. Otherwise, this potential leader is stuck fighting stakeholders and building data systems that never get adopted. Data in the company, moreover, remains fallow, because it lacks a dedicated team.

Waste time, waste data

Systemizing the CDO role unleashes the true potential of data within the business. Rather than focusing exclusively on the decisions that must be made, such as how to scale infrastructure, the CDO can identify the decisions that can be made, then work backwards with data assets in order to drive action. For example, if a company wants to increase monthly revenue, the CDO can use data to identify whether expanding the range of services, targeting a new market, raising prices or refining existing services is the best option. Data becomes not a source of confusion, but an ally to the entire organization.

The guidance of a CDO is exactly what companies need in order to become comfortable in the world of data. The role will inevitably permeate the organization, whether leaders establish it now or later.

It’s time. Make the best use of your data—and turn to the Chief Data Officers who know how to harness it.

Brad Peters is the CEO and cofounder of Birst.