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A New Survey Finds Increasing Business Impact Of Data And AI Executives

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Data is eating the world. Or as Tom Davenport and Randy Bean write in their forward to a just-published survey, “Data, and the ability to make sense of it, has been one of the greatest drivers of innovation in both business and society in recent decades, and a primary driver of economic success in the 21st century.”

The 11th annual survey of Chief Data Officers (CDOs) and Chief Data and Analytics Officers (CDAOs), conducted by NewVantage Partners, A Wavestone Company, collected data from 116 Fortune 1000 companies and large organizations, with 84.6% of survey respondents holding the Chief Data or Chief Data and Analytics Officer title. This figure is up 10% from last year’s survey and nearly 20% in five years, reflecting the continued growth and adoption of the CDO/CDAO role across organizations and industries. When the survey was first conducted in 2012, only 12% of the organizations surveyed had appointed a CDO/CDAO.

Here are some of the key findings:

43.3% of CDO/CDAOs report to the President/CEO or COO, 55.6% report to a business rather than technology function, and 27.4% still report to the CIO (as most early CDOs did).

The primary mandate of the CDO/CDAO is to develop the corporate data strategy at 48.1% of organizations.

Only 35.5% say that the CDO/CDAO role is successful and well-established, a 11.6% decline in organizational satisfaction from last year.

For 61.8% of respondents, responsibilities have shifted from “defensive” activities, such as compliance and regulatory reporting, to “offensive,” including revenue growth, business expansion, and customer acquisition. 69.4% report that analytics is now part of the CDO/CDAO mandate.

87.8% reported increases in data investments during 2022, and 93.9% of organizations are planning to increase their investments in data in 2023.

Data modernization—transferring data from outdated or siloed legacy environments to cloud-based environments—was identified as the top data and analytics investment focus by 40.7% of organizations. 82% of organizations are planning to increase their investments in data modernization in 2023. Investment in data products and AI/ML were also indicated to be a priority.

Only 23.9% of organizations characterize themselves as data-driven, and only 20.6% say that they have developed a data culture within their organizations.

79.8% continue to cite cultural issues such as organizational receptivity to change and business transformation, changes to organizational processes, people and skills, organizational alignment, and communications, as the greatest obstacles to realizing business value from investments in data.

Only 23.8% report they are doing enough to ensure responsible and ethical use of data within their organizations and their industry.

Davenport and Bean conclude: “The survey and our own observations indicate that data consumption has become much more of a focus in recent years, and that companies are using analytics and AI to deliver value from data. It’s clear that data is driving substantial amounts of business innovation.”

Indeed, data creation, movement, and consumption has become a dominant part of our lives at work and outside of work.

Modern computing begat data, the digital product of processing zeros and ones. At first, used to tackle scientific questions and assist with enterprise accounting, the major obstacle for getting value from data was speed. Overcoming data latency or “how fast can we get the data?” became one of the major preoccupation of executives in charge of “data processing” and the few business leaders that perceived the computer as a business tool.

In the 1970s, increasing numbers of business executives started to understand that the growing number of computers in their organizations meant that now they have an army of perennial observers, collecting data 24/7. “How to make sense of the data?” became the new question for business executives and a new focus of activity for the executives in charge of computers, now called Chief Information Officers (yes, for a few decades, “information” sounded more prestigious than “data”).

Enterprises stopped deleting data, instead storing it for longer periods of time, and started sharing it among different business functions and with their suppliers and customers. I recall a DEC executive talking around 1990 to a group of insurance industry CIOs, selling them the slogan “one and done!” (in addition to telling them that a third of them are going to lose their job that year, as the tenure of CIOs was notoriously short).

What he meant by that was that customers calling their insurance companies should get an answer to all their questions, rather than being transferred from one customer service agent who had the data related to their auto policy to another who could access the data related to their home policy. What he meant by that was that they should buy the hardware and software that will let them move the data from different functions and locations into a centralized database.

Data replication and movement led to the data explosion and corresponding investment in “data mining” in the 1970s and 1980s. But the 1990s brought the invention of the Web and with it the first companies “born digital,” and the expansion of “computing” to anyone in the world with an internet connection (and after 2007, to anyone with a smart phone).

Having been living the online life since they were born, meant that the new companies not only excelled in hardware and software development (and built their own “clouds”), but also successfully implemented innovations in the collection and analysis of the mountains of data produced by the online activities of millions of individuals and enterprises.

Having a multitude of new, easy-to-use online applications, billions of people around the world could now participate in the creation, movement, and consumption of data.

Data has taken over from hardware and software as the center of everything “computing,” a constant presence in the lives of consumers, and the lifeblood of tech companies. And as the Data and AI executive survey has demonstrated for the last eleven years, the lifeblood of any type of business.

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