CIOs and CDOs: A vital partnership for data value

CIOs collaborate with C-suite colleagues on a regular basis. Given the high value of data and analytics to business, among the most important of these relationships is the one a CIO develops with their chief data officer (CDO).

A CDO is responsible for enterprise-wide governance and use of information as an asset, through data analysis, processing, mining, and other means. Considering the nature of their responsibilities, CIOs and CDOs are bound to have lots of opportunities to work together and must do so in a way beneficial to the enterprise as a whole.

“The CIO role has been around for over four decades, with the responsibility of managing the systems and infrastructure that produce business data and administering those repositories that contain data, including the oversight of business intelligence initiatives to exploit data assets for reporting and business insight,” says Su Rayburn, vice president of information management and analytics at Delta Community Credit Union (DCCU).

As data and analytics have become more critical to business, data volumes have increased significantly, and companies have turned to cloud and other technologies to scale and democratize their analytics strategies. “This has prompted many companies to add the CDO position to executive management, to be responsible for managing the strategy, quality, and governance of an increasingly crucial asset,” Rayburn says.

Vesting a senior leader with the exclusive role of managing all aspects of data, including governance, risk, compliance, policy, and business value realization management is increasingly seen as a solution for data-driven companies, Rayburn says. And with the introduction of these new C-suite colleagues, divisions of labor and lines of collaboration among data and IT teams are shifting along the systems/data divide.

Collaboration is key

The emergence of the CDO doesn’t mean CIOs are no longer involved in data projects. In fact, the two executives can work collaboratively to ensure that an organization is getting the most from its information resources.

“The CDO and the CIO should work in close collaboration and build a partnership and an alliance,” says Helena Schwenk, vice president and chief data and analytics officer at database software company Exasol.

“This alliance could prove quite useful, especially as many organizations remain keen on driving digital transformation,” Schwenk says. “As we very well know, data is [the] beating heart of any digital transformation.” It’s to the benefit of both to work closely together, she says.

“One of the most critical relationships I have is with our CIO,” says Kathy Rudy, chief data and analytics officer with technology research and advisory firm ISG.

“I look at the relationship as both tactical and strategic,” Rudy says. “From a tactical perspective, we need to have a common understanding and agreement around data security, privacy, retention, storage, taxonomy, data structures, and base technology for managing data across the enterprise. Once you have a common understanding of the foundational aspects of data, you can move on to the strategic; how to leverage data to drive business results.”

Rudy works with the CIO and business partners to develop products that monetize data for the firm.

“Having the tactical elements of our data ‘handled,’ we aren’t bogged down with questions about how we are going to do something, but rather we can focus on the art of the possible — what we can do with speed and agility,” Rudy says. “We have a creative license to develop new products leveraging APIs or microservices that combine our data into new and hopefully revenue-generating products.”

The team can also quickly respond to business requests for data that supports running the business, “which honestly are endless and previously took weeks to implement,” Rudy says. “We now look like superstars when we can say, ‘Yes, we can do that,’ and enable it overnight.”

Excelling at analytics

A strong CIO-CDO partnership positions companies well to leverage emerging technologies and data strategies, such as edge analytics.

“Data and analytics are essential to timely decision-making and fuel digital transformation,” Rayburn says. “It is hard to imagine efficient analytics without a well-designed data architecture working seamlessly with enterprise architecture. Given the co-custodianship of data, successful implementation of enterprise strategies will depend upon CDOs and CIOs working well together.”

Today, many applications employ embedded analytics to interact smartly with end users, Rayburn says. “Most of these apps employ edge analytics as they take in and analyze data in real-time at the application level to maintain a sub-second response,” she says. “Pulling this off will require a good partnership between the CIO and CDO, with data architects working with enterprise systems architects to ensure the requisite performance and scalability.”

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.”