Today data has value not only as a raw material for taking administrative decisions. Due to the trend of digitalization information became a means of subsistence for every business. In this article would be considered who is Chief Data Officer, when and why you need him and also where to find and employ TOP-manager. It is necessary to mention that the abbreviation of Chief Data Officer is CDO and it is not the same as the Chief Digital Officer. The areas of responsibility of these two terms are different, despite the fact that they have something in common.

How did the demand on CDO appear

The spread of big data led to the fact of emerging new professions and growing popularity of existed.  For example, analysts and data scientists are now “rock stars” of the modern Big Data world under the direction of CDO. The demand on Chief Data Officer is growing: in 2012 just 12% of Fortune 1000 companies had a CDO. By 2018, 68% of surveyed firms  reported having this position [1]. And there is more to come: in the Gartner’s outlook by 2021, the office of the CDO will be a mission-critical function comparable to IT, business operations, HR and finance in 75% of large enterprises [2].  

The rationale for the Chief Data Officer is as follows: 

• amount of data is growing, but doesn’t turn into quality (useful knowledge for business) automatically;
• a need to integrate a continuously growing Data Professional state (analysts, engineers, data scientists and administrators) in a structural group that requires a relevant leadership;
• digitalization, in other words a move from the traditional model of business process organization and management structure for cost centres to the company architecture being data-driven.

There isn’t actually any revolution idea in proposing CDO in TOP-management. A lot of popular approaches of company architecture description (ARIS, TOGAF, Zachman Framework and based on them standards) consider data as one of the main domains for structure formalization and activities of the organization. Despite more than the 20-year-long history of these methodologies their relevance is confirmed by their employability. Today technical opportunities to work with information caught up with their related methodological frameworks: new means of automatic monitoring, data collection and processing, practice of building pipelines. CDO is needed for effective coordination of the specialists who works with that instruments within the data management operational processes (fig. 1). 

Main aims and job assignments of CDO

Based on preconditions of emerging CDO, the primary purpose of this position is  transforming data into money by the development and implementation of innovative ideas that are based on the analysis of accumulated information. Since data in the data-driven company is the main tool for product generation and value stream, CDO, in fact, is a simultaneous translator from different languages (information representations) in different contexts (production processes) [4]. CDO is responsible for effective  organization of timely corporate data delivery to consumers: applications and users according to their applied roles [5]. Thus, the main CDO tasks are as follows: 

• elaboration and implementation of the concept of corporate data development; 
• creation and support of a common data architecture in all corporate IT-systems and business-processes; 
• data quality assurance through active engagement with company management and data holders and as well as continuous monitoring of data generation and processing processes [6]. 
• participation in the development and implementation of corporate digital transformation strategies, programs for business processes optimization and organizational structures as well as formation of requirements for new software applications and data warehouses; 
• increasing the level of information literacy of employees in the field of management and efficient use of corporate data; 
• training and coordination of the work of Data Stewards - specialists who define requirements and solve incidents with data quality within their unit [https://www.e-xecutive.ru/management/itforbusiness/1988069-zachem-bankam-nuzhen-chief-data-officer.amp];
• managing the work of Data Professionals (analysts, engineers, data scientists and administrators) ;
• effective organization of data management processes (fig. 2.).

In addition, sometimes CDO has obligations of IT-architect, chief analyst and director of digitalization, in fact, they have completely different areas of responsibility [6].  Chief Data Officer primarily focuses on managing information flows and business processes optimization through the efficient information use, giving the operational IT-department responsibility for business continuity of corporate data warehouses and applied processing systems [5].

Due to the crucial role of data, CDO refers to the level of TOP-managers and reports to the general or IT-director. By the way, there are structures when IT-director reports to CDO. Due to the wide range of responsibilities and the significant volume of strategic tasks, the performance of the Chief Data Officer is very difficult to measure by any elementary KPI. Therefore, in most companies, KPI Data Officers are tied to the success of the business or evaluate its performance in terms of internal corporate digitalization projects (fig.3) [8]. 

Core competencies of Chief Data Officer

Apart from the basis of Data Science (statistics, probability theory, computational methods, Machine Learning algorithms), data processing and storage technologies (SQL, NoSQL, ETL, Apache Hadoop stack and other Big Data tools), CDO as well required an experience in business analytics and managerial competencies. The CDO should be an innovator capable of inspiring employees and management to make changes and implement them at all levels of corporate governance, giving priority to information flows and storage [3].

Since the CDO is responsible for building the architecture of the data-driven enterprise, it will require knowledge of the relevant architectural approaches (TOGAF, Zachman Framework, OBASHI, etc.) and IT management practices (ITIL, ITSM, COBIT, etc.), as well as an understanding of standards systems engineering (ISO / IEC / IEEE 42010: 2011, GOST R ISO 15704-2008, GOST R ISO 19439-2008) at least at the basic damage. Knowledge of management and software development methodologies, systems analysis and marketing methods, as well as the discipline of Data Governance will be required. The goal of Data Governance is to create repeatable and scalable data management policies, processes and standards for their effective use, as well as the generation of relevant corporate data and maintaining its reliability [3]. 

In addition, the practical experience as a linear specialist will be extremely helpful for CDO as it will help in understanding application processes as sources and consumers of information. For example, the Alfa Bank Data Management and Monetization Center Chief Director before working as a CDO worked in the banking sector for more than 12 years [4]. 

Thus, core competencies of Chief Data Officer consist of following knowledge areas (fig.4): 

• Data Science;
• Management and business;
• Information technology.

Where to find CDO and how much should you pay him?

As a response to the limited availability of skilled human resources in Data Science in general and CDO in particular, there is an issue of finding a CDO for many large corporations. There are 2 opposite ways of solving this problem: 

• attract a third-party manager to the CDO position by luring him from another company;
• entrust responsibility for corporate data to a competent employee in this field. 

In practice, both these options are common. According to a NewVantage Partners survey, 34% of Fortune-1000 executives believe that a successful CDO should come from outside the company to take a fresh look at the situation. 32% took the opposite view, preferring to “grow” CDO from an employee who has been working for a long time and understands the organization’s culture. At the same time, opinions regarding the CDO professional background were also divided: 23% believe that the successful Chief Data Officer is the former Data Scientist or Data Analyst, and 11% assigned this role to the business manager responsible for financial performance [9]. 

As for CDO's salary, it is the highest among other IT majors. For example, for 2019 in the United States, the data director receives from 116 to 254 thousand dollars a year, which is about 580 - 1270 thousand rubles a month. Moreover, since CDO belongs to the TOP managers, he is also entitled to annual bonuses for the successful achievement of corporate and personal KPIs (Fig. 5) [10].

In most cases CDO’s salary directly correlates with the experience of managerial and applied work: only the data director who is working for 20 years can rely on maximum compensation (fig. 6) [10]. 

In Russia, the situation is a bit different, as of 2019 there is a huge gap between supply and demand. Expertise and experience relevant to CDO can be obtained from a countable number of large technology companies. While the need for such specialists arises in a wide variety of niches from medicine and agriculture to education and metallurgy. And taking into account the current trend towards digitalization of private and state-owned enterprises, the spread of ideas of data-driven companies and technologies for their implementation, the demand for CDO in our country and around the world will increase every year. Therefore, the salaries of a good CDO in Russia also start at 500 thousand rubles. A similar increase in demand awaits the directors of digitalization and artificial intelligence, which I will discuss in the next article. 

Sources

1. Rethinking The Role of Chief Data Officer 
2. 3 Top Take-Aways From the Gartner Chief Data Officer Survey 
3. Chief Data Officer, CDO 
4. How Alfa-Bank loves and understands data. The interview with Chief Data Officer
5. CDO without artificial intelligence — money away?
6. Why banks need Chief Data Officer 
7. Who is CDO? «Chief Data Officer» or «Chief Digital Officer»? 
8. What makes a successful Chief Data Officer? 
9. What is a chief data officer? A leader who creates business value from data 
10. Average Chief Data Officer Salary