CIOs and CDOs: A vital partnership for data value

DCCU has deployed analytics in its mobile banking app that required the company’s data scientists to develop alongside its systems architects, to ensure a cohesive architecture, Rayburn says.

Another area where CDOs and CIOs can work together is DataOps, a set of practices that combine an integrated and process-oriented perspective on data with automation and methods from agile software engineering to improve quality and speed and to promote a culture of continuous improvement in the area of data analytics.

“DataOps allows for the application of the DevOps methodology to ongoing deployment and maintenance of data or data analytics-intensive applications,” Rayburn says. “By adding data specialists to operational processes typically handled by IT, DataOps ensures the much-needed collaboration and integration between IT and data teams happens with the objective of seamless orchestration of data, tools, code, and environments.”

DCCU uses DataOps for its mobile apps to improve time to market for some of its customer-facing analytics products, through continuous delivery. “A data scientist works hand-in-hand with IT to test and implement analytics iterations in sandboxes for quick and continuous deployment of models,” Rayburn says.

When CDOs and CIOs work together, “joint strategizing, planning, developing, and coordinating will ensure an efficient division of labor that eliminates data silos and accelerates digital transformation,” Rayburn says.

Avoiding friction

Given that there will likely be overlap among the CIO and CDO responsibilities in some areas, there’s bound to be friction.

“Data is generated by or consumed by the applications that enable the business,” says Marcus Murph, leader of CIO advisory at consulting firm KPMG. “This creates a natural friction between the CIO and CDO, as choices about data architecture, data governance, tools — and their costs — can conflict with broader IT operating model preferences.”

In addition, data must be secured, and this creates potential conflicts between data solutions and cybersecurity standards typically established by the CISO, Murph says. This can also create friction between CDOs and other executives. “None of these friction points needs [to] be counterproductive,” he says. “Proper operating model design explicitly identifies these points of friction and provides mechanisms to avoid or resolve conflicts.”

Both the CIO and CDO roles have a similar purpose in that they lead corporate efforts to drive positive business outcomes through the optimal use of technology, including data and related technology, Rayburn says.

Because data can’t be easily separated from its underlying technology infrastructure, there could be a conflict in terms of responsibilities, she says.

“Too many IT shops are still more vested in the infrastructure and technologies that house the data than the expertise to drive value from data, unless the CIO has traditionally maintained strong analytics focus,” Rayburn says.

The role of the CIO emerged in the mid-1980s, whereas the chief data officer is a relatively new appointment recently gaining traction in the face of increasing digitalization, Schwenk says.

“The lack of clarity around roles and responsibilities and the drivers for CDO appointments can mean there is friction between these two roles,” Schwenk says. “Their roles and responsibilities are dependent on the overarching business goals and where the organization is on its digital transformation journey. Still, there could be friction when it comes to how data is managed within the IT infrastructure, which could make CIOs feel threatened.”

For more progressive organizations, a clearer distinction between the roles and responsibilities of these senior leaders and where they fit into the organization is more common, Schwenk says.

Reporting structures

Where CIOs and CDOs fit into a company’s reporting structure varies based on the data maturity, industry, and state of digitalization in the business, Schwenk says. “Why the CDO has been appointed bears considerable weight [on] where they typically report,” she says.

According to the CIO.com’s State of the CIO 2023 survey, 53% of CDOs report to the CIO or top IT executive, with 35% reporting to the CEO and 7% reporting to the CFO or top finance exec.

But the CDO role is evolving. The first generation focused on governance and compliance and building out a trustworthy data foundation, Schwenk says. The second generation had a solid foundation in the data governance and compliance area, but was also looking to drive business value from the data.

“This is actually where we see this tie-in with digital transformation cementing itself,” Schwenk says. “These CDOs placed greater emphasis on a more proactive approach to data management, rather than reacting to GDPR [General Data Privacy Regulation] and other privacy laws and regulations.”

For example, they began serving customers online by using data to provide a better customer experience, optimizing or digitalizing supply chains, or other things of that nature, Schwenk says.

“CDOs from the first generation, [who] tend to care more about managing and governing their data, report to the CIO or IT leader,” Schwenk says. “The second generation tends to be more business-oriented, which means they could report to a leader of the business function or the CEO. And research shows that CDOs reporting to the CEO tend to have more success. They have sponsorship, a clear sense of direction, etc.”

All this matters “because the use of data, exploitation, control and management and governance of data isn’t a purely technical decision, just for the IT department or assumed solely from the business side,” Schwenk says.

While CIOs typically have been more likely than CDOs to report to the CEO, this is changing, adds Abhijit Mazumder, CIO and global head of sales enablement at consulting firm TCS. “Increasingly, CDOs may report directly to the CEO,” he says. “In other cases, a CDO may report to the [general manager] of an individual business unit.”

To ensure success, the CIO and CDO must be closely aligned, Mazumder says. “In situations where both report to the CEO, this is even more important,” he says. “Because the roles may overlap in platforms and practices, conversations about new platforms, vendors, or even new revenue lines should always involve both leaders and their teams.”